Family incomes in Canada have shrunk by 5.6% since 1989, according to a new study recently released by the Vanier Institute for the Family.

The study found that, after taking inflation into account, average after-tax family incomes fell to $45,600 in 1997, down from $48,300 in 1989, and continued to fall through 1998 and into 1999.

This drop in real family income occurred at a time when the economy as a whole was supposedly enjoying a robust recovery from the recession of the early 1990s, the study noted.

It found that income taxes were not the main cause of the drop in real income. Income taxes actually fell by a few dollars through the 1990s, but did increase somewhat as a percentage of family income because families were earning less.

"People are frustrated because at the end of the month they can’t make ends meet," said Bob Glossop, director of programs for the Vanier Institute. "But they’re blaming taxes when in fact it’s the jobs they’ve got that are not paying the wages they need."

The study also found that family debt has reached record highs while savings have fallen to record lows. Household debt soared to 114% of after-tax income in 1998, up from 92% in 1989. The savings rate dipped to 1.5% of after-tax income, compared to more than 10% in the early 1990s.

Other factors influencing the drop in real family income were a shift from permanent and well-paid jobs to lower-paying non-standard jobs, and a decline of 10% in government transfers to families, mainly cuts in UI eligibility and payments.