Social Policy in Ontario

Conditions deemed ripe for action on income inequality

Posted on June 17, 2014 in Equality Debates

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TheStar.com – News/GTA – Governments have the tools to reduce income inequality and the Canadian public expects them to act, Toronto forum told.
Jun 16 2014.   By: Laurie Monsebraaten, Social justice reporter

Broad concern about income inequality and a strong belief among Canadians that governments can play a role in reducing it form “a crucial condition for action,” a Toronto forum heard Monday.

“The first way to move public policy is to have a public perception and a media perception of the problem,” said Sheila Block, of the Wellesley Institute.

“What is exciting to me is that the attitudes reflect reality,” she told the gathering of policy makers and academics, sponsored by the Institute of Public Administration of Canada and York University’s Institute for Social Research.

Recent research by York University law and society professor Lesley Jacobs shows that 80 per cent of Canadians from all walks of life believe governments could do a lot more than they are actually doing.
“There is a general perception that policy makes a difference,” he said.

Income inequality in Canada jumped in the early 1990s, but researchers have only had the tools to measure it since 2003, said Brian Murphy, head of income research for Statistics Canada.

Though income inequality may have been relatively stable since 2000 — with the top 1 per cent earning about 10 per cent of all income in Canada — it is still important to understand the phenomenon and try to moderate it, he said.

“We should worry about it,” he said. “Particularly since it is showing signs of spiking upwards again.”

Public debt and budget deficits, globalization and a general distrust of government’s ability to solve complex problems are barriers to action, Block acknowledged. Raising taxes on the rich is problematic because there are too many ways for them to avoid paying. However, rearranging the corporate tax system that benefits high-income earners could make a difference, she noted.

“But it’s important to acknowledge that it’s not only one policy and it’s not only transfers we need to rely on to reduce the low end of the inequality spectrum,” she said.

The introduction of the Guaranteed Income Supplement and the Canada Pension Plan in the 1960s are examples of targeted policy interventions that had a massive impact on decreasing income inequality for seniors, Block said. Since then, poverty among seniors has dropped from about 30 per cent to about 5 per cent.

Legal changes to the way child-support payments are calculated and better enforcement to ensure parents get the money has helped lower lone-parent and child poverty.

The Canada Child Benefit and the Ontario Child Benefit as well as increases to the minimum wage since 2008 have helped reduce child poverty in the province from 15.2 per cent to 13.6 per cent in 2011, despite the economic recession, she said.

Public services such as health, education, social housing, child care and elder care can also play a role in narrowing the income gap at the low end of the inequality spectrum, she said.

Regulation at all government levels is another important policy lever. This includes provincial employment standards and labour relations legislation, regulation of the Temporary Foreign Worker program federally, and fair wage and community benefit agreements at the local level.

Star Business Editor Doug Cudmore, who moderated the event, credited the 2011 Occupy movement for catapulting the inequality debate onto the public agenda.

Although the Occupy movement was deemed a failure for not having specific demands when it had the media’s attention, Cudmore said the fact Monday’s forum even happened is a credit to the protesters.

“They drove North American society to discuss income distribution in a way that was just not done before,” he said. “In the long term, this was quite a dramatic change.”

< http://www.thestar.com/news/gta/2014/06/16/conditions_deemed_ripe_for_action_on_income_inequality.html >

Tags: economy, globalization, ideology, standard of living, tax

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