The amalgamation of Etobicoke, York, Toronto, East York, Scarborough and North York into one City of Toronto in 1998 was supposed to unify some 2.5 million people into one urban force.

The social indicators, reconfirmed in this year’s Vital Signs report, show a region drifting apart, moving toward a city divided.

An increasing number of Toronto citizens are cashing in on huge compensation packages even as the equivalent population of some Ontario towns languish on social assistance or exist in low-paying and temporary jobs that don’t provide enough cash to sustain families.

Facing the most serious jobs challenges are newcomers, people in Canada five years or less. The unemployment rate for this group was 19 per cent last year, double the overall rate of the city.

With manufacturing jobs disappearing and unionized jobs declining, the entry-level jobs are dead-end opportunities that contribute to the economic polarization.

Statistics in this year’s Vital Signs report show average incomes have grown in Canada by 17 per cent since the 1970s.

But one-third of the income growth between 1998 and 2007, a period of economic prosperity, went to 1 per cent of the wealthiest Canadians, those averaging more than $400,000 a year.

The divided city is not a result of amalgamation.

But some urbanists had hoped the realignment would have helped forestall the decline of the vulnerable inner suburbs.

By pooling the resources of the entire city, the theory goes, Toronto would be able to protect disadvantaged neighbourhoods from precipitous decline.

The designation of priority neighbourhoods and the creation of a city fund to funnel money and resources into services in these communities has helped to improve living conditions and engender hope.

But recent political changes at city hall, with a focus on smaller government, cuts in services, privatizing of unionized jobs, cuts in community grants and a general running down of the public service, poses a clear and present threat.

What was supposed to be part of the solution has been co-opted into being part of the problem.

Rahul Bhardwaj, president and CEO of the Toronto Community Foundation, which conducts the annual checkup, reviews the stats and trends. He questions one over-arching economic assumption that all citizens benefit from growth in the economy.

Does a rising tide lift all boats?

In 1970, two-thirds of the city’s census tracts had residents with middle incomes.

By 2005, only four in 10 did.

And projections done by David Hulchanski at University of Toronto predict that by 2025 only 9 per cent will.

Meanwhile, the very low income census tracts have proliferated to now cover four in 10 neighbourhoods, and will account for 59 per cent by 2025.

A close look at income distribution raises further alarms about the emergence of a divided city.

In 1970, the residents of the high-income neighbourhoods earned, on average, three times what residents in the low-income neighbourhoods earned.

By 2005, they were earning five times as much.

Their take of the earnings pie was increasing.

And a growing number of census tracts recorded higher earnings — all good news.

Except that the number of low-income neighbourhoods were also increasing, and more sharply.

The middle class is being squeezed out.

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It’s a classic case of the disappearance of the middle and the emergence of two extremes, the kind of polarity that has led to social unrest and dysfunction in other urban regions around the world.

We are now headed toward a “70-30 split between poor and rich in neighoburhoods by 2025,” Bhardwaj says.

In a time of unprecedented growth, it’s clear we did not share equally in that growth.

More importantly, the city has become more polarized, with more than 1 million people living in the low-income neighbourhoods.

And the poor neighbourhoods are predominantly occupied by people of colour and newcomers, many unable to find jobs to match their qualifications.

“It’s true that we have income disparity, but unless we bridge the opportunity disparity, we are unlikely to bridge the income disparity.

“We have to connect the inner suburbs (to the core) emotionally and physically,” Bhardwaj says.

The newcomers who, largely, will be populating these areas of declining income (relative to the average) need affordable housing, transit, social connections, and the pathways to connect with jobs and opportunities.

And just when they need it most, our civic institutions and governments are looking to withdraw from the field.

Suggestions that governments need to take steps to help newcomers integrate and get jobs are well founded, Bhardwaj says, because all other efforts have failed.

Advocates first used arguments of social justice to advance the arguments for newcomers. But those fell on deaf ears. Next, they argued that Canada needs to replenish its labour force, but the demographic arguments failed. Then, they presented the business case for social inclusion, but that has not moved enough employees.

All that’s left is the argument that, as a government, we will help you train or retrain these newcomers to land jobs they clearly can do, he said.

While that debate spices a provincial election, figures from the Vital Signs report show “newcomers have doubled the unemployment rates of those born in Canada and the ones who are hired earn half the annual salary.”

If this divide is so prevalent “through times of great prosperity, what happens in times where we are not as prosperous?” asks Bhardwaj.

“There are unpleasant consequences for a city. It creates a burning platform.

“Just look around the world!”