Shrinking Middle Class Makes Toronto a City of Socioeconomic Extremes

Toronto is becoming a city of stark economic extremes as its middle class is hollowed out and replaced by a bipolar city of the rich and poor–one whose lines are drawn neighbourhood by neighbourhood.

New numbers indicate a 35-year trend toward economic polarization is growing more pronounced: The country’s economic engine, which has long claimed to be one of the most diverse cities in the world, is increasingly comprised of downtown-centred high-income residents–most living near subway lines–and a concentration of low-income families in less dense, service- and transit-starved inner suburbs.

Three years ago, University of Toronto professor David Hulchanski published a paper on Toronto’s “Three Cities,” illustrating a growing socioeconomic disparity among the city’s census tracts. But the three-way divide Prof. Hulchanski and his fellow Cities Centre researchers described is swiftly being reduced to two, according to a new paper they will release Wednesday. Toronto, a predominantly middle-class metropolis just three decades ago, is increasingly dominated by two opposite populations–one with an average income of $88,400, and another of $26,900.

These two groups live in different neighbourhoods, work in different sectors, send their children to different schools and have divergent and unequal access to city services and public transit. Even the 905-area suburbs outside of Toronto are seeing a dramatic drop in the proportion of middle-income earners in their population, the report finds.

Those in the lowest-income areas are also more likely to be immigrants and visible minorities.

“It’s only going to become worse,” Prof. Hulchanski said. If the trend continues, the paper suggests, Toronto in 2025 will have a concentration of high-earners along the lakefront and the city’s subway lines surrounded by low-income areas–with almost nothing in between.

That continuing trend risks creating pockets of the city that become “no-go zones,” said Carol Wilding, president of the Toronto Board of Trade. She added the information isn’t surprising, but it “starts to put more of a crisis tone” on the need for the city to fix a growing problem that’s as economic as it is social.

“It does make it more challenging for businesses to want to get in there to invest in those neighbourhoods,” she said. “It’s a greater call to action. . . . We aren’t moving fast enough.”

It also seems to contradict Toronto’s most prized mottos–“Diversity our strength” and “The city that works.” Neither of those rings true any more: Toronto’s diversity is becoming balkanized, turning it into a weakness where it could otherwise act to the city’s advantage. The creation of economically polarized pockets of high- and low-income residents means Toronto simply won’t “work” as a municipal entity.

“We used to brag about it,” Prof. Hulchanski said. “‘Toronto’s an efficient city–it works.’ We know now that’s not true.

“To have so much poverty in one geography and for it to be so deep and for the social distance to be so large . .&nsbp;. that isn’t healthy.”

In a five-year period alone, average incomes declined in 34 of the city’s census tracts (about 7 per cent of its total)–23 of those areas became predominantly low-income. At the same time, 12 areas became high-income and nine earned “middle-income” status.

“That change has been quite dramatic,” Prof. Hulchanski said, although it’s difficult to tell precisely how out of the ordinary it is because such geography-specific research into socioeconomic disparities is new to Canada. But it’s becoming far less rare. The most populous cities in the country are finding themselves economically divided by neighbourhood, and are struggling to figure out why.

In Toronto, the idea of neighbourhood-specific poverty came to the fore several years ago. Among city-sponsored and independent community initiatives, it spawned a “priority neighbourhoods” program, in which the city targeted several particularly troubled areas.

Despite the flood of money and services, however, things aren’t improving on a broader scale.

Israt Ahmed sees that reality every day. The Scarborough-based community planner sees families, seniors and new immigrants struggling to cope in her Kingston-Lawrence neighbourhood. And she knows firsthand the effect a lack of transit has on economic prospects. She used to commute more than two hours each way to get to her job in Etobicoke–but at least it was full-time.

“Most of the jobs here are part-time, contract. They aren’t adequate jobs for people. No wonder accumulation of wealth is happening somewhere else.”

Data in the report paint a stark picture even before the recession, which hit some Torontonians far harder than others and whose sluggish recovery is skipping large swaths of the population.

“If anything,” said TD Bank economist Derek Burleton, “these challenges have gotten worse.”

Mayor Rob Ford won big in Toronto’s suburbs in the October election, after his campaign derided his predecessor’s policies on rejuvenating Toronto’s high-rise apartment towers and using the city’s zoning clout to encourage mixed neighbourhoods. Mr. Ford’s office referred questions Tuesday to the mayor’s appointee to chair city council’s planning and growth management committee, Councillor Peter Milczyn.

Mr. Milczyn said he’d like to see the city advocate inclusionary zoning “as one of several options,” which would include an emphasis on affordable private housing and incentives for investment that create local employment.

In the years after Beatriz Sousa moved to Canada from Portugal in 1980 to raise her family, she and her husband saved enough money to afford a house. But when heart problems cost him his housekeeping job five years ago, they were forced to sell–living first with their daughter and then in an apartment near Kipling Avenue and Albion Road in north Etobicoke, deep into Prof. Hulchanski’s “third city” territory. She’d still like to move elsewhere, at least to a building that won’t make her husband dizzy.

But a year after getting laid off from her own job, Ms. Sousa’s employment insurance expired last month. Their earnings from Mr. Sousa’s disability payments are “never enough,” she said, but “what are you going to do? It’s better than nothing.”

A tale of three cities

City One

High-income earners–20 per cent to 40 per cent above the median income for the city.

Percentage of city in 1970: 8

Percentage of city in 2005: 4

Very high-income earners–more than 40 per cent above the median income for the city.

Percentage of city in 1970: 7

Percentage of city in 2005: 15

The city’s high earners have a much more prominent place now than they did in the 1970s. And they’re most prominent in Toronto’s downtown core and along its transit arteries.

According to the report, 82 per cent of City One’s population is white; 61 per cent of them have a university education. This population also shows the highest increase in average individual income: Income increased by 99 per cent over 35 years, and by 29 per cent from 2000 to 2005.

City Two

Middle-income earners–individuals earning within 20 per cent above and 20 per cent below the median income for the city.

Percentage of city in 1970: 66

Percentage of city in 2005: 29

Back in the 1970s, Toronto was predominantly a City Two kind of town: Middle-of-the-road earners dominated–especially in the suburbs, many of which were built for a car-driving, house-owning middle class.

Not so much now.

City Three

Low-income earners–20 per cent to 40 per cent below the median income for the city.

Percentage of city in 1970: 18

Percentage of city in 2005: 40

Very low-income earners–more than 40 per cent below the median income for the city.

Percentage of city in 1970: 1

Percentage of city in 2005: 14

This third city has seen the highest population growth of the three categories since the 1970s, despite being less dense, on average, than the others. Its population has more youth and children, and a higher percentage of single-parent households–23 per cent versus 14 per cent in City One. One in five adults doesn’t have a school certificate, diploma or degree.

It also has a far greater number of immigrants and visible minorities: City Three’s immigrant population almost doubled in 35 years–from 31 per cent to 61 per cent. And City Three’s visible minorities are the majority–66 per cent of the population. Fifty-four per cent of the city’s homicides from 2005 to July, 2009, took place in these neighbourhoods.

The report notes that residents of these neighbourhoods have to travel farther to find employment but have the poorest access to transit. Only 19 of the system’s 68 subway stations are within or near City Three neighbourhoods.