Even a bad survey cannot blind us to income inequality
TheGlobeandMail.com – ROB/Economy/Economy Lab –
Sep. 11 2013. Andrew Jackson
The replacement of income data from the census by the National Household Survey (NHS), released Wednesday by Statistics Canada, leaves us largely blind to what changes in the level and distribution of income took place in Canada between 2005 and 2010. We are thus unable to answer the key questions: “Who suffered the most from the impacts of the Great Recession?” and “Did inequality get better or worse?”
The change in methodology, and the large non-response rate of 26 per cent to the NHS, which likely resulted from below-average participation by lower-income groups, means that we cannot be sure if changes in the data between 2005 and 2010 are real, or the result of changes in the survey.
When the 2006 census data were released, Statistics Canada highlighted changes in median earnings and median family incomes over time. The big story then was that middle-class earnings had been stagnating for a long time, while middle-class family incomes had been boosted by working longer hours.
Yet the subject of change over time is completely avoided by the new NHS release on incomes. It even goes so far as to exclude data on low income that are clearly considered unreliable.
That said, the NHS does give us a (perhaps somewhat murky and suspect) snapshot of various dimensions of income and income inequality in 2010, a year of continued high unemployment and only modest recovery from the Great Recession.
The median economy family had an income of $76,511, but there was a huge gap between the median income of the bottom 10 per cent of families (just $14,659) and the top 10 per cent ($199,278).
Looking at all Canadians aged 15 and over, the NHS reports that average income was $38,650. However, the incomes of the bottom 90 per cent of Canadians averaged just $27,954, compared with an average of $134,916 for the top 10 per cent.
The top 1 per cent had average incomes of $381,336, more than 10 times the average for the bottom 90 per cent. The average of the top 1 per cent is, of course, boosted by the very, very high incomes of those at the very top of the income pyramid. A separate analysis shows that the bulk of the elite top-1-per-cent group is male senior executives.
The NHS also reveals major income inequalities between men and women ($46,471 versus $31,204); between all Canadians and aboriginals ($38,650 versus $27,281); and between all Canadians and members of visible minority groups ($38,650 versus $30,596).
The NHS release also reminds us of the importance of income support programs to Canadian families, especially those with low market incomes. Transfer programs (mainly old age pensions and employment insurance benefits) made up 12.4 per cent of all income, but it accounts for the majority of income for the poorest 20 per cent of Canadians (including a whopping 67 per cent of the incomes of the poorest 10 per cent).
Again, the lack of comparability between the 2006 census and the 2011 NHS will make it very difficult for researchers and analysts to judge to what extent our social programs blunted the impact of the Great Recession on the incomes of many middle-class and working families. In particular, Employment Insurance was a much less robust program than in previous recessions, even though temporary improvements were still in place in the early stages of the recovery.
There will be plenty of grist for the analytical mill in the NHS income data, and it will throw some light on trends in the level and distribution of wages and incomes. But we no longer have a reliable source of information on the longer-term trends, which it is so important to understand.
Andrew Jackson is the Packer Professor of Social Justice at York University and senior policy adviser to the Broadbent Institute.
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