Age, not gender, leads new income gap

Conference Board of Canada reports young workers falling behind
|labour-reporter.com|Last Updated: 09/23/2014

Of late, a recent shift in the labour market has seen a new trend emerge in the income divide — age, rather than gender.

According to a report — The Bucks Stop Here — released today by the Conference Board of Canada, income inequality between the generations has ramped up significantly. In it, the independent research group pointed to three decades of progress in reducing the income gap between men and women — but warned the widening chasm between younger and older workers that could threaten future economic growth and social stability.

“Age, rather than gender, is becoming the new divide in our society,” said David Stewart-Patterson, the board’s vice president and co-author of the report. “The Canadian generation at the top of the income heap today fought long and hard for principles like equal pay for work of equal value, but their children now face lower wages and reduced pension benefits even for the same work at the same employer.”

As such, relative to their elders and over the past 30 years, younger workers are making less money, regardless of being a man or woman, single or a couple, and both before and after tax.

Of course, it goes without saying that the more experience, the more pay you’ll pocket.

However, the average disposable income of Canadians between 50 and 54-years-old is currently 64 per cent higher than that of 25 to 29-year-olds — up from 47 per cent in the mid-1980, the report noted.

As the baby boomers march closer to retirement, Canadians will be relying on a smaller share of the population to drive economic growth and sustain the tax base that supports public services. As a result, younger Canadians are trailing dust, Stewart-Patterson said.

“This is a trend that could have serious consequences for employers, for labour unions, for governments and for communities,” he explained. “If the earnings of younger workers continue to lag, we also could see growing conflict within our society between older haves and younger have-nots.”

But the gender gap is far from closed. The size of the income divide between generations was bigger for men, but has been growing faster among women. Between 1984 and 2010, the gap in employment income for men grew from 53 per cent to 71 per cent, while for women it increased a whopping 34 per cent — from 9 per cent to 43 per cent.

The report complied 27 years of income tax data.

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