Gap between Canada's rich and poor widening dramatically
B.C.'s opposition New Democrats waded into global economic waters yesterday, touting a report from the respected Organization for Economic Cooperation and Development which suggests Canadians are become rapidly less and less equal -- and challenging the Economics 101 notion that 'a rising tide lifts all boats.'
Some breathed a sigh of relief last month when Occupy movement protests against economic inequality across the continent were evicted – be it by fire code and injunction, as in Vancouver, or police spies and massive tactical team raids as in parts of the U.S.
But not so fast, warned the respected Organization for Economic Cooperation and Development (OECD) yesterday in a report showing that the gap between rich and poor is widening dramatically – and Canada and B.C. are among the industrialized world's worst for inequality.
The groundbreaking study confirms what many analysts and social movements have been saying for decades – that contrary to some economists' claims that encouraging prosperity for the wealthiest “trickles down” to benefit everyone, in fact more people have been getting poorer while only a few move up.
“Income inequality impacts really every aspect of our society,” Adrian Dix, leader of B.C. opposition New Democrats, told the Vancouver Observer. “Income inequality impacts really every aspect of our society. It's the most important role for government these days – to make sure everyone has a chance to succeed in our province.
“Depending on which statistics you use, we have the highest or second highest income inequality of any province in this country. In Canada, inequality is growing even faster than in the United States.”
Dix issued a press release yesterday promising to focus on improving education funding and taxing financial institutions more if he is elected.
The OECD – an 34-member economic organization of some of the world's wealthiest market-driven democracies – is not known for ideological polemics. But this week's 400-page report, Divided We Stand: Why Inequality Keeps Rising, reveals that the richest 10 per cent of Canadians earned on average $103,500 a year, while the poorest 10 per cent earned only $10,260. That gap has risen over the last 20 years.
Among the ultra-wealthy, the richest one per cent grabbed 13.3 per cent of Canadian incomes – and the stinking-richest 0.1 per cent doubled their take to five per cent of incomes. Together, these statistics, compiled and compared over decades, place Canada seventh worst among the 34-member countries.
And while the OECD has been historically low on bombast or hyperbole, its secretary general shot a hole through the aforementioned “trickle-down” economic theory that a rising tide lifts all boats. In fact, economists were surprised to find the opposite true.
"This study dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged and that greater inequality fosters greater social mobility," Angel Gurria said in a statement. "Without a comprehensive strategy for inclusive growth, inequality will continue to rise."
"Fostering more and better jobs, enabling people to escape poverty and offering real career prospects, is the most important challenge for policy-makers to address," the report said. "Investing in human capital is key. This must including the early childhood period and be sustained through compulsory education."