Sunday, February 19, 2006

The rich ain't like us

Last week (February 13, 2006) I read an article from the Ottawa Citizen, quoting a study done by the Vanier Institute for the Family, that shocked me. I meant to post on it sooner, but haven't found the time until now.

Cash-strapped Canadian families are racking up debt at an alarming rate and the record number of households declaring bankruptcy will continue to rise unless people tighten their belts now, a new report warns.

"The alarm bells are ringing louder than ever," says the Vanier Institute for the Family, in a report on the state of family finances in Canada released on the weekend.

"They rang for governments and for many businesses and they did something about it. It is now time for families to do something about their own situations."

The average household income is now about $55,000 a year, roughly the same as at the start of the decade and up only one per cent, or about $500, from 1990.

In contrast, average household debt now stands at about $70,920, up 16 per cent from 2000, and 40 per cent from 1990.

"On average, households are putting nothing away for a rainy day, for a bout of unemployment, or for retirement," the report says.

That Canadian families are facing escalating debt does not surprise those of us raising families. What shocked me is the very little increase in average family incomes since 1990.

Those of us who pay attention, even peripherally, to the grotesque increases in executive pay packages over the past 15 years cannot help but compare what (often unsuccessful) captains of industry are earning in comparison to the average Joe and Jane. A $500.00 increase for families since 1990! That's it.

This is really appalling. We are getting tossed the crumbs.


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