Preface

Michael Walker

One of the most well-worn phrases of social reformers and political pundits is that ``the rich are getting richer and the poor are getting poorer.'' In recent times, this has been joined by the equally depressing notion that our access to affluence is stagnating--that the honey pot is actually shrinking in size overall. A careful attempt to trace the origins of these ideas finds that they are based on speculation and erroneous impressions about the real world. An attempt to get to the facts is frustrated because, in spite of all of the data that we have for making such an assessment, there has been no systematic attempt to assemble comprehensive measures of how the way we live has changed over the decades.

Once again, as he did with his measures of poverty in Canada (Sarlo 1992, 1994, 1996), Professor Chris Sarlo has come to the rescue with a carefully compiled index of living standards. These measures, contained in this Critical Issues Bulletin, provide for the first time the ability to discern what has been happening over an extended period of time to the conditions of life that Canadians enjoy. Moreover, they give a basis for considering the comparative increase in affluence amongst those at the bottom and those at the top of the income distribution.

Rather than looking only at the measures of income, Sarlo has cast his net broadly and assembled an index that includes, in addition, consumption, access to household facilities, education, life expectancy, unemployment, wealth, and the fraction of the population that is not poor. Each of these elements measures a different aspect of the quality of life that Canadians enjoy. In combination, they reveal a much more complex picture of what has been happening to our standard of living than is captured by income alone.

Depending upon which dimension is in focus, the gap between the rich and the poor has either not changed or has narrowed modestly. But, the overall standard of living of Canadians at all income levels has improved dramatically over the several decades that Sarlo examines. His careful analysis leaves very little room for the pessimistic outlook that often attends a discussion of growth in real income.

Along the way to his up-beat assessment, Sarlo provides a compendium of fascinating information. For example, he formulates a sensible and precise definition of who is poor and who is rich. He shows what the ``income distribution'' would look like if all citizens had exactly the same income over their lifetimes but there was uneven distribution of births over time. Astonishingly, this hypothetical equal-income society reveals a pattern where the bottom one-fifth of the population would get 9.2 percent of the income and the top one-fifth would get 31.6 percent!

If you have ever wondered about what is happening to our living standard, you will find Canadian Living Standards: 1998 Report fascinating. I heartily recommend it to you. Certainly, the Fraser Institute has been very happy to provide Professor Sarlo with the support to complete it, and is publishing it in the hope that it will stimulate a reconsideration of this important topic. It should be noted, however, that Professor Sarlo has worked independently and that the views he expresses may not be those of the members and the trustees of The Fraser Institute

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Last Modified: Wednesday, October 20, 1999.