thomas:
This is a long article. It is worth reading. The first part is filled with
stats, facts and figures, it is the least important. The second part is
revolutionary. It asks us to change. It asks us to accept different
principles for living, for economic decisions, for self development other
than more goods - it is inspiring. I'm going to read some of her books -
Thanks Colin. I am taking the liberty of reposting this to two other lists
where parts of these ideas are being discussed
Respectfully,
Thomas Lunde
>GROWING GAP
>>From Colin Stark
>
>The following report is a "promo" for the latest 140pp Report by
>Armine
>Yalnizyan, a Toronto Economist whom I saw on CBC "Counterspin" last
>week?
>
>I love her stuff. The CENTRE FOR SOCIAL JUSTICE sent me this promo,
>which
>is in line with the 3 books of hers which I picked up at the library
>
>Colin
>*****************
>>THE GROWING GAP REPORT
>>by Armine Yalnizyan
>>
>>
>>SUMMARY
>>
>>Look around the world, and you will see example after example of
>nations
>>conducting a risky social experiment of "letting the market rule."
>>However, not all societies have succumbed to these pressures - some
>resist
>>having market principles determine their quality of life.
>>
>>This document examines the way "letting the market rule" is
>destabilizing
>>Canadian society.
>>
>>IT'S ABOUT VALUE
>>
>>The starkest inequalities arise between corporate executives, who are
>>granting themselves exorbitant pay increases, and their workers, who
>face
>>the threat of wage rollbacks and job insecurity.
>>
>>· The top 10 CEOs in Canada each brought home more than $10 million
>last
>year.
>>· On average, the top 100 CEOs saw a 56% increase in compensation
>last year.
>>· Wages are not keeping up with inflation. Many people have had
>their pay
>>frozen during the 1990s, even unionized workers. Federal public
>servants
>>have had one pay increase in the 1990s (3% in 1993)
>>· People who work in unionized environments (such as those packing
>meat and
>>making socks) are being pressured to take wage roll backs and lose
>hours of
>>work. In the unorganized environment, workers are less able to
>resist
>>making such concessions.
>>· Welfare rates, welfare eligibility and/or shelter allowances have
>been
>>reduced in almost every province since 1995.
>>
>>Among executives in Canada, Robert Gratton (of Power Financial
>Corporation)
>>received the highest compensation (salary, bonuses, other
>compensation, and
>>realized stock options), bringing home $27.4 million in 1997. His
>stock
>>options, the "long-term incentive" his company provided him so he
>could do
>>the best possible job, were cashed in at $23.5 million. His salary
>alone
>>was pegged at $1,758,000. It would take 47 years for the average
>person to
>>make that much, based on the current average annual earnings of a
>>full-time, full-year worker.
>>
>>We are super-valuing a few, devaluing the many.
Thomas:
This is the enemy!
>>
>> WHAT THE MARKETS GAVE US: INDIVIDUAL OUTCOMES
>>
>>Polarization of earnings among Canadians is on the rise, especially
>among
>>men. Men under the age of 35 have seen a remarkable, perhaps
>>unprecedented, erosion in what their work is worth compared to older
>age
>>groups, and compared to what "under 35ers" were worth in 1980. Male
>>workers under the age of 25 have seen the greatest decline.
>>
>>While about two-thirds of the employed labour force worked a
>full-time
>>35-40 hour a week job a generation ago, now only half the workers
>have such
>>jobs. About one in five jobs are part-time (double the number from
>twenty
>>years ago) and, in any given week of the year, about one in five
>people are
>>working overtime, paid and unpaid. The fastest growing segments of
>the
>>labour market are "casualized" jobs - temporary, contract, irregular
>-
>>which account for about 15% of the stock of jobs. Self-employment
>>accounted for half of all the new jobs created so far this decade.
>>
>>Time and money have both reinforced the trend towards a growing gap
>among
>>men in what they can earn. That trend is much softer among women,
>because
>>they are putting more time into the labour market than in the past,
>because
>>they have increased their rate of higher learning, and because of the
>>implementation of pay equity and employment equity statutes since
>1980.
>>Still the generalized phenomenon holds: "prime-age" female workers
>doing
>>better than their younger counterparts.
>>
>>There is an emerging fault line between those under and those over
>the age
>>of 35.
Thomas:
This fault line has been the basis for revolution before and could very well
be again. Look at Indonesia, a year ago Suharto reigned supreme. Who
toppled him, the students.
>>
>>WHAT THE MARKETS GAVE US: FAMILY OUTCOMES
>>
>>85% of Canadians live in some form of family, half of these are
>raising the
>>next generation. This section looks at what has been happening to
>the
>>basic building blocks of society, families with children under the
>age of
>18.
>>
>>The Rich Are Richer: In 1973, the richest 10% of families with
>children
>>under 18 made 21 times more than the poorest 10% of Canadian
>families. In
>>1996, the richest 10% of families made 314 times more than the
>poorest 10%
>>of Canadian families.
>>
>>Shrinking Middle Class: In 1973, 60% of families with children under
>18
>>earned between $24,500 and $65,000 (in 1996 dollars). By 1996, that
>middle
>>class shrunk: only 44% of families with dependent children made
>between
>>$24,500
>>and $65,000.
>>
>>Most of that change happened in the very middle. Those earning the
>>equivalent of between $37,600 and $56,000 in 1973 accounted for 40%
>of the
>>population. A generation later, only 27% of the population found
>>themselves in the middle.
>>
>>Women And Work: Families are increasingly having to rely on more
>than one
>>income to get by. Two-thirds of mothers with children under three
>are in
>>the labour force, compared to one third a generation ago. This
>reflects
>>the overall trend among families: the dual earner family is now the
>norm
>>in Canadian society. This trend is also happening in other
>countries too,
>>but here most families are juggling two full-time jobs, while in
>other
>>countries they are more likely to have a mix of full- and part-time
>work.
>>
>>Stable family incomes? The chief way Canadians have stabilized their
>>family incomes has been to increase the hours of paid work provided
>by the
>>family unit. But we may be approaching a "saturation point", where
>- among
>>those who are getting the jobs - there simply aren't more hours to be
>>worked. This household strategy for offsetting market forces may
>have run its course.
Thomas:
This is the fault line. Not only are families burnt out but the strategy
can no longer work. The question remains unanswered at the present time, do
we acquiese to having less and less of the pie or do we change the
distribution of wealth?
>>
>>Increasingly, even a second income isn't enough. Real
>(inflation-adjusted)
>>average family market incomes are lower today than they were in 1981.
>>Sixty percent of families with children were earning less than in
>1981.
>>
>>WHAT OUR GOVERNMENTS GAVE US
>>
>>Given the kind of disparities the market has generated, Canadian
>society
>>has experienced a remarkable stability in the distribution of income
>until
>>only two or three years ago. The reason? Government programs of
>income
>>support and government provisions of public, or common, goods.
>>
>>In 1989, the average market income of families in the bottom 10% of
>society
>>was around $4,000. By 1996, the average had fallen to less than $500
>a
>>year. That is because the number of families without any earners
>has grown
>>dramatically over the last generation. In 1973 about two-thirds of
>the
>>poorest families had at least some earnings. Today three-quarters
>of the
>>poorest families have no earner. Without government programs, those
>at the
>>bottom would have experienced a free-fall into destitution.
Thomas:
Homelessness is destitution. It is growing all across Canada while
governments dither.
>>
>>Between 1981 and 1996 the earned incomes of the poorest 20% of
>households
>>with dependent children was cut in half, from $12,000 to $6,000.
>>Government help (unemployment insurance, social assistance and other
>>programs) brought the poor family's after tax income up to $16,600.
>This
>>is lower than it was in 1980 ($17,700 in 1996 dollars).
>>
>>The role of the transfer system (income supports from government)
>and tax
>>system has provided remarkable stability in the distribution of
>incomes
>>over the last generation. This stability is deteriorating
>dramatically and
>>rapidly: since 1994, the ratio of after-tax income between richest
>and
>>poorest families has escalated to the highest point since 1973. The
>>fastest change has been in the last year for which we have data,
>between
>>1995 and 1996.
>>
>>Recent government decisions to cut back transfer payments and scale
>back
>>the provision of public goods have hit the poorest families - and our
>>country's youth - hardest.
Thomas:
The youth are immortal, they will risk their lives as soldiers or
revolutionaries - all it takes is a spark, a leader, an ideal. It could
flare up in weeks or months.
>>
>>Governments have told us we can "grow our way to equity," that the
>market
>>will produce results that make everyone better off, but it's becoming
>>evident that inequality is growing in Canada despite economic growth.
Thomas:
Here we come to the difference between reality and the theories of the
economists.
>>However, this is not happening everywhere in the world. Growing
>inequality
>>is not a "natural" by-product of the forces of globalization. It is
>a
>>by-product of choices that are made: what will be produced in an
>economy,
>>through what means; how will this influence the distribution of
>resources
>>(including money incomes); how much will these outcomes be mediated?
>>
>>Governments clearly have a role to play in society, by both setting
>the
>>rules by which the market plays and by mediating the fall-outs from
>the
>>market. Though there will always be a gap between rich and poor, we
>can
>>choose how large we let it get, and how fast we let it grow. We can
>choose
>>what kind of a world we create.
Thomas:
And this is the crux. The disparity is too large. We can make choices to
change this without hardship to the rich and of immense benefit to society
as a whole. We just have to give up these crazy ideas of the "invisible
hand" and get back to the art of governance in which human affairs are
ordered to benefit all humans, not just the lucky, the talented, the
inheritors of power and privilege.
>>
>>* * * * *
>>
>>INTRODUCTION
>>
>>The report in your hands tells the story of how income disparities
>among
>>Canadians, as individuals and as families, have grown over the last
>>generation. To do this it relies primarily on the things that can be
>>measured, making it a report about the evolution of material
>well-being,
>>the economics of households and the economics of society.
Thomas:
And this is the big error, plain and simple. To gather information to make
"rational decisions" we have to rely primarily on things that can be
measured. This is not a complete picture, therefore despite our most clever
efforts at tinkering, changing, planning, etc we are working from a flawed
model. Number is only number, it is not human, it is just a tool for humans
to use but remember, we were given two systems, analog and digital and
number is the god of the digital system. Humanness is the god of the analog
system. There is a place for feeling, awe, humility, respect, integrity,
fairness and a host of other attributes that we cannot quantify with
number - that are uniquely human. We must work to enlarge the system to
include us, it is more than the economic balance sheet.
>>
>>This introduction provides a critical framework for understanding the
>>issues that will be discussed, linking them to more fundamental human
>>questions. It offers a perspective that is all too often divorced
>from
>>discussions of economics.
>>
>>The report tells the story of what kind of an economy we are making.
>The
>>introduction helps set the stage: the transformation our society is
>>undergoing is not just about economics, it is about value - who we
>value,
>>and what we value.
Thomas:
The author recognizes this by the statement, "it is about value - who we
value, and what we value.
This offers the reader a way of assessing the
>story as
>>it unfolds. What is wrong with the world we are creating?
>>
>>We are told that there is not enough employment with adequate pay
>because
>>of the sluggish performance of the economy. We are told that we do
>not
>>have enough resources to alleviate poverty because the economy is not
>>growing fast enough. The solution that has successfully captured the
>>imagination of our elected leaders around the world for the past
>>twenty-five years has been to place capital accumulation at the top
>of the
>>agenda in order to speed up economic growth.
>>
>>According to the logic of the "trickle-down" policies which have
>been so
>>widely adopted, if you remove restrictions on the already-wealthy so
>that
>>they can accumulate more wealth and make more investments, the
>wealth will
>>"trickle-down" to those at the bottom. This is supposed to mean more
>people
>>will be working, and so everybody will be better off.
Thomas:
Simply put, this model is so brefret of common sense as was Hitler's ideas
of the master race. History will prove it so.
>>
>>Clearly all investments do not create jobs. Some investments cause
>people
>>to lose jobs, other investments mean jobs get moved from one country
>to
>>another. Nor can we simply assume just because people are working
>that they
>>are better off. Jesse Jackson has reminded us that there was full
>>employment under slavery. In the U.S. today, more people are
>working and
>>more people are in poverty. As someone once put it, the reason
>>trickle-down policies do not work is because of the sponges at the
>top.
>>
>>What is the relationship between equity and economic growth?
Thomas:
The elegant question is one which goes to he heart of the matter. Equity
fairness, the application of the principles of justice to correct or
supplement the law) or the analog - humanness side of the equation has not
been considered in the digital - numeric side of rational thought. This is
were the inquiry should be.
If your
>>society chooses to close the gap between the rich and the poor, will
>your
>>economy grow more slowly?
>>
>>The answer is, no. Some nations decide to invest in reducing income
>>disparities and some nations permit those disparities to grow.
>Economies
>>operating in completely different types of society can grow at the
>same
>>rate. Clearly, rising inequities cannot be sold as the unfortunate
>price
>>that must be paid for economic growth.
>>Does growth necessarily lead to more equity? The answer again seems
>to be:
>>no. Countries with high rates of economic growth can still permit the
>>distribution of incomes to get worse. But the evidence shows this
>is a
>>temporary hit, a short-term political strategy. Using international
>data
>>that stretch over generations, it becomes clear that societies that
>enjoy
>>higher income equality accumulate more capital (both in terms of
>know-how
>>and money), pass that on to the next generation and therefore have
>higher
>>and more prolonged rates of economic growth.
>>
>>So, the most likely causal relationship between equity and
>efficiency (read
>>growth) seems to be the one least likely to be flagged. Equity
>appears to
>>be a precondition to sustained economic growth.
Thomas:
Why, if the causal relationship favours equity improvements is it the one
least likely to be flagged? Because those that are benefiting from the
status quo feel they will be penalized. Completely ignoring the observation
that their wealth and influence are a direct result of penalizing others.
>>
>>But even if this emerges as the new conventional wisdom, what will
>our
>>elites do about it? That part of the story is about politics, not
>>economics. The nature of class politics in a given nation and the
>>political will of its leaders are what define the steps that will be
>taken.
>> That part of the story is about the distribution, not the level, of
>>economic growth.
>>
>>There is an obvious connection between economic prosperity and
>society's
>>well-being. But growth in the Gross Domestic Product (GDP) is not
>the only
>>relevant indicator. Other benchmarks, for example indicators of
>health,
>>also reinforce the message that it is not so much the level of
>prosperity
>>that is important as how that prosperity is spread among members of
>society.
>>
>>Conventional wisdom would have it that the greater a nation's
>wealth, the
>>better the health of its citizens. Indeed, there are increases in
>life
>>expectancies, birth weights, and immunity to disease and illness as
>the
>>material standard of living increases. But there is an upper
>threshold,
>>reached long ago by all developed nations. After that point,
>evidence
>>shows that the degree of economic equality is a critical factor in
>the
>>health of a society.
>>
>>The distribution of income is the best indicator of the health of
>everyone,
>>not just the poor, in society. Citizens of countries with lower per
>capita
>>income than, say, the United States, but better distribution of that
>income
>>have longer, more healthy lives, no matter in what part of their
>nation's
>>income spectrum they find themselves. You do not have to be a wealthy
>>nation to improve the lives of your citizens. You have to be fair
>with the
>>resources you have.
Thomas:
It seems so simple and self evident. Why doesn't change to redistribution,
no matter what it's political and economic form may be happen? This
information - which could readily be arrived at by reflection, if we the
consuming public had any time to reflect, is suppressed. We are distracted
by things, by news media which is entertainment, by the environmental noise
we live in, by the breakdown in communities and families that use to discuss
these issues at the dinner table. We are like the audience before a clever
magician, who weaves his spell of words and props to deceive our senses and
convince us that he is defying the laws of the Universe - it is all
trickery. And yet our senses - our day to day life, allows most of us to
just pay our bills, to just get a little of what we think will make us
happy, to accept our fate as if somehow the fault was ours, not an unfair
system. Like the gambling house, the house cannot lose, it has an edge, in
the real world that edge is power and money.
>>
>>It may seem that it is easier to reduce inequalities if the whole
>system is
>>growing. But the whole system has been growing, and inequalities are
>>getting worse. Talk about providing day-care or health-care for
>everyone
>>who needs it, or assuring adequate shelter, nutrition and income for
>the
>>economically vulnerable, and the response is "maybe, when we have
>balanced
>>our budget, when GDP has grown by 2%, 3%, 5%, when world trade grows
>more
>>quickly." More, quicker, faster. The goal-posts of the game keep
>getting
>>moved further away.
>>
>>Can we grow our way to equity? The answer seems to be no.
Thomas:
Equity is a principle by which we can make choices. When that principle is
no evoked at the time of making choices, then there can be no equity results
except those that occur accidentally.
>>
>>The "required" rate of economic growth is constantly escalating. In
>>today's world we cannot afford or sustain such rates of growth, both
>for
>>economic and ecological reasons. The depletion of natural resources
>and the
>>declining integrity of the environment are not trivial concerns. The
>>east-coast cod collapse is a vivid illustration of how both
>ecosystems and
>>communities suffer when calls for sustainability are repeatedly
>ignored in
>>favour of (short-term) economic gain.
>>
>>Given the current fragility of the global system of capitalism,
>there has
>>never been a more difficult time to raise these issues. Yet the
>>distribution, and redistribution, of the world's economic resources
>is
>>precisely what we need to address, not just economic growth.
Thomas:
The neo-con philosophy, lower taxes - lower services - disregard the
environment - reward the rich and to hell with the poor and on and on will
collapse when forced to answer the questions posed by the above arguments.
Their strength has been to not answer but to blame the questioner for even
asking, putting the left on the defensive of explanation rather than the
aggressive of asking for an accounting.
>Economic
>>instability is gripping the lives of more and more people over time.
>The
>>heart of the problem is how we allocate incomes, capital and debt,
>within
>>nations and between nations.
>>
>>What are the chances that the political arena will seize this issue?
>Maybe
>>more importantly, how will the issue of growing inequality be framed?
>>
>>Throughout much of the post-war period the general orientation of the
>>developed world was that the role of government was to guide the
>>development and distribution of economic growth, thereby helping
>translate
>>profit to investment. On the way to this goal, governments acted as
>>brokers between citizens and corporations to keep the machine
>humming.
>>Today, a new orthodoxy is emerging, one which says the best that
>>governments can offer business and citizens alike is to get out of
>the way
>>and let the market rule.
>>
>>These profoundly different approaches to the role of government have
>one
>>very important assumption in common. They assume that economic
>growth is
>>both the objective and the solution for the project of living
>together, in
>>a nation or in the world. We are bombarded daily with the notion that
>>making more is the goal, that having more is the answer.
>>
>>In the rush to produce more and consume more it is easy to overlook
>the
>>basics. What is the meaning of our lives, as individuals and as the
>human
>>species? Ask these questions and you are most likely to set off a
>>philosophical discussion, not a discussion about economics. So why,
>then,
>>do we unconsciously accept that our world should be primarily
>defined as an
>>economic enterprise?
Thomas:
People don't I am convinced. People are human with human concerns but we
are distracted, overworked, threatened, and fed false information. We are
led by fools in an unscrupulous system - a system that has incredible
rewards for those who drop their humanness toward their fellow human beings
for the sake of private gain and comfort. No doubt about it, it is
seductive.
>>
>>Clearly there are other principles by which we govern our lives.
>Values
>>such as freedom of choice (to be who I want to be) and equality of
>>opportunity (to get a chance to be who I want to be) fundamentally
>underlie
>>our way of thinking in this society. But the way we have come to
>define
>>these values has separated the individual from the collective.
Thomas:
I had to read the above statements several times before I got it. The
principles are right - says the author - it is the way we define these
principles has had the effect of separating the individual from the
collective or the common humanity of humanity.
>>Consequently, when we ask ourselves questions like - what are we
>doing with
>>our lives? what are we here for? - they get posed as personal, not
>social
>>dilemmas.
>>
>>Consider this. The Old English root of the word "free" is "freo", a
>word
>>that brings out the communal basis of liberty very clearly. It
>means to be
>>dear, to be loved. No man or woman or child is really free in a
>society
>>that does not care whether he or she lives or dies, is underpaid or
>>underemployed, ill housed or poorly nourished. In such a world the
>notion
>>of equality of opportunity is a joke.
Thomas:
To have equality, you have to follow the principle of "the right to life" of
all, not just the white or the talented or the lucky or the privileged.
>>
>>Our world is rife with insecurity. As competition gets more
>intense, more
>>people are economically insecure. The ground becomes fertile for
>racist,
>>sexist and other forms of discrimination. This erodes people's
>recognition
>>of each other as essentially equal in the eyes of creation. It
>dehumanizes
>>people. The legacy of growing inequality is the crumbling of social
>>solidarity, the sense that we share something in common.
>>
>>The more that a society is unequal, the greater is the number of
>people who
>>are prevented from developing themselves as full human beings. This
>dwarfs
>>the potential of society as a whole. As long as inequalities are
>growing,
>>we are getting away from, not closer to, being the best we can be.
>How do
>>we reverse gears?
>>
>>We tend to gravitate towards the option of increasing economic
>growth -
>>even though it does not necessarily guarantee more equity - because
>in the
>>minds of most people it is synonymous with the ability to consume
>more
>>things. This, in and of itself, is considered desirable and valued.
>The
>>term economic growth is also used to conjure up notions of greater
>freedom
>>and greater equality of opportunity. This report documents how this
>>generation has not seen much evidence of these more lofty goals.
>>
>>Alternatives to economic growth are less frequently discussed,
>making them
>>harder to communicate. It is like learning a new skill or a new
>language.
>>This is because alternative approaches are based on valuing things
>that are
>>not necessarily money-based. These are values such as basic human
>rights,
>>human dignity, the stewardship of our natural resources (including
>our
>>children), the importance of time, rest and restoration. These
>approaches,
>>which are unlikely to even refer to economic growth, threaten the
>status
>>quo. And the status quo says: "Don't worry, be happy. Inequality
>is not
>>yet a real problem in this land of plenty."
>>
>>Make no mistake, inequality promotes itself. Those at the top -
>most of
>>whom feel they don't have enough yet - have control over the ideas.
>Their
>>ideas for change will hasten, not reverse, the downward spiral of
>more
>>poverty for more people so that a few may gain. Their solutions
>focus on
>>exporting the problem somewhere else. Get the poor off social
>assistance
>>rolls, encourage unemployed youth to go back to school, take the
>jobs to
>>where people ask for less to do the work.
>>
>>The truly sustainable solutions beg for an economics of sufficiency,
>not
>>just for some but for all on this planet. Such an approach itself
>begs for
>>a rhythm of life that finds more balance. More balance between
>creation
>>and rest, between paid work and unpaid work, between our lives as
>>individuals and our lives with others. Such an approach has to put
>the
>>premium on redistribution of time and money, admittedly a difficult
>and
>>painful political choice in a time of slow or no growth.
>>
>>We are at the end of an era of rising expectations for most
>Canadians. Our
>>governments have abandoned the post-war social contract and embarked
>on a
>>risky experiment that leaves our destiny in the hands of the market.
>>However, all too few benefit from this choice.
>>
>>Canadians were promised that less government and greater reliance on
>market
>>forces would unleash unparalleled economic expansion where all would
>>benefit - a rising tide raises all boats. Some are riding high, but
>many
>>more see at best only a gentle swell, at worst nothing but a
>stranded boat
>>on a muddy beach.
>>
>>That this growing gap between the rich and poor does not generate
>>widespread concern is a concern in itself. Are we prepared to accept
>>growing child poverty, a generation of young people who believe they
>have
>>no stake in either the economic or social fabric of our nation, and
>>increasing numbers of workers whose labour is devalued? If we are to
>>remain the "best country in the world" by the criteria of the United
>>Nations, we should not be rolling the dice with our own destiny.
>>
>>This report documents how the growing gap between rich and poor has
>emerged
>>in Canada, why so many people have accepted it as inevitable, and
>what
>>options we have to help close the gap.
>>
>>* * * * *
>
>>CENTRE FOR SOCIAL JUSTICE
>>836 Bloor St. West
>>Toronto, ON
>>M6G 1M2
>>tel: 416-516-0009
>>fax: 416-531-3197
>>email: [EMAIL PROTECTED]
>>website: www.socialjustice.org
>
>******************
>>
>>Thank you for your inquiry about the Growing Gap Report. We are
>taking
>>orders for the report which is over 140 pages. Copies are $10 each.
>This
>>includes handling and postage costs.
>>
>>If you would like a copy, please email us with your name, address
>and phone
>>number, and the number of copies that you would like.
>
>>Our website <<www.socialjustice.org>> has the summary and
>introduction of
>>the report, as well as factsheets based on the report.
>
