Gordon Campbell’s response to the Census inequality findings
Browsing through the letters to the editor in the two big Vancouver dailies this morning, I came across a letter from BC Premier Gordon Campbell responding to the recent Census findings of declining median incomes for workers in this province. The letter was published in both newspapers: a longer version under “Purchasing power and globalization” in the Vancouver Sun and an abridged version under “Rising incomes” in the Province. In the letter, Premier Campbell expresses his concern that median income statistics “don’t tell the full story of the growth and prosperity we’ve experienced in British Columbia over the past seven years” (i.e., since Campbell’s government took over). Campbell’s rebuttal?
While the Statistics Canada figures focus on median income, they do not reflect the disposable income that individuals take home with them. According to BC Stats, personal disposable income per capita in B.C. is up 17.2 per cent since 2000, and by five per cent in the past two years alone. This is the highest growth rate seen in more than 20 years.
Much of that growth in take-home pay can be attributed to the tax cuts brought in under this government.
To his credit, the numbers he quotes seem right according to this BC Stats table. However, bringing up per-capita personal disposable income, which is essentially after-tax income averaged over the whole BC population, only muddles the waters and misses the point. The point, Mr Campbell, is that the economic growth that BC (and Canada as a whole) has enjoyed has been very unevenly distributed. So focusing on the average, which is what a per capita statistic is, does not tell us anything about the earnings of workers or even the general distribution of incomes, regardless of whether we look before or after taxes. The income distribution is highly skewed to the left (i.e. there is a higher concentration of incomes towards the bottom of the distribution) as demonstrated by the median incomes being considerably smaller than the mean (or average) incomes regardless of what category one looks at. Those at the top of the distribution have enjoyed both higher earnings and have disproportionately benefited from the provincial government tax cuts. Is it surprising, then, to find that average after-tax incomes have increased while the median incomes are falling? Not really. Are we leaving too many people behind? You bet!
Instead of patting himself on the back for brining “growth and prosperity” to BC, Premier Campbell would be better advised to start worrying about why it is that in a province that, as he remarks, has seen “record-low unemployment rates” and “more than 420,000 new jobs created since 2001” the median earnings for those working full-time full-year have actually fallen by 3.4% between 2000 and 2005.