Well-being

Two different organizations have recently released helpful reports on economic equality and well-being that cast a somewhat dispiriting picture of the state of prevailing economic philosophies. On Tuesday, the Conference Board of Canada, a business-funded think tank, released its second report of the summer on income inequality, detailing how inequality has risen faster in Canada than in the United States.

The Conference Board report also notes that since the mid-1990s, Canada has had the fourth largest increase in inequality among its peer countries. Read more »

The recession of 2008-2009 hit fast and furiously, with a steep decline in Gross Domestic Product and employment. Since then, both indicators have recovered well, leading some to trumpet Canada’s quick recovery from the recession. But other indicators, such as social assistance caseloads, have not seen the same strong recovery. And still other indicators, while on their way back to pre-recession levels, still reveal worrisome trends.

We know that the recession significantly increased Canada’s poverty levels. But do Canada’s poor now risk being permanently left behind? Our survey of the economic indicators over the past several weeks suggests that the answer is yes. Read more »

Does Canada benefit from attracting wealthy tax dodgers to invest in local business while enjoying the low tax rates of the “Switzerland of the North?” A story by Macleans business writer Jason Kirby this week argues that Canada should avoid the urge to tax the wealthy because these “Golden Geese” bring with them innumerable economic benefits. The article highlights how Canada’s comparatively low personal and corporate income tax rates, combined with its lack of inheritance or gift taxes, appeal to those super-rich who are tired of paying higher taxes elsewhere.

But while Macleans is singing the praises of low taxes for the high income, other business voices are sounding a message of concern about growing income inequality. In January, the Risk Report of the World Economic Forum called increasing wealth and income disparities a significant concern, linking the rising disparity to the evolution of most other global risks. Min Zhu, a special advisor to the Director of the International Monetary Fund, told the Forum’s gathering in Davos that “The increase in inequality is the most serious challenge for the world.” Read more »

Last month I participated in a press conference on behalf of Canadians for Tax Fairness, arguing for fairer taxes instead of service cuts. A reporter called me afterward and asked me if tax cuts weren’t necessary to ensure economic growth. “Oh no,” I assured him. “The Finance Department’s own calculations show that investing tax revenues in public services that Canadians need has a higher rate of economic return than tax cuts.”

My answer was true, but I nonetheless wondered later if I had in fact given the right answer. The reporter’s question assumed that economic growth was so important that we should do anything to achieve it – even lose valuable public services for the sake of cutting taxes if tax cuts were necessary to stimulate growth. My answer to him accepted this assumption. Read more »

Yesterday we looked at the changing income distribution and how the rise in income inequality has fostered the illusion that there is not enough money any more to pay for the welfare state and support a vibrant charitable sector. Besides the obvious outcomes of government cutbacks and charitable retrenchment, this rising income inequality has a number of more insidious consequences. Read more »

Recently I heard the Anglican Bishop of Ottawa, John Chapman, speak at the AGM of a local community chaplaincy. Bishop Chapman described the evolution of community ministries from the rise of the social gospel to the heady days of the 80s when churches and other organizations had plenty of money and energy to offer community-based ministries and anti-poverty initiatives. And then, said Bishop Chapman, came the rise of global capitalism and the notion that the needy could be divided into deserving and undeserving, and retrenchment began. Now, we’re in a position where churches are losing their own staff. The pot of money available not just to community ministries but to churches is smaller. Organizations have to fight for enough funding simply to survive.

“Where has all the money gone?” I thought. “Why are all these organizations struggling? What happened to the money that was so abundantly available 25 or 30 years ago?” Read more »

My mother-in-law passed me Empire of Illusion by Chris Hedges, saying “You just have to read this one.” The next day, before I had even had the chance to crack the covers, Bob Goudzwaard referenced the book twice in his AGM speech, calling it “a most excellent little book.” With two such ringing endorsements, I could hardly put off reading the book. And having done so, I would echo Bob Goudzwaard: it is indeed a most excellent book.

Empire of Illusion is a stinging indictment of our celebrity-obsessed, narcissistic culture that has lost sight of how the values we preach have been perverted and replaced with consumerism, corporatism and militarism. Hedges laments the state of democracy, the power of corporations and the wealthy, the growing class divide, the unwillingness or inability of our elites to stop the slide, and the illiteracy and obsession with illusion over reality that prevent most of us from identifying the problems. Read more »

The OECD released a report last week highlighting the rapid growth of inequality in Canada and other rich OECD countries. The report covers the period from the mid-1980s to the late 2000s, meaning that this rapid growth of inequality took place during a period of strong economic growth. In other words, trickle down is a complete and utter failure – it’s led to the rich getting richer, not to a rising tide that lifted all boats.

The OECD report offers several reasons for the rapid growth of inequality. Not surprisingly, distribution of salaries and wages is primarily responsible (that’s not hard to figure out when the best paid CEOs make 155 times more than the average worker). This also reflects the growing trend of precarious labour, in which nearly one-third of jobs are low paid, part-time or temporary, offering few or no benefits, and provide no job security. The OECD report identifies globalization as a driver of change in employment structure impacting wages. Read more »