The OECD finds Canada a country of the comfortable middle

Posted on October 24, 2008 in Debates, Equality Debates, Governance Debates, Inclusion Debates – Full Comment/Editorial – National Post Editorial Board: The OECD finds Canada a country of the comfortable middle
Posted: October 24, 2008, by Kelly McParland

The Organization for Economic Co-operation and Development (OECD) handed out report cards on income inequality this week, and Canada received what you might call a C-minus. From 1970 onward, according to the OECD, Canada exhibited increasingly flat income distributions; but since the mid-1990s, when equality peaked, the rich have been growing richer more quickly than the poor.

This is not, OECD officials are quick to add, because any group has been faring poorly. The average disposable household income of Canada’s richest 10% is estimated to be about US$71,000, which is 31% above the overall OECD average (US$54,000). “The poor and the middle classes are also richer than the OECD average,” says the report, “but by less — their average incomes are only 18% above that of their counterparts in a typical OECD country.” Given that our economy does well by everyone, even though it does a little better still by its richest, it is an open question whether anyone should care at all about income inequality in Canada.

Taken to an extreme, of course, material inequality can obviously yield undesirable results: No one would want to live in a Canada where the mean income was as it is now, but the rich formed a small, super-wealthy oligarchy that ran riot over a great mass of the impoverished. But it is equally certain that a Canada where all incomes were equal is odious to the imagination. The chance of living better as a reward for innovation or productive work is the central feature of capitalist societies.

One of the main reasons we should be concerned with income inequality, the OECD tells us, is the effect on social mobility: “Children living in countries where there is large gap between rich and poor are less likely to improve on the education and income attainments of their parents than children living in countries with low income inequality.” Yet although Canada scores poorly on income equality, the OECD admits we do exceedingly well on social-mobility indicators. Wherefore, one asks, should we be concerned?

Moreover, though the wide range of Canadian incomes give us an unusually large share of so-called relative poverty, in absolute terms we have few of the genuinely poor: “Fewer households [in Canada] than in other countries,” the OECD says, “struggle to purchase basic goods and to have decent housing and other living conditions.”

At any rate, the trend toward greater inequality will have to carry on for some time before Canada begins to resemble the Metropolis of Fritz Lang’s imagination. For now, our income distribution is still most comparable to those in moderate-left European states such as France, Holland and Belgium. As knowledge of the world might lead one to expect, we are much more egalitarian than the Asian tigers, the United States or even the U.K. and New Zealand; and we are much less so than the equality-obsessed, homogenous Nordic countries.

Perhaps conservatives and liberals can even agree that it is, on the whole, a pretty comfortable niche in which to dwell.

National Post

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