There’s been much discussion over the past decades about income inequality and how much it matters. Canada, as the story goes, has a fairly stable distribution of wealth, meaning the distance between the top and bottom income earners is not significantly widening. Contrast this with the U.S., where income inequality has been rising for decades as the rich capture ever greater shares of wealth compared to the poor and middle class. According to Goldman Sachs, the richest one percent of Americans now accounts for over half the value of equities owned by U.S. households, and the top one percent owns 50 per cent of total wealth.
It’s tempting for Canadians to feel smug about this, but should we?
In fact, inequality in the Greater Victoria region — where the cost of living is rising faster than real incomes — is trending in the wrong direction. As we showed in our annual Prosperity Index this past May, our region has higher income inequality than its peer cities.
Will the pandemic make existing inequality worse?
The International Monetary Fund (IMF) put out some alarming research in May quantifying how pandemics like SARS (2003), H1N1 (2009), MERS (2012), Ebola (2014) and Zika (2016) have left communities more unequal. This is because low-income earners and those with the lowest education levels tend to be hardest hit, something we have seen during this current pandemic.
IMF research shows pandemics leave a persistent and significant increase in inequality. People with advanced educations are barely impacted, but those with basic levels of education see major declines. This appears to be happening here in Canada.
An unequal impact across sectors, people and geographies
A September report from African-Canadian Civic Engagement Council (ACCEC) and INNOVATIVE Research Group found Black Canadians are more likely than non-Black Canadians to report symptoms and nearly three times as likely to report knowing someone who has died of the virus. They are also more likely (56 percent compared to 43 percent) than non-Black Canadians to report layoffs or reduced working hours and other negative financial impacts due to COVID-19.
Let’s also look at women and what experts call the “she-cession.” This past spring, women’s participation rate in the Canadian workforce reached the worst in three decades. Women are disproportionately affected because they tend to work in industries — hospitality and food services, retail, educational services and social assistance — most affected by lockdowns, wage losses and layoffs.
Women are also disproportionately impacted because they shoulder more childcare responsibilities than men. In a recent “Women in the Workplace” report, Lean In and McKinsey & Company found an alarming one in four women are thinking about downshifting their careers or leaving the workforce due to the impact of COVID-19.
We know from past recessions that when the economy rebounds and jobs are “replaced,” they’re actually not all the same jobs that existed as before. During the pandemic, companies around the world have accelerated their shift to automation and all of this needs new skills.
This is where micro-credentials come in.
Micro-credentials are non-degree certifications that verify an individual’s competence in a particular skill or group of skills, from digital project management to workplace communication. These certifications can be completed in months, not years, which makes this kind of upskilling ideal for addressing the rapidly changing needs of the workforce and the demand for new skills.
Putting more focus on micro-credentialing and upskilling is a key recommendation in the Rising Economy Taskforce’s report: Reboot: Greater Victoria’s Recovery Plan. To further these recovery recommendations, South Island Prosperity Partnership recently worked with the University of Victoria and Royal Roads University to launch Microstart, an online portal to the micro-credential courses now open for free registration to qualifying B.C. individuals and businesses.
While long-term solutions are important on our road to recovery, so are timely solutions like micro-credentials that rapidly build skills in our people across sectors, from health care to tech. On the road to creating greater economic equality in our region, which is essential to our recovery and lasting resilience, micro-credentials are a smart solution whose time has come.
Emilie de Rosenroll is CEO of the South Island Prosperity Partnership, the economic development organization for the South Island region.
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