Income Inequality “No Big Deal” according to Economists

By Diana Daghofer

In North America, the Occupy movement cast the spotlight on an issue that has been the focus of grave concern around the world – income inequality. So the media flurry that came with the release of Statistics Canada’s latest report on the Income of Canadians (September 11, 2013) was no surprise. CBC’s Kelowna-based Daybreak South (September 12, 2013) and the CBC national show, The 180 (September 13, 2013), are two examples that featured leading economists, both of whom were completely uninformed of the health, social and even the economic costs of income inequality.

The numbers simply confirm what we all know – the rich are getting richer, leaving the rest of us behind. At an average of $381,000 each, the richest 1% of Canadians earn more than ten times the average Canadian income. More than the numbers, though, it is the response from leading economists that is troubling for the future of our country.

Take, for example, the response to Daybreak South host, Chris Walker’s, excellent question “Why does it matter that there is a gap?”  His guest, UBC Okanagan economics professor Ross Hickey, was pretty nonchalant: “Things have been going better for most of us. The gap matters because people care about it. Extreme wealth bothers people.” The good professor proceeded to talk about the value these wealthy few bring to our nation: “There is no reason to try to trip these people up, because a lot of what they are doing is fuelling the economy and providing jobs for those at the low end of the income distribution.”

On CBC’s The 180, guest Terence Corcoran, editor of the Financial Post, echoed those sentiments, actually saying, “Inequality is not a bad thing. It is inevitable…in any political system.” When asked whether he thought anything should be done about growing income inequality in Canada, he said, “What’s the point? What are we trying to accomplish?” Well, I would ask him, “How about saving lives?”

No reason to reduce the gap?

Public health practitioners, and many beyond our circle, know that the social determinants of health – with income leading the way – are the prime predictors of disease and illness. Living conditions out-trump the effect of any behavioural risk factors, including diet, exercise and even tobacco use.[i]

Here are some of the effects of income inequality on health, comparing those living in neighbourhoods with the lowest 20% average income in Canada to those in the wealthiest 20% average income:

  • Infant mortality is a very sensitive indicator of societal health, and Canada is a healthy place, right? So it would likely surprise most Canadians that 40% more babies die in their first year of life in our poorest neighbourhoods (7.1 of 1000 live births) than our richest (5.0 of 1000 live births).[ii]
  • Suicide rates in the lowest income neighbourhoods are almost twice as high as in the wealthiest neighbourhoods.[iii]
  • Men in Canada’s wealthiest neighbourhoods live, on average, almost 4.5 years longer than those living in our poorest neighbourhoods.1
  • People in our poorest neighbourhoods are almost one and a half time more likely to have a chronic disease than those in the wealthiest neighbourhoods, and almost twice as likely to be hospitalized for them.2

Literally hundreds of research reports show us that health inequities in Canada are widespread and affect us at every stage of life.

Does Wealth = Health?

It is true that, at every step up the income ladder, people are healthier, overall. The economists pointed out that the incomes of the poor are increasing. So, does more wealth mean better health? Not necessarily. It is actually the gap between the rich and poor that is the best indication of health, or the lack thereof. Countries with the smallest gap between rich and poor are those that report the best health of their populations.2 Of course, those countries take an active role in distributing resources more equally among their populations, and tend to invest more in their social infrastructure.1 In other words, income inequality – leaving people in poverty – is a choice that governments (and those that vote them in) make.

The Financial Impact

Leaving lives lost for a moment, more illness clearly increases healthcare costs. In 2010, the cost of ‘avoidable’ and ‘excess’ hospitalizations was over $400 million.3 And it hits us at the other end of the economic scale, too.  When people are sick, they can’t contribute to the workforce and other economic productivity.

So, while Messrs. Hickey and Corcoran could be excused for not recognizing the health impact of the income gap, they should understand its economic impact. In 2011, the International Monetary Fund identified “the increase in inequality (as) the most serious challenge for the world.”[iv]

Researchers, policymakers, the Canadian Medical Association and countless public health practitioners have expressed deep concern about the health, social and economic consequences of the increasing gap between rich and poor in Canada, and around the world. I applaud the media’s efforts to cover the issue, but the next time they interview economists about income inequality, I would ask them to include a public health professional who can bring to light the many evidence-based solution to this problem. Many people believe that poverty is inevitable. It’s time we show them that it is a choice our governments, with voter support, have made.

Diana Daghofer is a public health consultant living in Rossland, British Columbia and a member of the Public Health Association of British Columbia

References and Further Reading


[i] Raphael D, Social Determinants of Health: Canadian Perspectives, 2nd edition, Toronto, ON, Canadian Scholars Press, 2008

[ii] Raphael D (2010), Health Equity in Canada. Social Alternatives Vol. 29 No. 2, 2010

[iii] Canadian Medical Association (2013), Submission on Motion 315 (Income Inequality), Submitted to the House of

Commons Standing Committee on Finance, April 25, 2013 [cited September 12, 2013]. Available from: http://www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/Submissions/2013/Income-inequality-Brief_en.pdf

[iv] Philip Aldrick, “Davos WEF 2011: Wealth Inequality is the “Most Serious Challenge for the World,” The Telegraph, January 26, 2011.

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Need We Say More

By Ted Bruce

Need we say more? Apparently yes. The evidence on the impact of low income on health such as that described by Dr. Patricia O’Campo just keeps piling up.

When many people working full time cannot get out of poverty. When many people working full time cannot get out of poverty. And when we ignore studies showing that acting on critical social determinants of health such as quality child care makes economic sense for our society, it is clear there is something very wrong. The need to invest in poverty reduction is an elephant on top of the table not under it. Fortunately, we know from other public health efforts that the evidence eventually does lead to action. Just consider the 12 great achievements in public health as recently documented by the Canadian Public Health ssociation: http://www.cpha.ca/en/programs/history/achievements.aspx.

It can be frustrating to see a lack of action, but that is all the more reason for public health practitioners to speak out about the evidence. Thank you Dr. O’Campo.

Ted Bruce is the Past President of the PHABC

Further reading:

Social policy is health policy. Vancouver Sun Opinion: Poverty linked to multiple health problems in new mothers, study finds | Patricia O’Campo |  August 28 2013

BC’s welfare recipients need immediate relief | Seth Klein, Lorraine Copas, Adrienne Montani | April 24 2012

2012 Child Poverty Report Card | First Call: BC Child and Youth Advocacy Coalition | November 2012

15 by 15: A Comprehensive Policy Framework for Early Human Capital Investment in BC | Human Early Learning Partnership | August 2009

Great Ideas Have Long Lives

By Ted Bruce

The election is over and, as they say, the hard work starts. The spin doctors, backroom strategists, pundits and pollsters take a break and the world of policy development and advocacy carry on. Policies that are essential to improve the health of the population require a long and sustained effort. Public health policy work is arduous and although there are quick wins for the most part the complex web of causality requires multiple policy and program interventions implemented over a long time. And often efforts must push against countervailing forces that at times seem insurmountable.

But they are not insurmountable and the ideas behind population health are not easily dismissed. Social justice, fairness, health and wellbeing are foundational to the notion of reducing health inequities and preventing disease before it sets its roots.

The election campaign proved an opportunity to raise awareness of health inequities and the importance of poverty reduction and disease prevention. In looking at the election campaigns, political party platforms and the media and political dialogue, there was certainly considerable interest in the idea of poverty reduction. Although there was not agreement on the policies needed to reduce it, it is safe to say that it will likely maintain momentum as a post election topic. The need for a new prevention paradigm for health care did not get much discussion. Clearly, public health has a way to go to captivate the political dialogue on that issue.

This is not new. These issues have been at the forefront of public health for a long time and will continue so. Why? In part because the alleviation of human suffering and the promotion of health and well being are central to public health and the root causes of health inequities must be a central focus if public health is to be successful in its mission to improve health for all citizens – not just some citizens. And the policy agenda is complex. The solutions require a huge paradigm shift in a policy environment that has diminished the valuing of public services and has emphasized individualism over collective action. And they require considerable vision and commitment on the part of government and non-governmental leaders. Election time is a window to push for that vision. Post election is a time to continue to educate the public, to bring the evidence forward to the decision-makers and to do the hard work of policy change.

PHABC’s website for the election has some great resources for the continuing dialogue about health inequities, poverty reduction and disease prevention. PHABC has had considerable feedback that an on-line toolkit and the social media campaign were an effective contributor to the dialogue on public health. As co-chair of the PHABC Policy Advocacy Committee, I know this strategy will continue.

Change does not come easy. There are risks associated with change but great ideas deserve risks.  Health and well being for all citizens, social justice and public health – these are great ideas. Elections come and go. Great ideas have long lives.

– Ted Bruce is the past-president of the PHABC

Health Officers Council release report on health inequities in BC

By Dr. Victoria Lee

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Today, the Health Officers Council of BC (HOC) released an updated report on Health Inequities in BC.  Analyses of life expectancy in British Columbia (BC) by income groups between the periods of 2002‐6 and 2006‐10 found a disturbing trend: the gap in life expectancy between Local Health Areas (LHAs) with the highest socio‐economic status (SES) and those with the lowest SES has widened dramatically.  We know that poverty is bad for our health.  People living in the lowest SES areas are more likely to suffer from health risks and complications of illness, while less likely to be able to access care.

We also know that tackling poverty head on can shift the trends that we’re observing in BC.   BC is one of the two provinces in Canada that does not have a provincial poverty reduction plan in progress or development.  We can start to reverse the trends by developing and implementing a provincial poverty reduction plan with critical milestones, indicators and evidence-based strategies.

Read the full HOC report ‘Health Inequities in BC 2013

Dr. Victoria Lee is the Co-chair of the Population Health Committee, Health Officers’ Council.