Who wants to talk about income inequality?

Posted on in Equality Debates

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TheGlobeandMail.com – news/commentary/opinion
Published Wednesday, Nov. 23, 2011.   Jeffrey Simpson

The Occupy movement – if movement is the proper word – fizzled after a brief burst of artificial importance in the media.

The souls who camped out were a disparate lot, with rather inchoate ideas about how to change society, let alone challenge seriously the capitalist system. Their camps are now being dismantled, sometimes by court order.

They did point, however, to a challenge few politicians want to address: growing income inequality and the verifiable fact that, within that growing inequality, the very, very rich are pulling away from the rest of society. You can see this at work within the upper reaches of the corporate sector, where the gap between what bosses and employees make has widened. No longer do compensation committees look at this metric; instead, they compare CEOs’ compensation with that of other CEOs’, so that the vortex of higher pay continues within the narrow confines of cozy cross-comparisons.

The Occupy movement began in the United States, where the recession started, courtesy of the major financial institutions – a collapse that plunged the country into a nightmarish combination of large deficits, swelling debt and high unemployment.

Long before the recession, however, the U.S. was becoming a significantly more unequal society, as the Congressional Budget Office explained in a recent report. The CBO looked at the years 1979 to 2007. It found that, whereas average household income after inflation grew by 62 per cent, the top 1 per cent of the population had enjoyed income growth of 275 per cent. The bottom 20-per-cent’s after-tax income had grown 18 per cent. Said the CBO: “As a result of uneven income growth, the distribution of after-tax household income in the United States was substantially more unequal in 2007 than in 1979.”

Market income was increasingly concentrated in fewer hands, said the CBO. Government transfer programs, combined with weaker redistribution of income through the tax system, could not counterbalance the fact that the market was putting more and more income in fewer and fewer hands.

Put another way, market income for the top 1 per cent tripled from 1979 to 2007, whereas for a household at the mid-point of the income ladder, market income rose only 19 per cent. Not surprisingly, therefore, the share of total market income for the top 1 per cent rose to 20 per cent from 10 per cent.

In the budget debates of Washington, the Republicans want to keep the tax system intact – the one that contributed to this inequality. Almost no one in the U.S. political system talks about redistribution of income.

The Occupy movement tried to shine the light of publicity on the big incomes of the wealthiest, especially in the financial sector. Through no fault of the movement, however, Americans weren’t much interested. For example, a recent Ipsos poll asked people in various countries for their top three issues. The share of Americans – 19 per cent – who identified “poverty/income inequality” as a top-three item was the lowest among the seven countries surveyed.

In Canada, the share concerned about poverty/income inequality was 30 per cent, behind health care (of course) at 47 per cent, unemployment/jobs at 39 per cent and taxes at 37 per cent. That ranking showed an increase in concern about poverty/income inequality, since it now ranks well above crime, immigration, environment and climate change.

One reason for the increase in Canada might be that income inequality has risen here, too. Inequality is not as severe as in the United States, but it is higher than everywhere in continental Europe. Indeed, the so-called “anglosphere” countries of the U.S., Britain, Canada and Australia are the places in the industrialized world where income inequality is most pronounced.

Well-intentioned philanthropy, much in the news lately, cannot do much against these market trends and inadequate government programs to offset those market trends. Nor does political attention much fall on the problem, since all parties now pitch their appeals to the actual or fictional “middle class.” The poor don’t vote much, are often hidden, don’t get much media attention and are usually not unionized.

Income inequality within countries also seems to be a worldwide phenomenon. The so-called BRICs – Brazil (with the exception of its “Bolsa Familia” program), Russia, India and China – are tremendously unequal societies, and getting more unequal all the time.

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This entry was posted on Wednesday, November 23rd, 2011 at 11:46 am and is filed under Equality Debates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to “Who wants to talk about income inequality?”

  1. Johnie says:

    I want to send you an award for most helpful inenertt writer.

  2. Suluter says:

    The term income inequality elicites many and varied responses. Is it about feminism and women’s equal rights? Is it about ending racial discrimination? My answer to this, is that income equality is deeply rooted within many of our present day Canadian ideologies.
    Focusing on the gap between the rich and the rest of us should be our focus. As aspiring social workers, our intention arent’ to make the systemic problem of poverty disappear from public discussion but, rather, to show how much the majority of Canadians have in common when it comes to income inequality. It is a systemic problem which affects us all. We need to reflect Canadians’ reality back to them and focus on what’s at stake.

    Weeks ago, in a democratic world, large groups of citizens came to Wall Street revealing the hard limits of authoritarian constraints. They were demanding their right to be seen and heard. The 99 per cent, the new income inequality frame, has been ignored by governments of all levels, in far too many countries, for far too long. These Wall Street occupants are showing us that when the system isn’t working for the 99 per cent, something is dangerously wrong with our democracy. And they won’t take it anymore. They want government to work better and they’ve gone to Wall Street to make their point.
    This demonstration illustrates that they have shown us a new frame with which to view income inequality in North America, so it isn’t about individuals or individual failure. It’s about a system that’s failing the vast majority of citizens who believe things can be better than this.

  3. Alicia Fahrer says:

    These types of activism like the occupy Wall Street movement, are defiantly a step in the right direction. People took to the streets of New York City and protested against the issues that they believe are unjust within our society. And they did this in a place where media could not ignore them. Their messages reached people all over the world.
    Unfortunately without more supporters and people who believe that our society can and needs to change, little progress will actually be made. There needs to be a more equal distribution of wealth and I believe that the only way we can achieve this is through unity. This small number of people might control the majority of the wealth but we are fortunate to live in a democracy and with that we have the power of the vote.

  4. Marisa Alamenciak says:

    Income inequality is a serious issue within society.. Although people thrive to create equality, we are far from succeeding. The gap between what the bosses and employees make has widened. It is inevitable that there cannot be complete income equality, but that is the ideal picture painted within society. What about those who are making a substantial amount of money, will they be willing to give up the amount of money they make to create equal income among all? That is not likely to happen.

    Society still portrays views of capitalism, and in my opinion that will not change. There are different classes consisting of upper, middle and lower class individuals. Growing up, people have always told me that to get what I want I have to work for it, because nothing in this world is free or easy. To try and create a world where everything is equal now in my opinion is impossible.

    I do however believe that increase in wage for lower paying jobs would be beneficial to those working. It would be impossible to equalize income, but to provide more to employees who are a major contributor to the employers making a profit it would fix the problem but help. Having a few extra dollars in their bank account would be beneficial and play a role in helping employees get the amount of money they deserve for the work being done.

    I believe that this is a touchy subject within society, and it may not be fair, but rome wasn’t built in one day, and this problem won’t be fixed within that time either. It will take time and effort, but if people fight for what they believe in that is the only way that a change will be made


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