Hard-pressed B.C. families whose income stagnated during the boom years no matter how hard they worked are about to get a brutal wake-up call.
With living costs rising sharply, their wages seem certain to decline in real terms.
This stark reality poses a direct challenge to business leaders who championed low-wage strategies to stimulate the economy – including reductions in employment standards and union rights – as the Gordon Campbell Liberals took power a decade ago.
What now?
“We have a hamster-wheel problem,” said UBC professor Paul Kershaw, “where the wheel is turning and turning, but we’re not going anywhere.”
He pointed out that the wages of young B.C. families in the under 45-age bracket have flat-lined since the 1970s, with household incomes in the group actually declining 6% since 1976.
Housing costs rose 149% during the same period. Without child care or decent parental leave programs, young parents shelled out the equivalent of a second mortgage to cover babysitting and other parenting costs.
And don’t tell them hard work will help them get ahead: Canadian workers typically work 300 hours a year – almost eight full weeks annually – more than their Dutch or German equals and have nothing to show for it.
Kershaw found that it’s a different story for the over-45 generation, whose pension earnings and real estate equity will shelter them in their twilight years.
He said that, across Canada, average household income actually increased $35,000 since 1976, but none of it went to young families.
This “generational tension” uncovered by Kershaw is a Canada-wide phenomenon, but by far the worst right here in The Best Place On Earth.
“No other province in Canada reports a decrease in the average young couples’ household income,” Kershaw wrote in a September report.
“Nor does any other province report as large an increase in the cost of housing as does B.C. Together, these trends reveal that the standard of living for the generation raising kids has deteriorated more in B.C. than in any other part of the country.”
Now things are about to get worse.
According to Statistics Canada, average weekly earnings in B.C. declined .1% in September after nine months of relative stagnation. With wages declining .3% nationally, labour economists expect the situation to worsen, not improve.
Numbers this bad will set the scene for a rough round of collective bargaining during the coming year.
But Kershaw warns that even massive breakthroughs by unions – an unlikely prospect – would not be sufficient to give hard-pressed young families a breather.
He’s championing a New Deal for Families to redress the imbalance by focusing national and provincial policy changes at the root of the problem.
He wants to help young families avoid the huge costs they’re bearing to raise their children. (Action on housing costs is another area he believes will take federal and provincial action.)
He says a national child-care program and dramatic expansion of parental leave provisions would provide immediate relief.
Flextime programs would ease the pressure as well, giving parents more time at home. He pegs the cost of his ideas at $22 billion nationally.
The benefits for employers?
Kershaw has calculated that the economy is already paying $4 billion a year in lost productivity as beleaguered parents phone in sick or simply drop out of the workforce to juggle economic and family pressures.
Are business leaders ready to look at Kershaw’s solutions? Don’t hold your breath. •
