How is Edmontons 99% Doing?

February 20, 2013

John Rose Chief Economist Financial Services and Utilities

Agenda
International Context Why Worry? Canada and the Provinces Canadian Metropolitan Areas
Cross sectional evidence for Structure

Edmonton and Calgary

Time series evidence for Structure

Be careful what you wish for

Income Share of the Top 1%

USA GBR CAN DEU CHE IRL PRT ITA JPN NZL AUS FRA ESP FIN BEL DNK NOR SWE NLD 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0

2007
Source: OECD

1990

Potential Causes
Globalization Technological Change Shifts in Economic Structure Policy
Deregulation Citizens as consumers rather then workers Taxes and Transfers Flat taxes and a shredded social safety net

Why Worry?
Growth
Stiglitz/IMF greater inequality can slow growth

Stability
James Galbraith unequal economies are volatile

Social Payoff
Wilkinson & Pickett on the broader benefits of equity

Growth in Real Median Income

1982 to 2010
PEI BC Quebec Canada NFLD SASK MAN NS NB ONT ALBA -10% 0% 10% 20% 30% Top 1% 40% 50% 60% 70% 80%

Source: Statistics Canada

Bottom 99%

Changes in Real Median Income

1982 to 2007
PEI

BC

Quebec

Canada

ALBA

SASK

NFLD

ONT

NS

MAN

NB -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Top 1%

Bottom 99%

Source: Statistics Canada

Income Share of the Bottom 99%

100 95

Halifax Montral

90

Qubec Hamilton Ottawa Toronto

85

Winnipeg Regina Saskatoon Calgary

80

Edmonton Vancouver Victoria

75

70 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009

Source: Statistics Canada

The Impact of Structure

Canadas Top 13 CMAs 2010
92

90

Income Share of the Bottom 99%

88

86

84

82

R2 = 0.6473

80 6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Bus Services Share of Employment

Source: City of Edmonton

Income Shares of the Top 1%

23 21 19 17

15 13 11 9 7 5 1982 1986 1990 1994 1998 2002 2006 2010

Canada

Alberta

Calgary

Edmonton

Source: Statistics Canada

Employment in Business Services

120 100

80

60

40

20

0 1987 1990 1993 1996 1999

Calgary

2002
Edmonton

2005

2008

2011

Source: Conference Board of Canada

The Impact of Structure

Calgary
25 23

21

y = 2.0838x - 12.159 R2 = 0.865

Top 1% Share of Income

19

17

15

13

11

5 8 9 10 11 12 13 14 15 16 17

Bus Services Share of Employment

Source: City of Edmonton

The Impact of Structure

Edmonton
18 16 y = 1.4834x - 2.4783 R2 = 0.7091

Top 1% Share of Income

14

12

10

4 6 7 8 9 10 11 12

Bis Services Share of Employment

Source: City of Edmonton

Growth in Real Median Income

1982 to 2010
Canada

Alberta

Edmonton

Calgary

-10%

0%

10%

20% Top 1%

30% Bottom 99%

40%

50%

60%

70%

Source: Statistics Canada

Be Careful What You Wish For

Q&A
John Rose Chief Economist Financial Services and Utilities 5th Floor, Chancery Hall Edmonton, Alberta, T5J 2C3 (780) 496-6070 john.rose@edmonton.ca Updates and newsletter available at: www.edmonton.ca/economicnews