Thursday, May 25, 2023, 8am CST
For Immediate Release (Winnipeg, Treaty One): A new report released online today finds income inequality is getting worse in Manitoba: the market income of the bottom 20 percent of Manitoba families declined while the top 20 percent of Manitoba families received greater income increases than the national average.
The Chasm Widens: Inequality in Manitoba Update by Dr. Ian Hudson finds income in Manitoba is not only lower, but remarkably unequal. The average market income of the lowest decile was $4,800 in 2020, an amount on which it would be completely impossible for a family with children to meet even their most basic needs. The average market income of the top decile was $268,800, 56 times the average market income of the lowest decile.
Agnes Colisao is a parent from Brandon whose family lives on a single income because Agnes cares for her child with a disability. Agnes, a newly arrived immigrant, says, “we struggle to live on a single minimum wage income. I had to resign from my job to care for my daughter. Now we are very hard up. There is not enough for expenses, especially rent and food.”
Beyond low incomes, inequality affects all Manitobans. Studies have shown that the greater the inequality, the greater the poor health outcomes even for people considered to have adequate incomes. Andrew Lodge, Medical Director at Klinic Community Health, states, “income inequality is strongly related to other social outcomes. For example, evidence suggests a well-established relationship between rising inequality and worsening health outcomes.” Indigenous populations in Manitoba experience this more acutely related to the continued effects of colonization and discrimination.
The report outlines the important equalizing effects of government redistribution in the tax and transfer system. The COVID-19 pandemic was cause for the redistributive role of the government to increase dramatically in 2020. Because of the collapse of market incomes in Canada in 2020, the federal government played a crucial role in preventing economic disaster for Canadian families in the bottom two deciles. For both of the lowest two deciles, market incomes fell between 2019 and 2020, yet because of increased government net transfers, after-tax income increased.
“The Chasm Widens” outlines policy recommendations both of what not to do to lessen the inequality gap (eg. Manitoba’s Education Property Tax rebate), and rather focus on solutions that target the root causes of inequality in market incomes such as higher unionization and setting the minimum wage at a Living Wage.
The report can be found at the following link: https://policyalternatives.ca/publications/reports/chasm-widens
About the Author
Ian Hudson is a CCPA Manitoba research associate and Professor of Economics at the University of Manitoba.