Who takes advantage of the system?

In light of the Canadian income gap, it’s not the working poor

Folks, make sure you’re sitting down for this news, because it’s quite the doozy. On January 4, while mindlessly scrolling through Facebook, I was ambushed by the headline of a Narcity article: “Canada’s Top CEOs Will Earn an Average Worker’s Yearly Salary Before Noon Today.” It was published shortly after noon on the fourth, mere hours after the “yearly salary earnings” actually took place.

The piece cites the report “CEO compensation in Canada,” by David Macdonald at the Canadian Centre for Policy Alternatives. It was written using data “from the mandatory disclosure of pay for the Named Executive Officers (NEO) of public Canadian companies, (which are) generally the five highest paid people in a company […] The list does not include chief operating or chief financial officers, of which there are several that would otherwise make the list.”

Essentially, it’s a top-100 list of Canada’s highest-paid CEOs. The average wage of people on that list was $10,800,000 in 2019 (2020 averages have yet to be reported). For a fun little comparison exercise, the Canadian average individual income in that same year was $53,482, which the average top-100 CEO made by 11:17am on the fourth.

Let’s do a little more math to make sure you really understand the income gap here. One top-100 CEO’s 10.8 million dollar salary could pay for just over 200 average individuals’ salaries. But this isn’t a list of one, it’s a list of one hundred who collectively earned roughly $1,080,000,000 in 2019. One hundred people in Canada earned enough money in 2019 to pay the average wage of over 20,000 people. To help you visualize that amount of people, that’s the population of Swift Current plus about half of Yorkton.

That truly and deeply pisses me off, and I have a handful of reasons for feeling that way. To start, I want to talk about the fact that one of the reasons money has value is that there’s only so much of it to go around. Countries can’t just make more bills and coins whenever they want to because the more of it there is, the less it’s actually worth. That’s pretty common knowledge – it makes sense that money is worth something because it’s difficult to get.

Being that there’s only so much to go around, one individual taking that much as their share directly deprives many more people of that resource. A handful of people deciding they deserve the compensation of 200 people in a single year means that that money is not around to go to the people who it’d actually make a difference for.

I say “make a difference” because for the people who have multi-million dollar annual salaries, the $50K made by an average Canadian would have virtually no impact on their year since $50,000 is half of a per cent of their average annual salary. For comparison, that same percentage of the average Canadian’s annual salary would be roughly $270. The income gap from your average Canadian to the top-100 CEO is large enough that the average Canadian’s annual salary would seem like nothing to the CEO. Because to them it really is nothing, seeing as they can receive that much income from half a week’s work.

The Organization for Economic Co-Operation and Development defines middle-class as those earning between 75 per cent and 200 per cent of a median household income, which according to Statistics Canada in 2019 was within the span of $45,000-$120,000. What’s most disturbing to me here is that the gap between middle-class and extreme wealth is to the degree that our average is half a per cent of the income of the most wealthy, but the gap between the average income and the poverty line is terrifyingly small in comparison.

I remember back when I hit middle school and began to be included in some of the more “adult” conversations; I witnessed the generation that raised myself and my peers get wound up to near-aggression, talking about “all those poor people taking advantage of the system and driving up what us hard working folk pay in taxes so they can sit around.” The idea that those in poverty could “take advantage of the system” has been around as long as poverty has, and it is one of the most disgusting uses of victim-blaming mentality that I’ve seen. The narrative that demonizes those under the poverty line for something out of their control ignores factors like institutionalized racism, generational trauma, physical and mental disabilities, and systemic issues that have been in place for centuries.

That narrative tells individuals with a low income that if they just worked harder they’d be able to pull themselves out of that situation, that anyone can become wealthy if they put in the effort, but how true is that when there’s only so much income to go around and the average Canadian income is half of a per cent of what the wealthy earn? How true is that when the people at the top can earn the income of over 200 people in just one year, which would expand to the income of a thousand over five years when an average individual would have only made the income of one?

I understand that without these CEOs to run the companies there would be far less work for average Canadians, but it is just as true that without the average Canadian these CEOs would have no employees, business, or income because no one would be doing the lower-level work for them. In this system each is essential for the other, and should be treated as such.

Here’s one last fact for you. In Macdonald’s report, he states that rather than taking a personal pay cut or going without their bonuses, over 1/3 of the CEOs on the top-100 list applied for and received government assistance during the pandemic last year to pay for their employees wages. Tell me again, who’s taking advantage of the system?