Trends Leaders Cannot Ignore

In September I am doing six workshops at Tamarack’s Community Change Institute. One of the workshops is: Ten Trends Leaders Cannot Ignore. I am gathering data right now, investigating trends identified by others; there are so many trends we have to pay attention to that I am not yet certain of the ten I will showcase.  But here are a few trends I am tracking right now that I believe qualify for some substantive, authentic attention by our political, economic, and community leaders.

All the charts below are all based on data from Statistics Canada. Ask yourself what the implications are of these trends and what options we have to address them. While you might take issue with my commentary, the data is the data. Do you think these trends and patterns suggest good news for our society going forward?

I have written before about Wealth and Income Inequality. While the gap in Canada is not yet as severe as the worldwide trend, the gap is significant and it’s getting wider, as the chart below indicates.

Those with good incomes (the 20%) keep seeing it grow over time. The middle 60% have seen very small gains overall, clearly not enough to weather the ever increasing cost of living. Those with the least income have seen no gains and in some cases they were worse off in 2011 than they were in 1976.

Approximately 25% of Canadian workers are considered to be low income workers, and that percentage is the highest in the world, relative of course to the economy and employment situations in across nations. In our economy, making $15.00 per hour or less qualifies a worker as low income. Some think $15.00 per hour represents a living wage, but imagine how much living you could do if you were single or a parent with a kid or two making that.

Many Canadians earn far less that $15 per hour. For those earning the minimum wage in their province, they face eking out an existence for around $5.00 less per hour, generally. Some argue that  a low minimum wage helps students work during the summer or young people enter the work force. No doubt there is some truth in that but the majority of minimum wage earners are not students; they are adults trying to make a living. Canadian big business has become increasingly reliant on minimum wage employers to generate profits. In 1998, big business hired 29.6% of all minimum-wage employees in Canada; by 2012 they employed 45.3%.

When people do not earn sufficient income, how do they deal with the rising costs of accommodation and food and clothing? Food Banks come to mind and other charitable services that help with basic needs. But a strong indicator of economic problems across our communities is Canadian Household Debt. See the graph below.

The growth in the debt to income ratio for Canadians generally has skyrocketed since 200 by more than 50% while incomes on average have grown 16.8% (and remember that growth is owned mostly by those in the top 20% income brackets).

Low, stagnant wages are the common experience of Canadians in what we are often told is a strong, robust economy. Debt is rising and the income and wealth gap is as well. The importance of low minimum wages to corporate profits is also escalating. There has to be a tipping point in there somewhere, doesn’t there?

What are the implications for tax revenues? For health and social programs? To what extent should the Federal Government launch needed social programs like the Child Tax Credit/Benefit that, while lifting thousands of Canadians above the poverty line also help businesses keep wages low?

I worry about these trends. I have to imagine you might too. Now just to add more weight to the concerns I have, consider how the aging of the population is affecting and will be affecting the labour force.

We all know our population is aging, but this graph drives home just how much. Canadians between the ages of 80 and 89 are the fastest growing cohort in Canada. Between 2006 and 2031, Statistics Canada projects the overall growth in Canadians over 65 will be nearly 120%. In the meantime the growth rate for the youngest cohorts in our population is actually decreasing as shown below:
This reduction in the birth rate has impacts on our work force. Together, these two trends, plus the fact that current immigration rates will not make up for the lower birth rate, already appears to be having an impact on our Labour Force Participation Rate:

This rate has been decreasing since 2008 and I can’t see how that trend will reverse itself, given current circumstances.  While an aging population will increase health care costs and other support, the tax revenue from the retired will be less than when they were working.

As well, Stats Canada projects that whereas we had 6.5 workers per senior in 1976, current trends indicate that ratio will be closer to 2 to 1 by 2051.

How will we look as a country then?

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