Oil wealth must benefit all

Lana
Lana Payne
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Newfoundland and Labrador is the talk of the country.
We are close to shedding our so-called have-not status and being dumped from equalization, all because the price of oil continues to climb - reaching over US$133 a barrel last week with no end in sight to its hemispheric rise.
Reports from Statistics Canada and others paint a very rosy economic turnaround for the country's most easterly province.
Newfoundland and Labrador led the country last year in terms of gross domestic product (GDP) growth, surpassing even Alberta.
GDP is one of those measures loved by economists and is used to estimate the health of the economy.
And it does, to a certain extent. What it does not necessarily measure is the well-being of citizens living in that economy. The GDP is a combination of factors that include what we consume or buy as citizens of the province, what businesses invest, what government spends and what we export.
For example, on GDP alone, it looks like we have little to complain about. According to an article in the May issue of the Statistics Canada publication the Canadian Economic Observer, less than a decade ago, our province's GDP per capita was $10,000 less than the national average.
In 2007, it was more than $10,000 above the national average - marking the largest turnaround in one decade in Canadian history.
Wow!
And it's all because of oil. Market speculation and an insatiable global appetite for the black gold have more than quadrupled the price per barrel since 2002.

Petroleum driven
It is the value of the oil being exported that is the biggest driving factor behind our GDP numbers.
The value of the province's international exports has ballooned from just $2 billion in the early 1990s to $12 billion last year, according to the Stats Can report.
Almost 70 per cent of the value of these exports is from crude oil and refined petroleum, and doesn't include another $8 billion in exports to other provinces in Canada.
From all accounts, the province is sitting pretty.
But what about well-being? What about income? What about the cost to buy a home these days, fill up the car or buy a week's groceries? Oil is driving the cost of these things, too.
As far as incomes go, we have a lot of catching up to do. GDP per capita is one thing, average wages and incomes is another, and on those accounts we are nowhere near to leading the country.
Since 2004, wages and incomes have started to climb in our province. But we have a serious problem.
Another Statistics Canada report on earnings found that Newfoundland and Labrador has not reduced the incidence of low-paid employment in a decade.
So, while we have had the biggest turnaround with respect to GDP between 1997 and 2007, this has not translated into lifting the lowest paid. In 1997, one-third of all jobs in the province paid under $10 an hour. That hadn't changed by 2007 despite all the wealth being generated.
Conversely, more people are earning $25 an hour or more today than 10 years ago - 16.9 per cent of the workforce compared to 9.6 per cent in 1997.
While those at the top are doing better, those at the bottom of the wage scale are stuck. Yet their cost of living is anything but stuck.
This is one of the reasons the government must act - and act quickly - to increase the minimum wage to at least $10 an hour. There is something wrong when our healthy economy is not delivering for one-third of the people who work.
It is also why programs, services and public policy that contribute to a citizen's well-being are so important to how we share the oil wealth. It's about making sure "the social wage" grows as the economy grows. Many things can contribute to that social wage, including affordable, high-quality child care; access to health care that is getting more expensive to obtain, depending on where one lives; increasing the availability of affordable housing; and implementing a universal meal program in our schools.
To its credit, the provincial government has made a number of important steps towards improving the social wage - from free textbooks to its low-income drug plan.

Improving incomes
But as oil drives the cost of essentials through the roof, while pumping the province's coffers to overflowing, we have to do whatever can be done to improve the earned and social incomes of Newfoundlanders and Labradorians.
Otherwise, the disparity will deepen between those who have never had it so good and those who are struggling like never before to keep the wolf from the door.
When families can no longer take a Sunday drive to see the icebergs because filling up the tank means not having enough to fill the cupboard, when seniors are turning off the heat in the coldest months and when kids are kept home during school outings because their parents couldn't afford another $5 fee, we should all be asking ourselves if having one of the highest GDPs in the country is enough if we haven't improved the well-being of all people.

Lana Payne is a former journalist who is active in the labour movement. She can be reached by e-mail at lanapayne@nl.rogers.com.Her column returns June 8.

Organizations: Statistics Canada

Geographic location: Newfoundland and Labrador, Alberta, Canada

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