Report finds rich/poor divide widening

By PAT WATSON

She does not own a cell phone, and it is not because she is afraid of the reported adverse health effects that can result from microwave radiation associated with their use.

She does not own a computer. However, being a woman of the times, one of the things she may have is an e-mail address. She can check her e-mail at the nearest library.

She does not own a car. Although it costs more, she pushes her budget to buy a weekly bus pass for greater convenience in getting to work and running the necessary errands. She buys the weekly pass because she could never afford at the end of any month to find the $109 to buy the monthly bus pass.

For the sake of her two school age children, let’s say, she checks the free weekly papers looking for free events they can go to as a family.

Imagine that those children are under 14 years of age, making them among the 37 per cent of Toronto’s children living below the low-income cut-off rate which, in Toronto, is $21,760 for a family of two and $32,759 for a family of four.

She might not use the Laundromat in the apartment building where she lives very much. When it comes time to do her laundry maybe she does some of it by hand. And, it’s not because she is specifically aiming to contribute to saving the environment. Sometimes, she might use the washing machines, but the dryers are an added expense. By the way, they live in a one-bedroom apartment in a part of the city that is more affordable for them. It could be Thorncliffe Park, Flemingdon Park or South Riverdale. She has a job, maybe working as a personal care assistant in a senior care residence, earning about $25,000 annually. She has no savings. Her one major indulgence is likely cable television. Her daily life rests in the financial landscape of those among the lowest income earners in this city, a world away from the well-to-do.

A report released by the Centre for Policy Alternatives, The Affordability Gap: Spending Differences Between Canada’s Rich and Poor, reminds us that the old saw about the rich getting richer and the poor getting poorer remains true. The study’s author, Steve Kerstetter, notes that: “The poorest 20 per cent of Canadian households live in worlds far removed from the richest 20 per cent (who) in every spending category… spend six or seven times more than the poorest 20 per cent.” Translated into dollar figures, that means that in 2007, when data were collected for the report, the poorest households spent on average $22,339 on food, shelter, clothing transportation and income tax among other expenses compared to about $143,400 on similar expenditures by the richest 20 per cent.

Spending by both groups has increased, but the ability of the poorest to meet the demands of rising costs has not kept pace with the rate of increase in the cost of living. During the era of the Mike Harris ‘Common Sense Revolution’ and beyond, from 1995 to 2004 the minimum wage did not change. Under the direction of the McGuinty Government it has been increased from $6.85 in 2004 to the current rate of $9.50. Under this strain, the working poor and unemployed dealt with the challenge of trying to give a family of four, for instance, a healthy diet at an average cost per week in 2008 of $136.28, an increase of 27 per cent from 1999, compared to the inflation rate of 21 per cent during that period.

These days, the inflation rate, tied into the recession as it is, is falling, but that is due in part to the fall in energy costs. Food, clothing and health care costs have not followed the same downward pattern.

The report concludes that income levels for the poorest must be raised, including welfare payments and further increases to the minimum wage. Such recommendations are far from becoming a reality since the increase in the minimum wage never seems to keep pace with the rate of inflation. In the meantime, depending on which day it is, we hear that on Bay Street and Wall Street the recession is ending or is over. However, that reality has not yet spilled over onto Yonge Street.

On a related note…

It looks like Toronto City Council is starting to prepare public transit users for a hike in fares with press releases describing the Toronto Transit Commission’s $17.4-million operating shortfall connected to the popularity of the transferable Metropass. But public transit is a municipal service, not a source of profit and the cost to use it is already prohibitive for some. The TTC must be made affordable and accessible for everyone across the board.

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