{"id":263724,"date":"2015-05-04T04:15:05","date_gmt":"2015-05-04T08:15:05","guid":{"rendered":"https:\/\/policyoptions.irpp.org\/issues\/rothwell-robson\/"},"modified":"2025-10-07T20:58:14","modified_gmt":"2025-10-08T00:58:14","slug":"rothwell-robson","status":"publish","type":"issues","link":"https:\/\/policyoptions.irpp.org\/fr\/2015\/05\/rothwell-robson\/","title":{"rendered":"A tale of two trends"},"content":{"rendered":"

Are these the best of financial times for ordinary Canadians, as some argue \u2014 or the worst, as others insist? The answer depends on whether you look at income or wealth.<\/p>\n

On the one hand, there’s been some very good news on indicators of household income.\u00a0 At the median, income levels are up, surpassing even gains made by our US neighbours. Taxation and transfers seem to have kept income inequality from skyrocketing the way it has in other countries.\u00a0 And perhaps the best news is that we’ve made important gains in reducing rates of low income for seniors and single parents. We even managed to reduce child poverty by a small but significant amount (down 2.4 percent) in the middle of a recession.<\/p>\n

But this rosy view is based on the assumption that income is the only source of financial security. Of course we know, in our own life experiences, that having some savings and assets makes a world of difference.\u00a0 So we need to look at the other option too.\u00a0 And it shows something very different for Canadians \u2014 something that should be capturing far more attention in the public and among policy-makers.<\/p>\n

As an economic resource, income is a flow.\u00a0 Day-to-day consumption needs are paid out of that flow, and any money left over is categorized as \u201csaving.\u201d\u00a0 But households also save up, inherit, win or otherwise acquire assets: home equity, workplace pensions or cash in bank accounts. Assets not only protect us against unexpected shocks, they give us a foundation to take productive risks (like pursuing higher education or starting a business), and they give us a sense of hopefulness and inclusion in our community.<\/p>\n

At first blush, the data on wealth look pretty rosy, too.\u00a0 Median household net worth (all assets less all debts) has been rising consistently in Canada since 1999. But those gains haven’t been shared or redistributed the way that income gains have.<\/p>\n

Between 1999 and 2012, households in all quintiles saw some increase in their after-tax incomes. The same is not true of household wealth. In that period:<\/p>\n