Target the poor, not the rich, for real solutions to income inequality

Posted on November 28, 2013 in Equality Debates – ROB/Economy/EconomyLab
Nov. 27 2013.   Alan Broadbent

The problem with poor people is they don’t have enough money, someone once said. With the recent attention on income inequality in The Globe and Mail and The Economist, it is important to shift the conversation from problems to solutions.

Some have focused on the 1 per cent at the top, so successfully highlighted by the Occupy movement. Proposals range from moderating extreme CEO pay packages, to taxing high incomes, to urging the rich toward robust philanthropy. Defenders of the rich in right-wing think tanks point out, accurately, that the results would be modest.

But attention is beginning to shift to what is the basis of the problem, and that is that too many people have too little money. Even working Canadians have too little money. Many of them are victims of decades of driving down wage rates as a way of finding efficiency in the production of goods and services, leading to low levels of family income.

The increase of service jobs, many of them seasonal, part-time and badly paid, reflects the daily grind for many of the working poor. Dreams of iPads, warm winter vacations and luxury cars turn into reality for only one-third of Canadian families. Ambitions to own a home within reasonable distance of work are becoming harder and take longer to turn into reality, because it is taking longer to accumulate the needed savings.

What has become crystal clear is the cost of doing nothing. There is growing evidence that links the social outcomes of poverty to increased costs in health care, the criminal justice system, education, and labour market absenteeism and turnover.

While some are keen to discipline excessive salaries at the top of the range, the real problem is the low incomes at the bottom, and that is where the solutions must begin. The good news is that there is a range of ideas and interventions that are ready to be implemented.

Here are five ideas that would go a long way to addressing the problem:

The problem is complex, but solutions are at hand.


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