A government-sponsored study says Canada has the world’s highest per capita income in the world.
And the study says there’s good reason to believe that the rich will continue to enjoy it for a long time to come.
“We’re going to be seeing that for quite a while to come,” says Stephen Moore, president of the Canadian Centre for Policy Alternatives, which is running the report.
“The top one per cent of Canadians are going to continue to get richer, and that’s going to come from the economy and the consumption of the rest of us.”
The top one-per-cent income share is now at 15.4 per cent, according to a recent World Bank study, and is projected to rise to 19 per cent by 2040.
“That’s not a very large amount,” Moore says.
“If you compare that to the world average, which was just below 20 per cent in the 1980s, you get the impression that the world is in for a pretty tough time.”
That’s not necessarily because the world has gotten poorer.
“It’s the combination of the rich getting richer and the rest getting poorer,” says Scott Sinclair, executive director of the Tax Foundation, a think-tank.
The top 10 per cent have already seen their share of global income double over the past 25 years, and in the past 10 years the top 10 have enjoyed an average income of more than $50,000 per person, up from about $35,000 in 1990.
In other words, the rich are doing very well.
“This is a great time for the rich,” says Sinclair.
“What’s happening is that the top 1 per cent is getting richer, the top 5 per cent are getting richer.”
There’s a caveat to that: the top one percent income share has been declining for the past 15 years, due in part to a recession in China.
But the trend is accelerating in the next decade, according the report, which finds that by 2060, the richest 10 per-cent of Canadians will be richer than the poorest 20 per-per-.
They’ll have an average wealth of $180,000 a year, up slightly from $166,000.
The trend will continue for decades, as people with the greatest wealth in the economy are rewarded for their work and hard work.
Meanwhile, the poorest 10 per.
cent are struggling.
The report says the average Canadian household will be earning only about $8,000 more a year by 2090 than it is today.
That’s a huge drop from the previous year, when average earnings were $9,400.
Meanwhile the middle class will be even worse off.
In the same year, the middle 10 per .
is projected by the report to be earning less than it was in 2015, after adjusting for inflation.
That means the average middle-class household is going to lose $16,000 by 2030.
That will be a big loss for a family that earns $70,000, according, for example, to the average income in Canada of $65,000 last year.
But if you’re one of the bottom 10 per — or even the bottom fifth — of earners, that will leave a net loss of $6,800.
By 2060 the bottom 20 per.
of earners will have a net income of $22,000 — well below the average earnings in Canada, where the middle fifth earned $54,400 in 2015.
“There’s no question that this is going in the wrong direction,” says Moore.
“And that’s a real problem, because you have a middle class that’s losing their income to the top, and you have the top getting richer as well.
The middle class is really not going to recover in the way it needs to.”
As it happens, the OECD report is based on a survey of 2,000 people in 20 rich countries.
It’s not the first attempt to measure the top and bottom of the world economy.
Last year, a report by the Organisation for Economic Co-operation and Development looked at the share of income shared by the top 0.1 per cent and the bottom 80 per cent.
It found that in the United States, the bottom 90 per cent share is rising.
The OECD report found that income inequality in Canada is a concern because it’s an indicator of inequality in the country, rather than just one country.
It also says that the OECD is not an expert on the topic, so it can’t make specific recommendations.
“Our goal is to understand how the rich have fared in recent decades,” says the report’s authors.
“When we do that, we can help people make better decisions about how to invest in their future and help to move the economy forward.”