Canada's economic growth v. our quality of life
Canada’s economy has boomed for much of the past two decades, yet that expansion has not sparked equally robust improvements in Canadians’ quality of life. Marc Lachance, part of the Canadian Index for Wellbeing's Research Advisory Group, took reader questions in a live chat.
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Hi and thanks for joining us today. I'm an editor with The Globe and Mail's business websites. The Canadian Index of Wellbeing, a composite guide that claims to be one of the first of its kind in the world launched today. It seeks to provide a fuller picture of the country’s economic health than the widely used gross domestic product. -
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You can read more about the report and its findings in an article by reporter Tavia Grant in today's Globe and Mail here www.theglobeandmail.com
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The index of wellbeing aims to measure the overall quality of life. For the first time, we can compare our progress on wellbeing in relation with the GDP which was, until now, used a the sole measure of economic progress. The CIW shows that our progress is much less than the GPD for the last 15 years.
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Our living standards are growing, sure, but as opposed to previous generations whose increases were based on a shared slice of the growing economy, seeing that adjusted wages have been stagnant for the last 25 years or so, our increased living standards are bought on credit. Are we at the end of the wave started a couple hundred years ago where each generation had living standards better than the last and were actually paid for?
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The index released today measured our progress starting in 1994. Although we can't measure the inequality prior to 1994, the living standard domain (as part of the 8 domains of the CIW) has illustrated that the ratio of top 20% to bottom 20% of family incomes has increased by 13.9%.
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I think there are 2 aspects of this question that affect the greatest number of people. One is the relative cost of housing, particularly in Toronto and Vancouver, vs income growth. It means fewer people can access housing of a quality comparable to that of there parents, down payments are smaller, and amortization periods longer. One question is how to ensure housing costs don't and aren't bubbling up in excess of what the market and people can really bare.
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The second aspect that I think is notable is the lack of vacation time (or increase in same) for Canadians (and Americans). While much of the world (not just Europe) enjoys 3, 4 and even 5 week paid vacation times, Canadians find themselves largely stuck at 2 paid weeks off each year, particularly in low-paying jobs or early in one's career. The notable exception being Saskatchewan which has 3 weeks paid vacation by law, and does not seem to be suffering for it at all.
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One of the strengths of the index is to connect the dots between different domains. Canadian are spending more time working in non-standard hours and precarious jobs, which may be one reason why people are getting less vacation time. As the CIW moves forward, we will keep an eye on this.
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The CIW highlights where we are progressing and where we need more action. The CIW covers all the dimension of wellbeing which matter to Canadians. We invite everyone to start the conversation on what is important to you to improve your overall quality of life.
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L Harder posted this in the comments on Tavia's story today: Needs to go back a century to get a good idea of how things have done. Things began to slide much earlier than the 90's. www.theglobeandmail.com
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It seems that Canada just needs to keep up with Saskatchewan on adding a week of vacation for the new job entrants - 3 weeks instead of 2 weeks for starters. Canada's taxes are already through the roof - due to high costs of health and education based on what the working class can pay - so instead of taxation - should the Canadian government make it a priority to be more efficient with the tax dollars that are spread between Health Care and Education - get more bang for the tax buck? Does this index add transparency to this?
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The CIW started to measure the progress in 1994 to coincide with the availability of several important data sources from Statistics Canada. Some of the underlying indicators may be available prior of 1994 but not enough to assess our wellbeing in all 8 domains.
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Isn't it inevitable in an advanced economy that the rich poor gap would grow? Low skill labour that many people can do should really only be worth a limited wage, whereas high demand highly specialized professions ought to command more and more for their services that no one else can do. I would argue for example that a grocery bagger's job hasn't changed much over the past half century whereas a surgeon's job has, that he or she now has to specialize or even sub-specialize.
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THe CIW aims to make available indicators from different domains which would enable a dialogue on how the progress of one domain, such as Education, impact other domains such as Health. Policy makers will now have a tool to connect the dots to solve issues like the one you mentioned.
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Housing prices are extremely overly inflated in Toronto and Vancouver. The younger first time home owner generation suffers the most. If they can afford to buy an overly inflated house to begin with, will the bubble burst shortly after, when the big global crash that seems eminent happens?
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We are very pleased that Canadians are responding positively to the index. This is just a start of a conversation that we all need to have. Wellbeing is very complex to measure. We now have a tool which can guide us in this dialogue to improve things that matter to Canadians.
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