Work hard and you'll get ahead. That's been the mantra of folks who prefer their governments small and their success big.I fervently hope the Conservative government listens to this. I pray that the top 1% realize the dark days ahead can't be avoided if they do not listen to this. The social contract in Canada is threatened by runaway elites. They need to be harnessed to the rest of us to ensure that we as a country progress and don't fall apart in some idiotic fight over crumbs off the table of the ultra-rich.
But as two recent Conference Board of Canada reports show, that mantra is being cast into doubt. According to the voice of Canada's business establishment: "High inequality can diminish economic growth if it means that the country is not fully using the skills and capabilities of all its citizens or if it undermines social cohesion, leading to increased social tensions. . High inequality [also] raises a moral question about fairness and social justice."
Say the word "inequality," and many people automatically assume you're talking about the poor. But a mounting body of research shows that, left unchecked, a growing income gap affects the rich, the poor and everyone in between.
Economic growth used to be touted as the surest ticket to broad-based prosperity. But during the strongest period of economic growth in the past 30 years, between 1997 and 2007, a third of all income gains went to the richest 1% of Canadian tax filers.
Think that's normal? In the 1960s, the most recent comparable period of sustained growth, the richest 1% took only 8% of the gains from growth.
Not since 1920, when Ottawa began to collect income data, have Canada's elites pocketed a larger share of the income gains from economic growth. Top marginal tax rates for millionaires also are at rates last seen in 1920.
Canada's top 100 CEOs have seen a 13% year-over-year jump in average pay, rising to an average of $6-million. In contrast, the average earnings of employed Canadians has fallen to $38,500.
It's the promise of their own upward mobility that has many Canadians willing to brush aside the handsome gains enjoyed by the rich in the past 20 years. But rising inequality, in good times and bad, makes it increasingly feel like the game is rigged, destabilizing foundational values and expectations.
So what can we do to turn this story around?
Some will call for change that doesn't much disturb the status quo: Improvements in productivity, or tax cuts for Canadians with the lowest taxable incomes. But truly reducing inequality requires either increased incomes or lower costs for the majority. That means bosses and owners sharing more of the productivity gains and profits with workers; or paying more tax to expand affordable access to post-secondary education, public transit and child care, thus taking the pinch out of small paycheques.
For those who feel these measures are too costly, they should consider the alternative.
History has shown us, time and again: When too much is controlled by too few, something has to give. Continuously rising inequality is unsustainable.
Everyone has a stake in fixing this. And the fix has no political colour. It is about the future of Canada and where we're heading as an economy, a society, a democracy. That's why even conservatives are worrying about Canada's rising income gap.
Friday, September 23, 2011
Bad News for Canada
The National Post is not known for its "socialist" message, but they've published an article that would warm the heart of any Marxist. They've printed the truth: