Income inequality: a top global risk
January 19, 2012
Inequality of income is one of the hot button issues of our time. 2011 saw the rise of the Occupy movement, built on lingering disquiet about bank bail-outs and stubbornly high levels of unemployment, particularly amongst younger people. In the US, unemployment amongst the under 25s stands at around 18%, a little higher than the OECD average of 17%. In the UK the rate is over 22%.
It comes as no surprise that the World Economic Forum has just named severe income inequality as a top global risk, alongside such things as severe water shortages and cyber attacks.
As in other OECD countries, inequality in Canada has increased substantially since the mid 1980s, though we remain near the middle of the pack in terms of overall measures of inequality. Our youth unemployment rate compares favorably with the OECD average at 14.1%, though this is still nearly double the overall unemployment rate. We do, though stand out when it comes to income concentration amongst the very highest earners: we are number three in the OECD (after US and UK) in terms of pre-tax income concentration of the top 1% of earners.
Although the Occupy movement was evident throughout Canada, public concern about inequality does not run as high here as in some other countries. In particular there is not such public vitriol here about `bankers’ bonuses’, probably because of the very limited bailout of banks during the crisis.
Rather than resting on our laurels, it would seem both prudent and socially responsible to use this breathing space to our advantage. How can we better address inequality and head off looming problems that might otherwise result (for example increased social unrest and economic impacts such as poor health outcomes, reduced productivity, withdrawal of support for free-market economies and trade, etc.)?
This is unlikely to be a question of simply beefing up taxes and transfers (though that might be part of the approach). In its recent report, the OECD investigates the impact of the various possible causes of inequality (globalization, the technology revolution, changes in household structure, changes in employment patterns, etc.). It finds that inequality is not inevitable, that it is amenable to policy solutions, and proposes a three-pronged policy response:
- More intensive human capital investment
- Inclusive employment promotion
- Well-designed tax/transfer policies
Our aim at Canada 2020 is to strengthen and deepen the discussion about income inequality and polarization in Canada. What are the causes and effects? Are these common to other countries or unique to Canada? And which policy responses are likely to bear the most fruit in this country, taking account of the current economic climate?
Our focus is on the role of the federal government, though action in this area is likely to take place in tandem with the provinces.
Our panel debate on Thursday 19th January will tackle these issues and continue the debate that begun with the publication of our book: The Canada We Want in 2020. We hope you can join us in person or on line (click here for livestream). Your input is always welcome.
April 28, 2014
Research: Are we ready for universal childcare in Canada?
Is Canada ready for a universal childcare system? If so, what does ‘universal’ look like? Canada’s current childcare system is a fragmented and patchwork landscape that has been recognized internationally as a serious human development concern. Set against the backdrop of increased media and policy attention to social mobility, Canada 2020′s Analytical Commentary No. 6 focuses on the relationship between income inequality, equality of opportunity and universal childcare.
Summer Reading: Reports on equality, mobility, education and more
With Parliament Hill adjourned for the summer, Ottawa is a much quieter place, giving us time to catch up on a number of fantastic reports that have been published by organizations in our network. We have scoured the web and come back with six must-read reports to add to your summer reading list. Featuring work from the Brookings Institution, the Center for American Progress, the International Institute for Sustainable Development and more.
Event Summary: Panelists get to grips with the Canadian dream
Over 350 people came out to the Château Laurier Hotel on February 26 where they were treated to a lively, progressive and sometimes contentious debate about the various options for governmental action to help ensure continued economic mobility in Canada.
Opinion: Productivity and pay – why Canadians are (somewhat) better off
Comparing ourselves with the United States is a national pastime in Canada. Sometimes the comparison makes us look good (health care, public education). Sometimes it makes us look bad (consumer prices, productivity). Sometimes it reveals an altogether more nuanced story. Sadly, we often miss the nuance.
Opinion: Inequality – defining the defining issue of our time
Diana Carney analyses the facts, figures and sentiment behind our growing concern with inequality. The story is not as simple as one might think.