Driving us apart


Long-time cromrades may remember that I took part (mostly as a spectator) in Occupy Vancouver last year. The general theme of the Occupy movement was an invitation to examine the state of inequalities and inequities in our supposedly fair and meritocratic capitalist system. The thesis advanced by Occupy is that this system was not in fact fair, and that regardless of party affiliation, the political system was set up to benefit the elite at the expense of the majority.

Of course, one of the major criticisms of Occupy was that it was almost entirely caught up with examining the problems from a purely political standpoint, and showed little interest in examining the other root causes of social inequality – racism, sexism, classism, and various other prejudices that have put the fairness of the system to the lie for generations. It was only when those problems began to visit themselves on the people who didn’t ‘deserve it’ that is was suddenly an issue in need of a national response.

That being said, Occupy did push income inequality to the forefront of political consciousness. Which is why a story like this gets reported now:

The proportion of women among the ranks of Canada’s wealthy elite has almost doubled over the past 30 years, new data released by Statistics Canada Monday shows. The data agency published its analysis of the richest one per cent of Canadian tax filers between the years 1982 and 2010 on Monday. From the total number of all Canadian tax filers, Statistics Canada narrowed its list down to 254,700 people at the top, who make up Canada’s “one per cent.”

(snip)

The cutoff to be included in Canada’s one per cent was $201,400 in 2010. That was a 37 per cent increase from where the cutoff was in the first year of the survey, $147,500 in 1982. The data also shows the gap between the rich and poor is getting wider. In 1982, the median income of Canada’s one per cent was $191,600. That was seven times higher than the $28,000 median for everybody else. By 2010, that ratio had widened to 10 times, from $28,400 for everybody else to $283,400 for the one per cent.

The report uses 2010 constant dollars, so it’s an apples-to-apples comparison. The 99 per cent of people were actually taking in much less than $28,000 in 1982, but in terms of buying power, their share is essentially the same today as it was then.

And while I can imagine that the Occupiers are glad that this is making news, I’m sure they’d prefer that the trend was moving in the other direction. The article notes that the very richest Canadians are making proportionally more than they used to, but they’re also shouldering a bigger share of the tax burden. I suppose that’s put in there to make us feel better – as though justice is served because we’re “taxing the rich”. If that was indeed the intent, then reality has once again spoiled the party:

Corporate tax freedom day continues to get earlier with each passing year thanks to generous government tax cuts, the Canadian Labour Congress says in a report issued Tuesday. While most individual Canadians don’t earn enough to pay off their taxes until sometime in late June, the labour group says the country’s businesses will have reaped sufficient revenue to pay their year’s share by Jan. 30.

The calculation is for 2011, but the CLC says that was two days earlier than in 2010 when it came on Feb. 1, and notes that it was not long ago when so-called “corporate tax freedom day” came much later in February. It was likely even earlier in 2012 and will be again this year, since in 2011 Ottawa had not as yet reduced the federal corporate tax rate to 15 per cent. That was accomplished in January 2012. The new report, released Tuesday, attempts to make the case that Canadian firms have benefited greatly from years of Conservative and Liberal government tax policies, which have cut business levies more aggressively than personal taxes.

It is important to note here that this is not the result of a single party’s agenda (although we could certainly imagine that a Liberal majority government would have responded to the financial crisis very differently than Stephen Harper did), but rather the cumulative effects of an axiomatic financial approach about making Canada “more attractive to businesses”. And again, one could argue that these policies have created the best possible economy Canada could expect, and that neoliberal ideas about cutting corporate taxes to create booming economies has lifted all boats in the rising tide.

But in again comes that pesky reality:

Canada isn’t living up to its potential or its reputation when it comes to societal issues like poverty, government and inequality, according to the Conference Board of Canada. The group gave Canada a ‘B’, good for a 7th place ranking out of 17 developed countries, but it said the “middle-of-the-pack” ranking leaves room for improvement.

Getting an ‘A’ at the top of the rankings were the Scandinavian nations (Denmark, Norway, Sweden and Finland) as well as the Netherlands and Austria. At the bottom were Japan and the U.S., both getting a ‘D’ ranking.

Inequality was a major factor in Canada’s low ranking, according to the report. Canada ranked a ‘C’ on both income inequality and the gender income gap. Many studies have pointed to the rise of income inequality in Canada over the past 30 years. The top 10 per cent have seen their average income rise 34 per cent, while the bottom 10 per cent have seen their earnings rise just 11 per cent. The report says income inequality is cause for concern, especially in education.

There’s a couple of sections worth highlighting in the summary of the report:

In reducing inequality and poverty, the report finds that the Canadian government has proven quite effective. The study notes that due to the tax system and transfers to the poor, income inequality is 27 per cent lower than it otherwise would be, and without government benefits and taxes, poverty rates would be 23 per cent, compared to the current 12 per cent.

Hmm, so government has a role to play in reducing poverty and balancing inequality, and if it did a better job of that we’d rank more favourably internationally, eh? What a weird finding. I wonder if the Occupy folks knew that (spoilers: they totally did).

Lafleur calls the report “myth-busting” of the idea of Canada as a “kinder, gentler nation,” saying that self-image is “based largely on a narrow Canada-U.S. comparison,” and that the U.S. ranked dead last among the 17 countries ranked.

And yeah, I’ll be really glad when this “well at least we’re not America” thing dies a painful death, choking on its own smug vomit. Downward comparisons are seductive, but ultimately harmful. We should be trying to get better, not thanking our lucky stars we aren’t the worst.

The take-home message of this seems to be that rather than making things better, our current method of handling economic problems – this Reagan-esque belief that if sufficiently pumped full of cash, businesses will explode into wealth for all – is making the world worse for us, not better. The longer we continue to delude ourselves into thinking that if we just keep ruining things more, then somehow it’ll come full circle and start to improve, the longer it’s going to take us to pull out of our nosedive, and the further apart the haves will get from the have-nots.

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Comments

  1. mildlymagnificent says

    Anyone who’s read The Spirit Level: Why More Equal Societies Almost Always Do Better would have noticed that the USA is an extreme outlier on practically every criteria used to assess advanced industrial societies. I must confess that I didn’t notice anything special about Canada – certainly not enough to retain any definite impression. Which would mean that Canada is in ‘the rest of the pack’ along with Germany and France and isn’t in the noticeably different groups at either end of the various scales.

    As for the ruining things more, just keep going as we are theme, it always reminds me of the stubborn driver who won’t listen to the passengers who point out we took a wrong turn several miles back, won’t stop to read the map and certainly won’t ask any locals who might know how to get ‘there’ from ‘here’. I know the area, I know all the shortcuts and *this* is the best way to go. So there. Just be quiet and trust me. You’ll see.

  2. says

    but rather the cumulative effects of an axiomatic financial approach about making Canada “more attractive to businesses”.

    Of course, all other nations are doing the exact same thing. And despite our “A” grade, this unfortunately includes the Netherlands. So the effect is ever lower taxes for all (big) companies everywhere, without much of the desired effect of any companies relocating. Who could have seen that coming?

  3. says

    Crommunist writes:
    Way to hit us right in the inferiority complex

    Could you check with your Department of Apologies? You probably need to be sorry for that, somehow.

  4. says

    The take-home message of this seems to be that rather than making things better, our current method of handling economic problems – this Reagan-esque belief that if sufficiently pumped full of cash, businesses will explode into wealth for all – is making the world worse for us, not better. The longer we continue to delude ourselves into thinking that if we just keep ruining things more, then somehow it’ll come full circle and start to improve, the longer it’s going to take us to pull out of our nosedive, and the further apart the haves will get from the have-nots.

    OMFSM, Crommunist, are you suggesting that right-wing/libertarian skeptics might be wrong? Why, it sounds like you’re trying to purge the skeptical movement of people who don’t share your political views! FTBULLIES!!!!

  5. lirael_abhorsen says

    Downward comparisons are seductive, but ultimately harmful. We should be trying to get better, not thanking our lucky stars we aren’t the worst.

    This also applies within the US, where some of us in the Northeast (where I live) are a little too enamored with smug downward comparisons with the South (where I grew up).

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