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Social spending will stimulate economy: CCPA

British Columbia's poor and middle-class families are getting poorer, a fact that does not consider the effects of the recent economic downturn.

A study released today by the Canadian Centre for Policy Alternatives shows that when factoring in inflation, the bottom 70 per cent of B.C. families are now earning less than their parents' generation.

At the same time, income inequality among families continues to widen, with the gap growing to the point that the top 10 per cent now earn more than the entire bottom half combined

The study used Statistics Canada income data from 1976 to 2006 for B.C. families with children under the age of 18. Employment earnings were compared as well as total after-tax income, including income tax and government transfers.

"What was surprising to me was that we have seen such big drops not just in earnings . . . but in after-tax income," said the report’s author and CCPA public interest researcher Iglika Ivanova. 

The study determined that this drop in real after-tax income was higher in B.C. than anywhere else in Canada. Ivanova said it shows the provincial government is failing to live up to its responsibilities.

The CCPA is advocating a number of policy recommendations, including raising the minimum wage to $10.60, raising taxes for the wealthiest and increasing social assistance rates and accessibility.

The organization is also calling on the provincial government to expand social services, such as universal child care, which Ivanova said will benefit all B.C. families.

While acknowledging that these proposals will require substantial public money at a time of government revenue shortfalls, she said the investments will pay for themselves if people are patient.

"Putting money into poverty reduction, we're going to stimulate the economy," she said.  "We will recover faster that way and we will recover the money."

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