Reducing income inequality a top priority for 2021

Posted on January 4, 2021 in Equality Debates

Source: — Authors: – Opinion/ContributorsJan. 4, 2021.  

Since COVID-19 first sent many workers to their couches and kitchen tables at home, there’s been talk about what our post-pandemic workplaces could look like — or whether we’d need workplaces at all.

I have to admit, I’m not too concerned with whether we ditch the water cooler. I’d rather talk about how we’re continuing to short-change vital workers while Canada’s wealthiest CEOs are earning record incomes. Surely our dreams of post-pandemic work should address this widening gap?

As it stands, dignity, protection and decent wages for front-line workers are still an afterthought. Every day, these workers risk their lives to deliver our packages, stock our groceries and care for our elders at incomes that can barely feed a family in our achingly expensive city.

It’s a different story for the senior leaders of some of Canada’s largest corporations. The federal government established the Canada Emergency Wage Subsidy (CEWS) intending that recipients would rehire workers and prevent job losses. Yet in late December, it was revealed that much of these funds went straight to senior managers and wealthy shareholders. The CEOs of 68 companies that paid out dividends while receiving CEWS earned an estimated $30 million in dividends themselves.

As has been well documented, COVID has had a devastating effect on income inequality. Working-class families are taking on increasing debt loads — 44 per cent of households earning $40,000 to $60,000 are $200 or less away from insolvency — while the highest-earning Canadians are saving money at unprecedented levels. In its January 2020 report, the Canadian Centre for Policy Alternatives said that Canada’s 100 most affluent CEOs earned salaries in 2018 that averaged 227 times that of their lowest-paid workers, and that by 10 a.m. on Jan. 2, 2020, they would make as much money as the average Canadian worker would make all year.

When leaders are earning hundreds of times more than their workers, especially during a global crisis, and confidently lining their pockets with government subsidies as they do it, something is profoundly wrong.

We should be pushing for bold policy that promotes equity and well-being for any company’s lowest-paid workers, and most importantly, that can’t be exploited by CEOs. I’d like to see us create targeted interventions to support low-income earners, and to penalize corporations for excessive CEO-to-worker pay ratios. Establishing a fixed wage multiplier, where CEO pay is directly connected to that of their lowest-paid employees, would be a great start.

Such a move can have transformative effects on the health and prosperity of workers and companies alike: in 2015, the CEO of Gravity, a card payments company in Seattle, introduced a $70,000 minimum salary for his 120 staff. To pay for the raises, he took a personal pay cut of $1 million. Since then, his company’s value has more than doubled, but the more meaningful metrics are found in his staff’s well-being. They’ve been able to have children, purchase homes and grow their pensions.

I’ve also seen the impact in my own workplace. During my time at FoodShare, the lowest paid workers have had a 29 per cent increase in pay, which includes a recently announced 4 per cent increase for all staff. In just a few short years, this decision seems to have had a hugely positive impact on morale. It has allowed us to recruit talented staff, and it is one of the ways we aim to value everyone’s contributions to our work rooted in challenging food insecurity and poverty across the city. If a non-profit dependent on fundraising can make these changes, so can the corporate world.

Ultimately, these actions shouldn’t depend on CEO benevolence, but progressive legislative change. Most Canadians agree that we can’t rely on the charitable instincts of individuals to solve our collective problems, and I agree. According to a survey from the Broadbent Institute, 89 per cent of respondents think that reducing income inequality should be a government priority. Given our country’s quickly widening gap between the “haves” and “have nots,” the time to act is now.

The year 2020 has been a profoundly challenging year, particularly for people who were already made vulnerable by racism and oppression, and we’re surely all eager to leave the old year behind. But let’s also choose to leave behind our country’s reliance on worker exploitation.

By addressing the widening gap between CEO salaries and their lowest-paid workers, we can emerge out of this pandemic with healthy workers and a healthy economy — one where we’re truly all in it together.

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This entry was posted on Monday, January 4th, 2021 at 10:25 am and is filed under Equality Debates. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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