Low-wage families face tough choices
Richest half of Ontarians with kids took home 81% of earnings from 2013 to 2015
Isabella Daley had to borrow $169 from a friend last fall after she broke her ankle because she couldn’t afford an air cast.
Without it, she would have needed more days off work — all unpaid — making it harder than it already was to make it through the month. She’s been in worse situations, though.
Not much compares to the pain she felt in 2005 when her 22-year-old son died.
“I didn’t have the money to bury him and why would I? I didn’t have insurance on my kid,” Daley said. “I didn’t have any savings. Who saves for their kid’s funeral?”
She managed, but only with donations from people she’d never met.
Today, Daley, who lives in Hamilton, works three part-time jobs trying to make ends meet. Still, she only earned about $15,000 last year, she said.
At 55, she is just one of thousands of Ontarians struggling financially as income inequality rises.
A new report by the Canadian Centre for Policy Alternatives found the richest half of Ontario families raising children took home 81per cent of earnings in 2013-2015, leaving the bottom half to share 19 per cent.
The gap has widened from 78-22, in 2000 to 2002.
“Families in the top half of the income spectrum are getting increasing rewards for their work,” said Sheila Block, a senior economist with the independent research institute, who wrote the “Losing Ground” report.
“It’s a totally different scenario for families in the bottom half of the income spectrum. Their wages have been declining and the labour market is doing them no favours.”
Slower economic growth, a rise in precarious and low-wage work and a “hollowing out” in the manufacturing sector have taken a disproportionate toll on low-income families in Ontario, the report says.
Government transfers and tax policy have helped lessen the impact, but proposed legislation that would raise the minimum wage and make forming unions easier is “long overdue,” it notes.
While average earnings in Canada saw steady growth over the 15-year period, they were stagnant in Ontario between 2000 and 2013, showing signs of recovery by 2014, Block said.
Families in the bottom half of the income spectrum though, saw their wages drop over the whole period. Those with the lowest earnings saw the steepest decline.
Meanwhile, the top half saw their real average earnings rise.
Though earnings for the richest 10 per cent didn’t grow, they earned $184,919 more than the average family in 2015.
“The labour market is rewarding some workers at the expense of others,” Block said, adding that it’s no coincidence unionization rates are declining at the same time.
Though 90 per cent of families saw their earnings grow in Canada, the income gap remained significant.
“The richest 10 per cent of families in Canada earned 181 per cent of the average family’s pay, indicating the intractable, stubborn nature of labour market income inequality in this country,” the report says.
For the families in the bottom half, the rise in precarious and low wage work has meant tough choices.
“If your kids have a field trip, you’re in trouble; if your kids have a growth spurt, you’re in trouble,” said Daley, whose daughters are now 19 and 24 and living at home.
Even trips to the grocery story can mean choosing between shampoo and household cleaning supplies, said Daley, who advocates for living wages through the Hamilton Roundtable for Poverty Reduction.
With a 10-year-old and 14-year-old about to head back to school, Scarborough resident Emery Cole understands those challenges. “They need shoes, they need clothes, they need books,” he said. “I don’t know how I’m going to do it.”
A welder by trade, Cole has had more than 15 jobs since 2006. He’s faced repeated layoffs as manufacturing jobs in Ontario decline.
Now he’s worried about the younger generation trying to find work.
“I can see a big-time disaster evolving in Canada,” he said.
Though families across the income spectrum benefitted from government programs, for the bottom half they were “crucial,” raising after-tax income in the face of declining pay, the report says.
Bill 148, the Fair Workplaces, Better Jobs Act, is exactly the change Ontario needs, she said, adding that enforcement is needed to make sure employers follow the law if it passes.
The provincial legislation proposes raising the minimum wage from $11.40 to $15 by 2019 and changes designed to make it easier to join a union.