Nfld. & Labrador

Left behind by the boom: Income inequality, by the numbers

There have never so many well-paid people in Newfoundland and Labrador, but federal tax figures show there's an underside to the economic surge, Adam Walsh writes.

Newfoundland and Labrador's middle class squeezed despite historic boom

There's more money kicking around Newfoundland and Labrador, but it's not being evenly distributed.

The rich in this province are getting richer, and there are more of them. 

That's not just me saying this as I line up behind some well-heeled folks to get my morning latte.

I got those numbers from Statistics Canada, which reported them a few weeks ago. 

In 2012, the top 10 per cent of earners in Newfoundland and Labrador took home 31.5 per cent of all available income. 

That's up, a lot. In 2006, their share was 22.4 per cent. 

What's more, the top 10 per cent also welcomed more into their ranks in that six-year span -- from 22,000 in 2006 to 39,000 in 2012. That happened for one important reason: there are more people making money, period, and are thus filing taxes.  

Leaving the bottom behind

Nonetheless, the top of the economic ladder has gotten more crowded during the boom years of expensive oil. But what about the bottom? 

Check this out. According to Canada Revenue Agency numbers, in 2011 only five per cent of people who filed taxes in this province made $100,000 or more. 

Sheldon Pollett of Choices for Youth says there are far fewer options for affordable housing in St. John's. (CBC)

On the flip side, 55 per cent of those who filed their taxes said they make under $30,000. 

At Memorial University's economics department, assistant professor Scott Lynch says that when you look at the numbers, the lower income brackets haven't budged. 

"If you look over time, certainly the bottom is completely flatlined. So they've gone nowhere," he told me. 

"If you're stuck in the bottom, you're stuck in the bottom." 

He added that the middle class has actually shrunk as Newfoundland and Labrador has moved through a historic boom. 

Not only is the middle class smaller, but according to the 2011 numbers, Newfoundland and Labrador has the smallest middle class in Canada.

In that year, 39.7 per cent of tax-filers made between $30,000 and $99,999. The national average, by comparison, is 42.9 per cent. 

On the ground

How does this all translate at the street level? 

According to Sheldon Pollett, the executive director at Choices for Youth in St. John's, it's the worst he's seen in terms of finding safe and affordable housing for young people. 

When Pollett took started in his current gig 14 years ago, there was housing out there for young people that was safe.

"By and large it was doable. That we could help young people find a decent affordable place to live," he said in an interview. 

"That's not the case anymore." 

Around the corner from Choices for Youth's downtown office, you'll find the Bridges to Hope food pantry. 

The numbers there are going up.

Program director Heather Elliott said she's seeing moms and dads coming in because their low-wage paycheques only get them so far. They need the food pantry to get them to the end of the month. 

"The cost of everything is increasing. Fruit, it's an impossible thing fruit. It's so expensive," said Elliott. 

"Milk — milk is almost $5 for a two-litre. It's almost out of reach of most people who are working within that salary scale," she added.

Sheldon Pollett blames income inequality for making it tougher to crawl out of the hole that is poverty.  

"The solutions of lifting themselves out of that poverty just got tougher because the goal line just got moved that much further away in terms of what it takes to actually maintain a stable lifestyle," said Pollett. 

About the Author

Adam Walsh

CBC News

Adam Walsh is a CBC journalist. He works primarily for the St. John's Morning Show, and contributes to television and digital programming.

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