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Dylan Fronda

Income Distribution - The Canadian Encyclopedia - 3 views

www.thecanadianencyclopedia.com/...income-distribution

shared by Dylan Fronda on 08 Jan 12 - No Cached
  • The earnings of production factors determine what is known as the distribution of "primary" income; wages and salaries alone account for roughly 85% of this income
  • The following variables influence this distribution: skills, education, professional training and experience, working hours, compensatory salary differences, institutional restrictions, discrimination, differences in property wealth (including inherited wealth), opportunity, age and health. Primary income distribution is also modified by government intervention. The government influences income distribution in various ways, eg, through TAXATION, TRANSFER PAYMENTS and the provision of social goods and services.
  • In 1985 families of the lowest quintile accounted for 6.3% of the total income, while those of the highest quintile earned 39.4%. Families of the first quintile had an annual income of less than $17 928 and those of the fifth quintile an income greater than $53 398
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  • Income distribution, as measured by Statistics Canada, has been very stable over the past 30 years; ie, the share of income going to each quintile has varied only slightly. Such stability in income distribution is surprising because, during the same period, Canada experienced considerable economic growth and the average family income, corrected for INFLATION, nearly tripled. Moreover the WELFARE STATE, which came into existence during this time, created a considerable increase in government transfer payments.
  • differences in primary income have become more pronounced because of changes in lifestyle
  • The poor in Canada are defined as those whose standard of living is below a certain level (usually called the "poverty line") and those who have serious difficulties participating actively in the life of society. Defined in this way, poverty is a relative phenomenon that can be measured by income levels.
  • In 1985, 13.1% of Canadian families and 36.6% of unattached individuals (representing 15.9% of the population or 3.9 million persons), were numbered as poor. Poverty is more common in the Atlantic provinces and Québec (see REGIONAL ECONOMICS), among young people and the elderly and in families (usually single-parent families) in which a woman is the head of the household.
  • Since the early 1960s, a universal solution to poverty and income disparities has been proposed regularly in North America: guaranteed annual (or minimum) income (known as "negative income tax" when incorporated into the tax system).
  • This income level is based on the needs of each family (by size) and could be the same as the poverty threshold. Theoretically such an income is now provided through welfare payments. Second, while welfare payments are now taxed at $1 for each $1 earned over and above the welfare payments, a guaranteed annual income would be reduced at a lower tax rate (eg, 50c for each $1 of earnings).
  • Dylan Fronda on 10 Jan 12
     
    Many relevant statistics and solutions offered in this article.
Dylan Fronda

The All-Canadian Wealth Test | MoneySense - 2 views

www.moneysense.ca/...the-all-canadian-wealth-test

shared by Dylan Fronda on 08 Jan 12 - No Cached
  • The good news — and, yes, there is good news — is that the average household is better off today than it was nine years ago when Canada was zooming along at the peak of the dotcom boom. Over the past year, the typical person has lost about a tenth of his or her wealth. But the average Canadian household is still 7% richer in real terms in grim 2009 than it was in bubbly 2000. That’s an amazing — and encouraging — fact. Despite the worst economic crisis since the Great Depression, prosperity still appears to be inching ahead.
  • Problem is, our prosperity comes with warning stickers. One catch is that our increase in average wealth has been accompanied by an increase in inequality. While the rich are definitely growing richer, it’s not clear that middle- or working-class Canadians are any wealthier than they were a decade ago.
  • A single bookkeeper who makes $52,000 a year ranks among the top 20% of unattached earners. Two married school teachers who together earn $120,000 a year qualify as a top-quintile family.
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  • The tables show the average (not the minimum) earnings for each quintile of society. As you can see, Alberta and Ontario are the highest-earning provinces, while Newfoundland and PEI are the lowest. The average top-quintile family in Alberta earns a joint income of $233,800; the average top-quintile family in PEI makes only $136,300.
  • Women make, on average, about two-thirds of what men do.
  • The narrower gap for the younger age groups suggests that women are now placing a higher priority on careers than did previous generations.
  • There is no sign that the disparities among regions and between sexes are going to end anytime soon. If anything, Canada’s income distribution is becoming even more skewed. The top 20% of all households collect nearly half of all the income generated in Canada. The poorest 20% of households get only 4%. Inequality between the rich and poor has been slowly growing for the past two decades and stands at record levels.
  • While the rich are gaining ground and the poor are losing ground, the middle is only inching ahead.
  • While incomes are far from equal, wealth is even more unbalanced. The richest 20% of Canadian households control about 69% of the wealth in Canada. The next quintile down possesses a further 20% of our national net worth.
  • Not much is left over for other people. The bottom 60% of households control only 11% of Canada’s wealth. In fact, the bottom fifth of the population possess no wealth and actually owe a few thousand dollars more than they own.
  • First, it helps to be born male. Households in which a man is the primary earner have net worths that are $36,000 above the overall median for all households of all typesof $170,000.
  • A household headed by someone under 35 typically has a net worth that is $145,000 below the median. A household headed by someone 55 to 64 usually has wealth that is $250,000 above the median.
  • A household headed by someone with a university degree or certificate typically has net worth that is $90,000 greater than the median.
Rebecca Samek

'Income inequality,' the new term for disparaging hard work | Full Comment | National Post - 0 views

fullcomment.nationalpost.com/...term-for-disparaging-hard-work

Income Income Inequality Hard Work

shared by Rebecca Samek on 08 Jan 12 - No Cached
  • Toss that $8.3 million average salary into a calculator and voila: “189 times higher than the $44,366″ earned by the average Canadian in 2010.
  • 100 individuals earn an average of $8.3 million to run some of the biggest companies listed on the stock market. That has nothing to do with any income inequality
  • Rebecca Samek on 08 Jan 12
     
    Article. This author is stating that income inequality is the new term for hard work, my understanding of the article is that hard working people deserve to be earning the amount of money they earn because they worked for it.
Dylan Fronda

Perspectives on Labour and Income - Revisiting wealth inequality - 5 views

www.statcan.gc.ca/...9543-eng.htm

shared by Dylan Fronda on 08 Jan 12 - No Cached
  • As numerous studies have shown (for example, Davies 1979 and 1993), wealth is highly concentrated. In 1984, families in the top 10% of the wealth distribution held 52% of aggregate household wealth whereas the bottom 50% held only 5% (Table 1).3 Concentration increased from 1984 to 1999 and again from 1999 to 2005, as the top 10% of families came to own 56% of Canadians' net worth in 1999, and 58% in 2005.4 Over the 1984-to-2005 period, only families in the top 10% increased their share of total wealth.5
  • Wealth inequality, as measured by the Gini coefficient, displayed a U-shape between 1970 and 2005 (Chart C). It fell sharply between 1970 and 1977, remained fairly constant between 1977 and 1984, but rose substantially in subsequent years. As a result, it was no lower in 2005 than in 1970. Hence, Canada's wealth dispersion has been trending upwards since the mid-1980s. Similar patterns are observed when plotting the share of wealth held by the top 10% of families.
  • While population aging tended to increase average wealth between 1984 and 2005, it also affected the wealth distribution. In the absence of population aging, the share of total wealth held by the top 10% of families would have risen from 52% in 1984 to 60% in 2005 (Table 1). Since the actual figure in 2005 was 58%, it appears that population aging reduced the concentration of wealth at the top of the distribution.11
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  • Although both median and average wealth rose between 1984 and 2005, not all population subgroups enjoyed increases. Young families (major income recipient aged 25 to 34) saw their median wealth fall by 50% or more (Table 4).12 The situation was fairly similar in 1984 and 2005 for families with a major income recipient aged 35 to 54 without a university degree. However, this age group saw a solid 39% rise in median wealth when the major income recipient was a university graduate.
  • Other groups also benefited. Elderly unattached individuals saw their median wealth double, from roughly $48,000 in 1984 to $100,000 in 2005. Couples with children under 18 and those with no children also saw theirs increase—34% and 55% respectively. Growth among couples with children was far from uniform, however. For young couples, median wealth fell sharply between 1984 and 1999, rebounding between 1999 and 2005, although not to its 1984 level (Table 5).13 In contrast, for those aged 45 to 54, median wealth rose steadily, climbing 45% between 1984 and 2005.
  • Lone-parent families and non-elderly unattached individuals had low median and average wealth, reflecting at least partially the absence of a second earner. For these two groups, median wealth was no higher than $7,000 in 1999. This reflects the lack of assets these families have at their disposal to lessen the impact of unexpected expenses or earnings disruptions.
  • During this period, the distribution of wealth, excluding the value of employer-sponsored pension plans, has become more unequal—and would have become even more unequal in the absence of population aging. The gap between families in the bottom and top 20% of the wealth distribution rose mainly because the top 20% experienced a substantial increase in home equity and also allocated more of their financial assets to RRSP and LIRA holdings.
  • From an accounting view, two factors were mainly responsible for the widening gap between families in the bottom and top fifths of the wealth distribution: home equity and holdings in RRSPs and locked-in retirement accounts (LIRAs). The net value of the principal residence stagnated among families in the bottom fifth, but rose about $155,000 among those in the top fifth.16 Similarly, RRSP and LIRA holdings changed very little in the former group while increasing roughly $100,000 in the latter.
  • Since conclusions about the influence of specific explanatory variables depend on the order in which these variables are entered, alternative specifications are considered. Rather than simply controlling for inheritances alone, they can be added to a specification that already includes a large set of controls: family type, province of residence, age and education of the major income recipient, and an indicator of work limitation. When this is done, the fraction of the wealth gap explained increases from about 7% to over 10%.
  • Dylan Fronda on 10 Jan 12
     
    Many supporting statistics that directly relate to wealth distribution in Canada.
anonymous

Occupy protestors say it is 99% v 1%. Are they right? | News | guardian.co.uk - 0 views

www.guardian.co.uk/...occupy-protests-data-video

Wealth Distribution Average Income National Wealth

shared by anonymous on 13 Jan 12 - No Cached
  • Is it really 99% v 1%? It has become the rallying cry of the Occupy Wall Street movement - and the Occupy protests around the world. But is it true?
  • When Americans are asked how US wealth is distributed, they think the very richest fifth should own up to 40% of the national wealth - and that includes 90% of Republicans surveyed. In fact, that richest group owns 85% of the nation's wealth. Those surveyed also thought the bottom 120 million people should own around 10% of the national wealth. The reality: 0.3%
  • In 2010, the average American earned $26,487 - down over $2,000 in real terms on 2006. That's a drop of 5.27%, including inflation. If you were poor it's been an even bigger drop - the 24 million least wealthy households in America saw their average income go down by 10% From $12,276 in 2006 to $11,034 in 2010
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  • If you were super rich it went down too. The 400 wealthiest American households lost around 4%, including inflation Between 2006 and 2008
  • Part of the reason average Americans have been hit so hard is where their wealth comes from. Before the crash, middle-class Americans had 65% of their wealth tied up in their house.. But the richest 1% of the population kept most of their wealth in stocks and shares and business. So, when house prices went south, many Americans found their wealth disappearing too.
  • Now, one in every seven Americans lives below the poverty line - that's a record 46.2 million people
  • One in six Americans have no health insurance - 50 million people
  • Of every 17 Americans, at least one will be earning below the minimum wage of $7.25 per hour
  • 14.5% of Americans households are defined as "food insecure". That means for every seven households, one will have trouble putting enough food on the table
  • What about taxes? The 400 wealthiest households paid $19.6bn in taxes in 2008 - the latest year we have data. That's 1.9% of all the income tax the IRS collects
  • Is it the 99% v the 1% What do you think?
iris qiu

Canadian household debt hits $100,000. Now what? - How to Finance Blog | How to Budget ... - 0 views

blog.yourmoney.ca/...canadian-household-debt.html

consumer debt zhonhuiQIU

shared by iris qiu on 11 Jan 12 - No Cached
  • recent report. Canadians also owe far more then they earn. The report, released by the Vanier Institute of the Family last month, says the debt-to-income ratio is a record 150%. That means for every $1,000 in after-tax income a Canadian family earns, they now owe $1,500.
  • In previous reports tracking the health of Canadian family finances, the institute found that the debt-to-income ratio has been steadily climbing over the past 20 years. In 1990, the average family debt reached $56,800 with a debt-to-income ratio of 93%, making the current $100,000 figure a substantial increase of 78% over the past two decades.
  • Bottom Line: Mortgages account for two-thirds of Canadian household debt and are one of the biggest strains on the family budget. Using your prepayment privileges and getting on an accelerated bi-weekly payment plan are two strategies that could help you pay down your mortgage sooner. See 5 Ways to get mortgage-free faster for the details.
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  • 1. Mortgages.
  • 2. Consumer credit and loans.
  • Bottom Line: Paying with plastic can be a costly habit, especially if you're only paying the minimum every month. Get savvy about the new credit card rules, increase your minimum monthly payment to decrease your interest charges, and don't get trapped by these 5 Costly credit card tricks. 3. We're not saving.
  • Bottom Line: Spending ten minutes today could save you over $1,000 this year, and also try any of these 50 Ways to save $1000 a year if you need a bucket list of ideas to get your savings started. Just be sure to stick your money in a Tax-Free Savings Account to keep the Tax Man from biting into your returns.
dayuloveme

Credit card debt falls in 2011 - Business - CBC News - 0 views

www.cbc.ca/...x-credit-card-debt-canada.html

credit card debt

shared by dayuloveme on 11 Jan 12 - No Cached
  • Despite that improvement and a reduction in consumer bankruptcies last year, overall debt continues to rise — though much more slowly than before.
  • As the economy slows and consumers become more nervous about the future, Canadians are curbing spending and paying down some debts.
  • But he said given that household debt-to-income levels sit at an historic 150 per cent — that means mortgage and other debts are 1.5 times a Canadian household's average income — it would be risky for borrowing to rise further.
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  • He said if debt-to-income ratios flatline and Canada's economy grows, debt levels will naturally come down.
  • They began to take advantage of low interest rates sooner to take on more mortgage and consumer debt, which helped stabilize the Canadian housing market and domestic spending.
  • dayuloveme on 11 Jan 12
     
    The improvement of delinquency.
Sam Tang

Shortchanging immigrants costs Canada - The Globe and Mail - 0 views

www.theglobeandmail.com/...singlepage

employment unemployment canada challenges immigrants

shared by Sam Tang on 04 Jan 12 - No Cached
  • Canada has a well-documented history of attracting the best and brightest immigrants from developing countries. But many of these people wind up jobless, or in minimum-wage survival jobs. And there’s a wider economic cost to the country of under-utilizing these skilled workers.
  • The study finds that if immigrants’ skills were rewarded in a similar way to that of Canadian-born workers, the increase in their incomes would amount to $30.7-billion – or the equivalent of 2.1 per cent of the country’s gross domestic product.
  • “If we are going to continue to flourish and grow as a country, we’ve got to be very receptive to foreign capital, to foreign thinking and to foreign skills to maximize our potential,” Gordon Nixon
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  • As of November, the jobless rate among Canadian-born workers was 6.3 per cent, compared with 8.4 per cent for all landed immigrants and 13.4 per cent for recent immigrants, according to Statistics Canada.
  • Employment tumbled 12.9 per cent among new immigrants in the downturn, led by a slump in factory jobs, compared with a 2.2-per-cent drop for Canadian-born workers, Statistics Canada figures show.
  • Canada squandering its own growth potential because it delays the ability of newcomers to put down roots by buying homes, saving for their children’s education or investing for retirement.“If you look at what drives the real-estate market, what drives consumer spending – unemployment and wealth and incomes [are] key drivers in terms of that, so it filters right across the economy,” said Mr. Nixon.
  • Canadian society will pay a steep price if new immigrants continue to struggle with underemployment and a yawning wage gap.
  • “We need immigrants,” said John Tory, the former Rogers Communications executive and past leader of the Ontario Progressive Conservative Party, in a recent speech. “We need them in our work force, we need them to sustain and expand not only the labour market, but our consumer market as well.
  • Consumer spending accounts for 60 to 70 per cent of the Canadian economy.
  • Résumés with English-sounding names receive, on average, 35 per cent more callbacks from employers than those with foreign-sounding names, a study this fall by University of Toronto researchers found.
  • In Toronto, a half-year mentoring program that matches newcomers with established professionals has resulted in 70 per cent of them finding work in their fields.
pauleniar

Housing correction big risk for Canada | Economy | News | Financial Post - 0 views

business.financialpost.com/...correction-big-risk-for-canada

European Debt Crisis canada risk systemic economy housing

shared by pauleniar on 08 Jan 12 - No Cached
  • uropean sovereign debt crisis destabilize the global economy, triggering in Canada a 15% decline in house prices, combined with a severe downturn in construction activity
  • GDP decline of some 2.5% over a period of two years
  • housing market will be the opposing forces of rock-bottom interest rates and economic weakness,
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  • At one end of the rope is the magnetism of low interest rates; at the other are subdued prospects for economic, income and employment growth
  • rising interest rates will restore the pressure on housing prices.
  • Canadian housing prices could fall by 1.9% next year and 3.6% in 2013
  • Home sales could suffer comparable declines, while average starts should fall to 170,000 to 180,000 annually over the next two years.
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