Last Updated: Friday - 09/24/2010
Week of March 1, 2004
Too many Canadian families teeter on bankruptcy's edge
By ART BABYCH
Canadian Catholic News
The top 20 per cent of Canadian families saw their share of the total income pie increase in 2003, but the shares of the other 80 per cent shrank or held steady, says the Vanier Institute for the Family (VIF).
Many of the families in the 80 per cent category "have already fallen off the edge," with the biggest losers being the poorest 40 per cent of families, the VIF said in its annual report released Feb. 17.
"A growing number of households are now 'living on the edge' brought about by the triple reality of shrinking real hourly wages, the continued growth in household spending and rising debt loads," said the institute. "In the process, we may have created 'workaholic' families."
Over the five years that the institute has been preparing the annual reports, the "edge" has gotten closer every year, says the report.
The pressure points for families are clear, it adds: Hourly earnings are shrinking, a record number of people are now employed, the personal savings rate has now fallen to an all-time low, debt has now risen to an all-time high and bankruptcies remain at near-record highs, it said.
For far too many, the "edge" is getting closer and closer, said the institute. "A growing number will fall into the precipice when, and not if, interest rates begin to rise from their 40-year lows."
The national, charitable organization was established in 1965 under the patronage of Gov. Gen. Georges Vanier and Madame Pauline Vanier to promote the well being of Canadian families, says "households need to reign-in some of their spending, pay off some debt and build a bigger cushion against slow times. The time to act is now."
The International Year of the Family was celebrated 10 years ago and the Vanier institute says family incomes have grown and now "recovered fully" from the recession of the early 1990s.
"Poverty rates have decreased," it said. "Even so, many families struggle to just get by, while many others, who may have enough to satisfy their current needs, are anxious about what tomorrow may bring."
The report also said that for some time now, Canadians as consumers have been counted on to sustain the overall performance of the Canadian economy.
"This may no longer be possible," it said. Many Canadians are "spent-out" and are already over-extended, said the VIF report.
"Can we step back from the edge of the precipice of 'over-spending' and still look forward to economic growth? That is the question that faces us all."
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