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Some reflections on how the top 20% of earners (including Alberta’s politicians) are growing the gap between themselves and the rest of us. And further what this growing gap says about how our society increasingly values some types of work over other types of work.
The chart below from a Statistics Canada report says a lot about what is happening in today’s job market. The complete report is available here: http://www12.statcan.ca/english/census06/analysis/income/index.cfm
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Median earnings, in 2005 constant dollars, of full-time full-year earners by quintile, Canada, 1980 to 2005 |
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Quintile |
Year |
Change |
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1980 |
1990 |
2000 |
2005 |
1980 to 2005 |
2000 to 2005 |
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2005 constant dollars |
percentage |
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Bottom 20% |
19,367 |
16,345 |
15,861 |
15,375 |
-20.6 |
-3.1 |
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Middle 20% |
41,348 |
40,778 |
40,433 |
41,401 |
0.1 |
2.4 |
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Top 20% |
74,084 |
76,616 |
81,224 |
86,253 |
16.4 |
6.2 |
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The bottom 20% of full-time full-year earners is made up of over two million Canadian workers. Not only are they making on average just over $15,000 a year, they have seen their real earnings erode by 20.6% over the past quarter-century. Other research has shown that low income workers also tend to lack employee benefits and workplace pensions. They often work in insecure and sometimes dangerous jobs.
Low income workers are by any measure putting in an honest day’s work. To qualify for the bottom quintile, you have to work 30 or more hours per week 49 or more weeks a year. What is happening on the low end of the job market is that many workers are forced to work more than one full-time job to make ends meet.
The following is a typical story that we heard at six focus groups with low income workers that Vibrant Communities Edmonton conducted last year for the ESPC as part of the research project that resulted in the ‘Standing Still in a Booming Economy’ report. What many low income workers do is get up at 4:00 in the morning to deliver one of Edmonton’s daily newspapers, then go to their regular full-time job, and then supplement this with another part-time evening and/or weekend job, all in an often losing battle for economic security.
How does the new MLA pay package stack up against what regular folks are making? To figure this out, you have to correct for the tax free portion of their salary, the RRSP allowance, and the 25% deferred compensation (transition allowance) component. Instead of the claimed $114,000, the typical MLA who sits on at least three legislature committees or provincial boards now gets over $165,000 in yearly compensation. According to the same Stats Can report, that places MLAs in the top 2% of Canadian wage earners.
After making the same adjustments, instead of the claimed $184,000, Cabinet Ministers actually make about $250,000 a year. Instead of the claimed $213,000, the Premier is making close to $300,000 per year.
Politicians are looking up – not down - the pay scale to determine their worth. The logic goes like this. Corporate executives in the private sector are increasingly getting multi-million pay packages. In order to attract top talent, senior public officials need to be paid “competitive” wages and benefits. Well it just wouldn’t do for the head of a health region or a deputy minister to be making significantly more than our top elected officials, so we better significantly hike the pay of the Premier, the Cabinet and MLAs as well.
This certainly helps explain the growing gap and rising inequality in this country and province. Or, to put it in the less delicate words of Warren Buffet, the world's richest man, who quipped: "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning" (New York Times, November 26, 2006.
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Thursday, 17 May 2012 
The ESPC is a member of the Edmonton Coalition on Housing and Homelessness (ECOHH). ECOHH sent out a three question survey related to housing security to each political party competing in the 2012 Alberta election. So far, the Progressive Conservatives (PC), the New Democratic Party (NDP), and the Alberta Party responded to ECOHH's questions. Below are their respective answers.
