Lake Wobegon

Have you been wondering why the worst global downturn since the Great Depression seems to have had no effect on the number of new cars in Whitehorse or the lineups at Starbucks? Or that so many people are renovating that this columnist's favourite hardwar

Have you been wondering why the worst global downturn since the Great Depression seems to have had no effect on the number of new cars in Whitehorse or the lineups at Starbucks? Or that so many people are renovating that this columnist’s favourite hardware store has run out of Home Renovation Tax Credit forms?

The reason may be that the Yukon is a little like Lake Wobegon, which Garrison Keillor describes as a place where “all the children are above average.” The difference is that in the Yukon it is a lot of the salaries that are above average.

A recent column pointed out that the top 10 per cent of Canadian earners paid 52 per cent of the country’s total income tax, according to a 2005 Statistics Canada report. Which raises the question of how much of Canada’s total paycheque they snaffle up in the first place.

The answer is that the top 10 per cent earn 36 per cent of total annual income from all sources. In terms of wealth, as opposed to annual income, the wealthiest 10 per cent enjoy slightly over half of the Canadian total. The top 10 per cent earners are not necessarily also the wealthiest 10 per cent, but as you can guess, there is a lot of overlap.

At the other end of the income curve, the bottom 30 per cent of earners garner about six per cent of the total Canadian paycheque.

As Karl Marx and others have pointed out, this is not a new phenomenon. In fact, after a long period of increasing income equality in the 20th century, recent years have seen the trend reversed. Some have blamed automation, international trade or immigration for the stagnation of middle class earnings since 1990. Others have pointed to the emergence of a class of highly paid knowledge workers, from software engineers to bankers (as we have all become painfully aware), who seem to have captured most of the benefits of globalization.

But what about the Yukon? According to 2006 data from Statistics Canada, Yukoners with total incomes over $80,000 per year (which is roughly the top 10 per cent) earned 31 per cent of the total and paid 44 per cent of the income tax. This is a slightly more egalitarian outcome than Canada, as noted above.

Yukoners earning less than $20,000 per year (about the bottom 30 per cent) received 6.3 per cent of the total, also just slightly better than the national figures.

But what’s really different about the Yukon is inside the top 10 per cent. We have fewer super-rich and a lot more of the merely very well paid. In 2006 there were 60 Yukoners with incomes over $250,000, which is less than half the national proportion. But 10.8 per cent of Yukon earners had incomes between $80,000 and $150,000, almost double the national figure.

There were also significantly more Yukoners earning $60,000 to $80,000, more than would be explained simply by the higher cost of living in the Yukon.

One explanation is the number of government jobs and their payscales. For example, a teacher with the minimum qualifications and 10 years of experience will crack the top 10 per cent, according to the current Department of Education pay grid.

The number of relatively well-paid people in the Yukon explains a lot about how well the local economy has been weathering the global recession.

But it also makes it easy to forget that 30 per cent of Yukoners are getting by on less than $20,000 per year.

Keith Halliday is a Yukon economist and author of the Aurore of the Yukon series of historical children’s adventure novels. His latest book Game On Yukon! was just launched.

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