New fact sheet says Alberta could save billions by addressing growing inequality

A new fact sheet released this morning by the Parkland Institute says that Alberta should introduce progressive taxes and improve public services in the provincial budget in order to improve health outcomes and significantly reduce costs.

The fact sheet, written by Parkland Institute research director Shannon Stunden Bower, is titled Sick of Inequality: The case for action by the Alberta government on the social determinants of health. Stunden Bower highlights that inequality in Alberta is currently the highest in the nation. In 1982, the top 1% of income earners made ten times what the bottom 10% did. By 2011, the spread had grown to 18 times. At the same time, the earnings of the middle class have been severely squeezed.

“Research from around the world shows that income distribution is one of the prime determinants of health,” says Stunden Bower. “The greater the income inequality in a given jurisdiction, the poorer the health of residents in that jurisdiction.”

There is an ethical imperative to improve population health. There is also an economic one. Bumping up the health of the lowest quintile of Alberta income-earners to the level of the next lowest quintile could save $1.2 billion in health care spending. Improving the health of all Albertans could reduce annual health care expenditures by up to $5.7 billion.

Stunden Bower points out that the formula is pretty straightforward, “the more you reduce extreme inequality, the more you improve population health, and the more you improve population health, the more you save in your health care system.”

The fact sheet ends by laying out what the Alberta government should include in Budget 2014 to begin addressing the province’s extreme inequality: a fair and progressive personal income tax system, higher resource royalties and corporate taxes, and well-funded and effective public services.

Stunden Bower concludes that, “the government’s current policy of low taxes, low royalties, and under-funded public services is worsening inequality and costing the province more. Budget 2014 provides an opportunity to change course, towards a more equal and healthy society.”

The Parkland Institute is a non-partisan public policy research institute in the Faculty of Arts at the University of Alberta.  The publication Sick of Inequality is available for download on the institute’s website at http://parklandinstitute.ca.