Jim Robb made the “Yukon’s colourful five per cent” famous, but the global Occupy movement has called our attention to the richest one per cent.
Placards at Occupy protests from New York to Rome have railed against the “one per cent” who are alleged to have benefited obscenely as the 99 per cent have suffered in the financial crisis.
So what does the one per cent look like in the Yukon, and how do they stack up to the 99 per cent?
To my knowledge, no Yukoner has a billion-dollar hedge fund, makes obscene bonuses running a bank or invented Facebook. But there is money out there, often in surprising places. I was recently at a party where a cheechako was astonished to discover that the guy in the tattered jean jacket driving the 1998 pickup literally had buckets of gold from his Dawson placer outfit.
According to Statistics Canada tax data from 2008, the most recent year available for the Yukon, the top 1.7 per cent of Yukon tax filers had 10.2 per cent of the total net income. Of these, 0.4 per cent or ninety Yukoners made over $250K and had 5.2 per cent of the total income.
Unfortunately, Statistics Canada doesn’t break down the data for the top one per cent and makes us look at odd groups like the “Top 0.4 per cent who make over $250K.” And in case you were reaching for your pitchfork and torch, privacy laws prevent them from publishing names and addresses.
Now if you listen to the people in the comfy seats at the front of the plane to Vancouver, you’ll hear that $250K doesn’t go as far as it used to. Probably few of these people consider themselves “rich.” After all, New York hedge fund managers spend that much on a birthday party. But it’s still impressive, considering that these 90 Yukoners pull in more income than the bottom 4,730 Yukoners.
Yes, those numbers are right. Ninety people make more than all the 4,730 people at the bottom of the income ladder. We have to keep in mind that these numbers are based on tax filing, and not everyone files a tax return or reports everything they earn. Also, it is for individuals, and some of the 90 are probably married to some of the 4,730. But it is still a remarkable split.
The last decade has been good to the top one per cent. In 2001, the top 20 Yukon tax filers snaffled up a paltry 1.2 per cent of total income, earning $381K on average. In 2008, the top 90 earned $596K on average. To put this nearly doubling in average income into perspective, Whitehorse prices went up around 14 per cent over the period.
Of course, you have to keep in mind that we have a highly progressive tax system. The top 1.7 per cent making over $150K earn 10.2 per cent of the income but pay 19 per cent of the total tax. That’s more tax than the 15,170 Yukon tax filers who made less than $50K. Roughly one-third of Yukoners provide 86 per cent of our total income tax take, while thousands of low-income Yukoners pay no income tax at all.
Fox News and Republicans in the US have been making a big deal of this “unfair” tax system lately. Believe it or not, the Heritage Foundation even released a study suggesting the “poor” were getting too sweet a deal, pointing out that 99.6 per cent of them have fridges and 64 per cent even have cable or satellite TV.
Satirist Jon Stewart ripped into this point of view, pointing out tongue-in-cheek that you could solve the deficit problem by taking “only” half of everything the bottom 50 per cent earn.
The bottom 30 per cent’s incomes have improved faster than inflation from 2001 to 2008 (although they remain very low). Average income for the bottom 30 per cent was around $7,500 in 2001, and about $10,600 in 2008. That’s up about 25 per cent after inflation is factored out. Also, we don’t have data to back this up but it is likely that many of the individuals in the bottom 30 per cent in 2001 moved up the ladder during the period. New Canadians and young people likely moved into their spots in the bottom 30 per cent.
This raises a real policy making question. If I were in government, I would be very interested in who the top one per cent and bottom 30 per cent were. I don’t mean names, but how they got there.
If the top one per cent got there by finding copper and selling it to China, or building houses or inventing the iPod, that would be good. If they made their money because they had lobbied for sweet government contracts or had some insider deal, that would be worrisome.
For the bottom 30 per cent, it is important to know how many are trapped in the poverty cycle. How many of 2001’s bottom 30 per cent got training, got a job, and moved on? And how many are still there?
It would also be important to look at the middle class. Many middle class people feel like they are treading water, and some national statistics suggest that mid-income earners have seen their real incomes stagnate in recent decades. In the Yukon, it’s hard to tell from the statistics but they suggest earnings for the middle 40 per cent didn’t grow too much faster than inflation.
Taxfilers in the top 70 per cent to 90 per cent, just below the top 10 per cent, appear to have done better. Again, there are some statistical issues but their incomes appear to have gone up around 15 per cent after inflation.
Unlike many other parts of the world, the Yukon seems to have had a fairly broad-based improvement in incomes over the last decade, albeit with some large groups of people treading water. We also have a large number of Yukoners with low incomes by anyone’s standards (except Fox News’).
A broad-based rise in incomes is to have been expected given the massive spike in global commodity prices and constantly rising transfer payments from Ottawa since 2001.
But we have to be concerned about the fact that we still have large numbers of low-income Yukoners, as well as many who seem not to have benefited fully from the boom.
Winter may chase away the tent city on the legislature lawn, but this issue isn’t going away. In fact, it may get worse if the global economy stumbles and commodity prices fall.
Keith Halliday is a Yukon economist and author of the Aurore of the Yukon series of historical children’s adventure novels.