With few exceptions, incomes in coastal B.C. are lower than the provincial average, while the percentage of low-income residents and unemployment is higher. These indicators suggest large parts of coastal B.C. may be struggling economically, leading to possible negative effects on health and wellbeing.
Authors: Raissa Philibert and Karin Bodtker, Coastal Ocean Research Institute, an Ocean Wise initiative
Reviewer:Kevin Milligan, Professor of Economics, University of British Columbia
Photo Credit: Ocean Wise
Among the coastal regions of B.C., the highest income census divisions, as measured by median household income (Figure 1 under Current Status section) are Greater Vancouver and Kitimat-Stikine. These two areas have median household incomes that are as high or higher than the B.C. average. All other coastal areas have median household incomes that are below the provincial average. Furthermore, most coastal divisions have a higher prevalence of low-income households, lower rates of participation in the labour force, and higher unemployment rates than the B.C. average for each of these indicators.
Why is it important?
Assessing the health of coastal communities and regions involves many factors, but economic wellbeing in terms of livelihoods certainly plays a role. Economic wellbeing means having enough resources to face life’s challenges. Obvious factors include income and employment (see also our discussion of income disparity in the Wellbeing theme). The relationship between happiness and income and unemployment has been the subject of many studies. Given their importance, these factors have been included in several indices of wellbeing such as the Canadian Index of Wellbeing or the OECD Better Life index, alongside other equally important indicators. It is important to remember that economics are just part of the overall picture.
At an individual level, people with higher incomes report higher levels of life satisfaction. A sufficient income allows for a family or household to meet their basic needs such as food, shelter and clothing. Higher income also helps to provide better access to education, extended health care as well as leisure activities. On the other hand, lower incomes may lead to a number of obstacles to wellbeing including social exclusion and marginalization.
The links between employment and wellbeing seem clear cut. In Canadian as well as European studies, people who are employed report being happier than unemployed people, even if they are receiving the same income through other sources. Employment often provides a sense of purpose as well as a source of income. Similarly, high rates of unemployment are associated with a number of negative impacts in addition to a loss of income. For example, a Canada-wide study has found that communities with higher unemployment rates have poorer health and higher mortality rates. Unemployment has repercussions for the economy and society as a whole, even for those who are employed. In general, the unemployed in these studies and as defined by Statistics Canada are those who are actively looking for work. Those who are not working by choice are categorized by Statistics Canada as “not in the labour force” rather than unemployed.
What is the current status?
The median after-tax household income, representative of the resources available to a household, is less than the provincial average in all coastal census divisions, except two (Figure 1).
The median after-tax household income in B.C overall increased by one percent per year between 2005 and 2015. Even in coastal areas with low employment, there has been no decrease in median household income between 2005 and 2015.
The prevalence of low-income status, based on a Statistics Canada indicator, is higher than the provincial rate in most coastal regions (Figure 2). In 2015, if the income available per individual in a household was less than $22,133, all members of that household had a “low-income” status. About five million Canadians or 14.2 percent of the population lived on a low income in 2015. B.C. had the fourth highest prevalence of low-income households among Canadian provinces, with 15.5 percent of its population considered low income. Coastal areas with a high prevalence of low income also reported a low median income (Figures 1 and 2). In the Central Coast, which had the lowest median after-tax household income in 2015, 23 percent of the population lived in low-income households. The unemployment rate (the unemployed portion of the labour force, or those who are actively seeking work) in B.C. (6.5 percent) was lower than that of Canada (7 percent) and was the lowest among the provinces. However, even with significant differences in unemployment rates among B.C. coastal areas, all but two census divisions recorded higher unemployment than the B.C. average (Figure 3).
The mismatch in Kitimat-Stikine, where high median household income ($62,936) was reported despite a high rate of unemployment (13.8 percent), could be due to income being based on 2015 data, whereas unemployment was specific to the week of Sunday, May 1 to Saturday, May 7, 2016. Significant job losses occurred in oil-dependent regions such as northern B.C. in 2015 and 2016 as oil prices declined in 2015. Unemployed people who may have lost their jobs before the census reference week would still report a high income for the previous year and would be considered part of the labour force, explaining the high participation rate of 64.4% in Kitimat-Stikine (Figure 4). Similar patterns were seen in other parts of Canada that are dependent on an oil economy.
What can you do?
Individual and Organization Actions:
- Be aware of unemployment and income inequality issues in your community and support government policy and action to address change and imbalance.
Government Actions and Policy:
- Provide a universal basic income as part of social assistance to reduce income inequality.
- Further extend health and social benefits to low and modest income Canadians, to reduce the impacts of low income.
- Improve the general skills level across all geographies through broader access to high-quality education and training programs.
- Remove obstacles to women’s participation in the labour force.