The Income Inequality Issue in Canada

by Errol Black

A June 30 op-ed piece in the Winnipeg Free Press by Jason Clemens (MacDonald-Cartier Institute) titled, “Over simplifying income inequality,” dismisses concerns raised about the growing inequality of incomes in Canada. He proposes that “the over-simplification of inequality by the left” has “potentially damaging consequences”.

His argument is based on the proposition that “Inequality is not at all simple, but is rather terribly complicated.” But turning the inequality issue into something “rather terribly complicated” allows the Right to maintain the status quo rather than implement policy changes that will reverse the growing inequality between the rich and everyone else in Canada. As hard as Clemens tries, the position is indefensible.

The Canadian Centre for Policy Alternatives has been documenting the growing gaps between rich and poor and CEOs and average workers since 2006. More recently, other organizations like the Conference Board of Canada and the OECD (which are hardly considered left leaning) have confirmed these trends.

The OECD report (May 2011) noted, amongst other things, that: (i) The average income of the top 10 per cent of $103,500 in 2008 was ten times more than the average at the bottom of $10,260. In the early 1990s this ratio was 8-1; and (ii) At the same time, the richest one per cent of Canadians saw their share of total income go from 8.1 in 1980 to 13.3 in 2007.

A similar story has been told in media reports and casual observations of everyday life in Canadian cities. On the one hand we get regular reports on the increasing incomes, bonuses, etc. of corporate CEOs and their minions. On the other hand, we also get regular reports on the growing numbers of Canadians dependent on food bank, the growth in homelessness, and the ongoing increase in gangs and gang violence over control of the lucrative drug trade. Perceptive citizens no doubt wonder if there is a link between the growing riches of bank CEOs and the number using food banks.

The OECD report suggested that this massive shift in incomes from the bottom to the top was a result of changes in government policies that favoured the rich at the expense of the poor, most notably, major cuts in tax rates for the rich, major cuts in benefits for the poor. As well, the OECD stated that “This study dispels the assumptions that the benefits of economic growth will automatically trickle down to the the disadvantaged and that greater inequality fosters greater social mobility.” CCPA has shown in its work that these trends are a result of the replacement of the social contract that prevailed after the Second War by neoliberal policies and the subordination of society to the market during the past three decades.

These changes in policies and the growth in inequalities are evident now in the continued decreases in taxes and benefits, the attack on trade unions promoted by the federal government, right-wing think tanks, lawyers and consulting firms, and anti-union enterprises, and a relentless attack by all of the above on the positive role played by the public sector in Canadian society.  The result has been a general degradation of life for the vast majority of Canada and a degradation of Canadian society.

In spite of the vast research on inequality demonstrating the need for “a comprehensive strategy for inclusive growth” to reduce persistent and pervasive inequality, Jason Clemens introduces a red herring to justify current federal government direction, beating the drums for austerity, regressive social policies and systematic deregulation of labour markets around the world.

Errol Black is on the board of the CCPA-mb.

Leave a comment

Filed under economic well-being, inequality, public sector

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s