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Camilla Gibb is the author of four novels, including Sweetness in the Belly and The Beauty of Humanity Movement.

When author Richard Flanagan finished his latest novel, relative poverty forced him to contemplate getting a job in the mines in northern Australia. His Booker Prize win has spared him a life underground for the time being, but he did not waste the opportunity to acknowledge in his speech that "writing is a hard life for so many writers."

And it's only getting worse, as Elizabeth Renzetti wrote wrote recently in these pages. Twelve thousand dollars – that's the figure the Writers' Union of Canada estimates as the average annual income writers make from their writing in this country. I remember what it's like to live on $12,000. You live in a shabby apartment furnished with hand-me-downs from your parents and garbage-picked gems, you allot $25 a week for food and you wear a borrowed dress when you're invited to a gala fundraising dinner for writers at a fancy hotel. You take the subway there. If you are in your late 20s, as I was then, it's fine, you make do because you are doing what you love and most people don't have that extraordinary privilege.

You don't squander that privilege. You work your ass off. And hopefully you're rewarded for that effort. It worked for me, as it did for many writers of my generation, perhaps the last for whom it was possible to live off their writing. In Britain, writers' incomes have fallen by 30 per cent in the past eight years, collapsing to what one Guardian headline called "abject" levels.

So many writers I know are looking back at this point in mid-life and saying, "I had a good run." A good run saw us earn increasingly bigger if still modest advances. (Yes, $75,000 sounds like a lot, but when it takes five years to complete a book and your agent is taking a cut of 15 per cent, you're still below the poverty line if this is your sole source of income.) Publishers were once able to invest in a career, with income from bestsellers offsetting the less sensational works in a catalogue. Now, every book has to be a winner. If you fail to earn out your advance through sales, your next advance will be lower, or perhaps, as has become increasingly the case among my mid-career contemporaries, you will lose your publishing home.

Writing seems to have become one of the few careers where the more experienced and proficient you become over the years, the less you are compensated. And the humiliations of this are great. It does become difficult to uphold belief in the worth of your work. And since this is work intrinsically tied to one's sense of self, it becomes difficult to uphold a sense of self-worth. It takes ego and adrenalin to work in solitude, through years of confusion and uncertainty, in the writing of a book. If you don't believe in it, no one else will. Of course, there is reward in art for art's sake, but few can sustain morale, motivation or mortgage on an income of private aesthetic fulfilment.

So we teach. We teach in creative writing programs and are grateful for those jobs and we have less and less time to be writers. And we are guiding and mentoring a new generation of aspiring writers who will find even less of a market for their work. You do your best, in teaching, to focus on craft rather than business, but sometimes you feel you are trying to keep a giant elephant stuffed in a closet, out of view.

Then a first-time author gets some whacking big advance and there is a quiet loathing amongst mid-career writers and an invigoration of ambition and hope among the aspiring. It is a complete distortion of the economic picture. As is the awarding of prizes. The Scotiabank Giller Prize is now a whopping $100,000, four times the amount awarded when the prize was first established in 1994. The Hilary Weston Writers' Trust Prize for Nonfiction has been increased to $60,000. Other less glamorous, largely government-funded prizes have felt an obvious need to sex up their images by adding more money to the pot.

The frenzy of prize season leaves a reading public with the sense that all is well in the world of letters, when it fact, all might be well for a few writers for a couple of years. We all know, too, that the winner may have been any one on the short list – these things are a lottery, subjectively determined, rarely unanimous and not immune to political influence. Most prizes have gone some way toward addressing these disparities by taking care of their shortlisted authors – the Scotiabank Giller Prize leads the way here, awarding them $10,000 each. That money matters. It matters in the life of an emerging author or someone published by a small press; it matters for literary writers in a world where bestseller lists are dominated by genre fiction.

Prizes could play more of a role in investing in the future, by spreading the wealth even further and buying time for more writers to write. That said, it's not the job of literary prizes to keep an industry afloat. It's hard to pin that responsibility on any one entity when we are confronting a profound shift in consumer attitudes toward cultural products and the attribution of worth and wealth.

There has never been a comfortable fit between art and commerce; they are antithetical pursuits, in many ways. Publishers used to be in a position to navigate this awkward relationship creatively, but now, strangled by market giants like Amazon, they are left with fewer and fewer options. Given these constraints, the mid-list will soon be extinguished – the bulk of literature, and its authors, with it.

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