As the first week for the occupy movement in Canada came to a close it would be unfortunate if we simply disregarded their efforts and causes as pointless. Although the message may be disjointed at times, the issues they are raising are not. They are critically important to the very health of our nation and bringing them to the forefront is the first step on the long road to a cure.
The Conference Board of Canada recently pointed out that the gap between the rich and the rest is growing ever wider, with that gap in Canada increasing at a faster pace than in the United States. The top-earning 1 per cent of Canadians almost doubled their share of national income, from 7.7 per cent to 13.8 per cent, over the past three decade. The other groups - the middle and low income groups - have incomes that have stagnated or fallen. This has led to 3.8% of Canadian households controlling 67% of the total wealth.
We can see this growing divide playing itself out in our urban areas as well. A report by University of Toronto professor David Hulchanski found that Toronto is now made up of 3 cities, not one. One zone of the city is tremendously wealthy and prosperous. Conversely, there is a huge zone of concentrated disadvantage and poverty. The middle class’s share of the city has decreased from 66 per cent in 1970 to 29 per cent in 2005, while low income neighbourhoods grew from 19% to 53%. Toronto is not alone as other cities across Canada feel the same pressures.
So the question is, why - until now - have Canadians not raised the alarm bells? For many, we have been led to believe that we are doing much better economically than the rest of world. Regrettably, that is simply not the case. As Dan Gardner, from Post Media recently pointed out, using data from the OECD's May economic update, 23 OECD countries had GDP performance equal to or better than Canada's in 2008, 2009, or both, and 19 OECD countries whose 2011 deficits are smaller than Canada’s. He concluded, “That doesn't make Canada look like the economic envy of the world, does it?”
This not so rosy economic picture has led to 1.4 million people unemployed with youth unemployment at 14%. We also have an estimated 3.4 million people living in poverty with approximately 800, 000 of those being children.
But why does this matter? What are the implications of an increasingly unequal society? The work of British researchers Richard Wilkinson and Kate Pickett is instructive. They show that less equal societies almost always have more crime, more disease, more mental health problems, as well as less social cohesion. That means more spending on health care, policing and incarceration.
Also, a lack of real income growth and falling interest rates has led to more borrowing and debt by Canadians. If the economy does fall into another recession we could see an increase in personal bankruptcies and foreclosures.
Business leaders around the world have also taken note. This year’s World Economic Forum in Davos, a major conference for the world’s political and business elite, named rising income inequality as the biggest challenge now facing the world economy.
So let’s not degrade the people that have decided to take to the streets, to their tents, to make their voices heard. Let’s listen and understand and deal seriously with economic inequality.
Appeared in the Huffington Post on October 26, 2011