Hourly earnings rise, but family incomes don’t keep up with debt, according to a report released today by the Vanier Institute of the Family.

The report, called Current State of Family Finances – 2007 examines trends in incomes, spending, savings, debt and net worth across family and household types.

A record 32% of workers aged 55 continue to work, said the Institute. Hourly wage gains have now outpaced price increases for the second year in a row, which the report says is spurred by geographic labour shortages.

Despite rising household incomes, debt has risen seven times faster since 1990. Average total debt is at $80,000 per household, equal to a record 131% of household incomes, according to the report.

The report also notes that strength in the real estate market pushed real net worth up by 18% since 2000.

This year’s report also includes a look at what the poorest fifth of households do without. According to the Institute, about 200,000 more Canadians are poor this year than in 1990, up to 3.4 million.

These cash-strapped families skip on food, are less likely to own a car and the majority have given up the dream of home ownership. They also have to scrimp on things such as recreation, kids camps, dental insurance, current technologies, travel, jewelry and live sporting events.

“Even though the roughly 800,000 children under 18 living in poverty is an improvement from previous years, this is still over one in ten children,” said Clarence Lochhead, executive director of the Vanier Institute. “When it comes to the lives of our children, we need to think well beyond the latest indicators of economic performance. Our future prosperity depends on the investments we make today to develop the potential of all of our children … and their parents.”