People Work Harder And Have Less Money (Canada) (fwd)

Francisco Lopez (
Sat, 17 May 1997 15:28:50 -0400 (EDT)


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Figures released by Statistics Canada have confirmed that more and more of the wealth being created through the sweat and toil of Canadians is making its way into the pockets of the rich. Average family income after taxes and inflation are taken into consideration reached a peak in 1995 at $44,286. At that level, it remained 5.4 per cent less than the peak in 1989. Income from jobs and investments rose only $164, while governments cut their transfer payments to families by 3.8 per cent to an average $6,663, the report says. The biggest cuts were directed against the most vulnerable in the society, that is, those on social assistance and employment insurance payments. Income taxes stayed the same. The statistics show that the trend was most evident amongst two-parent families who fared the worst. While they had higher incomes, they received little in transfers and paid the highest taxes - an average of 22.1 per cent. Average weekly earnings were actually lower in 1995 than in 1994, after adjusting for inflation. Statistics Canada predicts that the situation is not likely to improve. While there were more full-time jobs in 1996, average weekly earnings barely outpaced inflation and investment income likely fell because of low interest rates. The executive director of the Canadian Council on Social Development, David Ross, said that the figures released and the prospects for the future represent a "huge worry." "You read that things are booming - the dollar is stable, interest rates are down - and you would think that income would be up. This is a real serious problem we have here," he said. The study shows that the vast majority of families have to have two incomes to maintain the standard of living that one used to support. Real disposable income has fallen even more because user fees are eating up a greater part of what's left after taxes, something which is not taken into consideration in the study. Furthermore, while the study takes income taxes into account, it does not reveal the impact of provincial and federal sales taxes. Statistics Canada's figures also showed that there is a broad lowering of the conditions of living for the middle-strata. In this regard, the analysis being presented is to link the funding that is provided to the most impoverished and vulnerable sections of the society to the deterioration of the living standards of the middle-strata. The figures are presented in such a way as to completely gloss over the fact that the society has become one in which everybody is being made to pay tribute to the rich and to present the purpose of income taxes as one of "income redistribution," rather than paying the rich. The following picture is presented. Before taxes, the 20 per cent of families with the highest incomes had $21 for every dollar those in the bottom 20 per cent had. After taxes and transfers, that gap was narrowed to $5 for every dollar. The lowest 20 per cent of families saw their income rise to $17,058 from $5,182 before the transfers. The highest-income families, on the other hand, watched their average earnings fall to $82,646 from a pre-tax average of $108,309. Before transfers, two-parent families received an average of $25 for every dollar a single mother had. After redistribution that was reduced to $3 for every dollar. Taxes and transfers dropped the percentage of Canadians with low incomes to 13.2 per cent in 1995 from 17.8 per cent before taxes and transfers. But the proportion living below Statistics Canada's low-income cutoff line was greater in 1995 than '94, whether measured before or after taxes and transfers. The average level of transfer payments fell nearly four per cent in 1995, as provincial welfare cuts and federal cuts to the unemployed began to take effect. The deepening cuts will accelerate the trend. These figures strongly substantiate the claim of the Marxist-Leninists that a program to Stop Paying the Rich and Increase Funding for Social Programs is required at this time.

Shawgi Tell University at Buffalo Graduate School of Education V600A8E6@UBVMS.CC.BUFFALO.EDU

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