Occupy Wall Street has opened up public discussion about a problem that keeps getting worse: the gap between the rich and the rest of us – encapsulated in the Occupy movement’s slogan We are the 99%. Here’s a roundup of some of the stories emerging on the issue of income inequality this week.
Call it “The Great Disruption” or the “Big Shift”: “Two master narratives — one threat-based, one opportunity-based, but both involving seismic changes.” Thomas Friedman writes about it here.
Carol Goar calls it too big to ignore.
This article looks at the disappearing middle class dream in Canada: “Years of grinding away at middle-class lifestyles, and years of accumulating debt to try to maintain those lifestyles, have taken their toll on the core optimism and hope that characterized the middle-class outlook and informed its political judgments. Few people now believe their children will lead better lives than they have, in a complete reversal from the ethic that built this country. Most people are more afraid of falling further behind than they are excited by the prospects of getting ahead.
These changes in the middle-class circumstance means that fear has become a much stronger motivator than hope. The polarization of economic outcomes will lead to a polarization of political choice. From “a rising tide will lift all boats,” we are moving to a zero-sum game. People who do not believe that they or their children can move up the ladder turn from hope to resentment. Instead of supporting economic growth policies that might advance their standard of living, they will demand tax and social policies that redistribute income.”
The head of the Bank of Canada calls the Occupy movement constructive: “In a television interview, Mr. Carney acknowledged that the movement is an understandable product of the “increase in inequality’’ – particularly in the United States – that started with globalization and was thrust into sharp relief by the worst downturn since the Great Depression, which hit the less well-educated and blue-collar segments of the population hardest. “You’ve had a big increase in the ratio of CEO earnings to workers on the shop floor,’’ Mr. Carney said, according to a transcript of the interview with Peter Mansbridge of CBC News, parts of which aired on Friday evening. “And then on top of that, a financial crisis.’’
But Mr. Carney – a former Goldman Sachs Co. investment banker – suggested that while he understands the frustration, some of it is rooted in an overly pessimistic view of policy makers’ resolve to make it harder for financial firms to take the sort of risks that led to the meltdown of 2008 and the brutal recession that followed. “There’s a frustration with policy and a frustration that, `are things going back to business as usual,’’’ Mr. Carney said in the interview. “If I may say, that is not going to happen, but I can understand the frustrations.’’
This article looks at income inequality in Canada, and how it’s rising faster than it is in the U.S.
Linda McQuaig says ““It’s basically about what I would call the massive transfer of income and wealth over the past 30 years from the middle and lower classes of Canada to people at the very top and why that’s something that should concern us as a society.” Read more here.
This article says it’s a generational problem: “It all has the makings of a “silent generational crisis,” according to researchers. “The baby boomers as parents lucked out, and their children for the first time will not enjoy the same standard of living as their parents,” said Paul Kershaw, a political scientist at the University of British Columbia. “It’s become hard to raise a young family and easier to retire.”
Prof. Kershaw, an associate professor at the Human Early Learning Partnership, released a study on Tuesday with colleague Lynell Anderson showing that new families today have a lower standard of living than the baby-boomer generation, even though the Canadian economy has doubled in size since 1976.
And while the share of young women contributing to household incomes is up 53 per cent, average household incomes for young couples overall have remained static since the mid-1970s, after adjusting for inflation. Yet housing prices during the same period rose 76 per cent nationwide.
That’s left Canadian parents raising young kids today squeezed for time, money and child-care services, Prof. Kershaw said. “What we have now is Generation Squeeze,” he said.”
This article looks at Canada’s middle class: “For the middle class, the real irritant is the sense that average folk can no longer reasonably aspire to get ahead. The dream of upward mobility – in essence, the social contract at the heart of democratic capitalism – has been shattered.”
Heather Scoffield looks at the rise of the richest vs. the income stagnation of the many, featuring this quote by Lars Osberg: “”what we’re seeing is an accumulation of grievance.” Read it on Global News.
This article looks at Canada’s Occupy movement and puts it in context, including mainstream journalism’s struggle with this news story: “I think one of the main challenges is that there’s nothing simple about this movement and journalism always responds best to simple black and white situations and this one is shades of grey,” said Ann Rauhala, a Ryerson University journalism professor who has worked at the CBC and as foreign editor of the Globe and Mail. “That’s hardly an original observation but it is altogether so true.”
“In the Canadian media you can see people following the predictable courses,” she added citing a few less than stellar approaches taken in coverage of and comment on the Canadian protests. “I am often disappointed by our journalistic leaders in this country who so often revert to the easiest, cheapest shot.”
This article looks at the oligarch and democracy: “[D]emocracy appears chronically dysfunctional when it comes to policies that impinge on the rich. Despite polls consistently showing that large majorities favor increasing taxes on the wealthiest Americans, policy has been moving for decades in the opposite direction. Reduced taxes on the ultra-rich and the corporations and banks they dominate have shifted fiscal burdens downward even as they have strained the government’s capacity to maintain infrastructure, provide relief to children and the poor, and assist the elderly.”
This article looks at America’s ‘job challenge’: ““Labour and capital are out of sync,” said Tyler Cowen, an economist at George Mason University in Fairfax, Virginia. “It seems be a growing and strengthening trend… (and) suggests there is this longer-term structural change.”
Here in Canada, Ian Macdonald looks at jobs as the answer.
This article, by one of Canada’s high income earner, looks at the problem of lax government and low taxation: “I am not down on government, and am concerned about its withering presence. In my lifetime, taxes on the wealthiest of Canadians have been cut by nearly half, and of course, I have benefited too, though I am probably only a 2 percenter, just outside the charmed circle. I would be pleased to pay more taxes, but repeating that too often could get you classified as weird, and possibly worse.”
This article calls this the post-ideological era and considers its implications: “On this account, the fundamental choice is no longer the ideological one we were indoctrinated to believe — between free markets and controlled economies — but rather a continuous choice between kinds of regulation and how they distribute wealth in society. There is, in the end, no “realistic alternative,” nor any “utopian project” that can avoid the pervasive regulatory mechanisms that are necessary to organize a complex late-modern economy — and that’s the point. The vast and distributive regulatory framework will neither disappear with deregulation, nor with the withering of a socialist state. What is required is constant vigilance of all the micro and macro rules that permeate our markets, our contracts, our tax codes, our banking regulations, our property laws — in sum, all the ordinary, often mundane, but frequently invisible forms of laws and regulations that are required to organize and maintain a colossal economy in the 21st-century and that constantly distribute wealth and resources.”
This article looks at the Occupy Canada movement and suggests it isn’t about the 99%, it’s about the 30% in the middle. “During this past recession the middle class has faced an extended period of uncertainty about their economic future. The uncertainty for the U.S. middle class is even greater. They are worried their relative position in society could worsen if things don’t change soon — and they are not happy.
So the discontent is not about that 1 per cent of Canadians who own more than the rest of us. The discontent is about the 30 per cent of Canadians living with middle class incomes that aren’t keeping them far ahead of the Joneses.”
This article shows consumer confidence is waning in Canada: ““This is the lowest confidence level that we’ve seen in two years,” pollster Nik Nanos said of his survey, which measures Canadians’ perceptions of the economy and its strength.”
This article considers the theory of ‘last place aversion’. A quote from the article: “Our work suggests that people exhibit a fundamental loathing for being near or in last place – what we call “last place aversion.” This fear can lead people near the bottom of the income distribution to oppose redistribution because it might allow people at the very bottom to catch up with them or even leapfrog past them.”