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Income Security and Productivity

February 3, 2012

Income security is a key determinant of health related to the mental health of communities. Canadian and international studies support the role income security plays in defining the socio-economic status and its relation to health outcomes. Those representing higher social and economic strata are more likely to experience more positive states of (mental) health and well being than those in lower strata. Additionally, evidence indicates that as the gap between rich and poor increases, the health of the population suffers.

Income Trends in Canada

The economic boom of the late 1990’s did not benefit most of the people of Canada. Recent figures from Statistics Canada show that between 1984 and 1999, the wealth of the top 20 per cent of families rose by 43 per cent while the wealth of the bottom 20 per cent fell by 51 per cent. Canadian society has become increasingly polarized on the basis of income and has lead to significant consequences in economic terms affected the employers, employed and unemployed.

In 1999, there were 1,025,000 families and 1,677,000 unattached individuals living in poverty in Canada for a total of 4.9 million. In the midst of prosperity, low income families with children are living on average more than $9,000 below the poverty line. More than 40 per cent of these families were headed by persons who were employed. The working poor, especially those with dependents, are not able to make ends meet.

Seniors poverty rates declined from 20 per cent to 17 per cent over the last decade. A major reason is the trend of making CPP premiums available. The CPP/QPP was established in the mid-seventies and has only recently paid out full benefits to Canadians.

Human Resources Development Canada (HRDC), now Social Development Canada (SDC) research shows that those who are poor for an extended period of time have lower education and are more likely to be unemployed or working fulltime.

The Consequences of Low Income

Low income Canadians are most vulnerable to poor health. For example, those with the highest incomes live five years longer and are one-quarter less likely to die of heart disease. It has taken the poorest fifth of urban Canadians until the mid-1990s to reach the life expectancy experienced by the richest fifth 25 years earlier.

Chronic and episodic illnesses such as arthritis, rheumatism, diabetes, heart problems, mental illnesses, cancer and hypertension are twice as common for an Aboriginal person who generally also has a much lower socioeconomic status than non- Aboriginals. Chronic conditions are also more prevalent in poorer regions of Canada. Maritime residents in 1996 reported higher blood pressure scores compared to the national average.

In Canada, approximately 15 percent of children and youth (one in seven) experience mental health problems serious enough to affect their development and functioning. Poor children are more likely than children from higher-income families to experience low self-esteem and associated mental health difficulties, disabilities, injury and exclusion from cultural activities and/or sports.

Children are our future; Canada can not stand by and allow these issues to continue. It is time that significant investments are made to enable a stronger economic base in this country by ensuring that programmes and services are available to promote the mental health of all, support the recovery and resilience of people experiencing a mental illness and ensure that children and their families have the support and services available before the problems escalate.

A Case against Social Exclusion

Those who live in poverty have constraints on their ability to participate fully in the community as a result of isolation, discrimination and marginalization from decision-making and from an adequate quality of life.

Social exclusion can increase the risk of mental heath difficulties. Research suggests that good social relationships and community involvement can help to protect people in poor material circumstances from adverse effects to their mental health.

Working Poor

The National Council on Welfare’s 1993 report underlined the sharp declines in the value of minimum wages since 1976 and the trend towards part-time, precarious and temporary work instead of well-paid, secure jobs. One result of the diminishing minimum wage is that no minimum wage worker could even reach the 1998 poverty line by working 40 hours a week – even if the worker was without dependents. Such an individual, with one child to support, would have to work 58 hours per week to reach the poverty line in Vancouver where minimum wages are the highest in the country and 103 hours a week in Winnipeg. A couple with two children would have to work 113 hours a week to reach the poverty line in Prince Edward Island and 151 hours a week in Winnipeg.

The economic reality is that greater numbers of middle class Canadians are being exposed to economic insecurity. 45 per cent of adult employees between the ages of 25-59 are employed in flexible forms of work (less than full-time tenured workers). Flexible workers lack job ladders and have few opportunities to increase their real income earning capacity over time. 53 per cent of the adult workforce is in vulnerable employment situations because they lack employment stability and/or market sufficiency. Frequent lay-offs or irregular work without benefits are becoming more prevalent.

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