I posted something on the American situation re this a few weeks ago. Here's
some of what I said:
I've been reading "Winner-Take-All Politics" by Jacob Hacker
and Paul Pierson, two political scientists. Hacker and Pierson examine the
period from the 1970s to the present and find a very large shift wealth from
the bottom and middle classes of American society to the uppermost classes.
While all classes gained some income between 1979 and 2006, the incomes of the
top one percent of all recipients increased by 256%! By 2007, the richest one
percent received some 23% of all of the income earned or accruing to Americans.
Along with this upward redistribution, the power of unions
diminished, unemployment rose and the political clout of the middle class faded
away.
We Canadians like to look upon our neighbors to the south
with a little disdain. Hey, we're not like that, we tell ourselves. Well,
perhaps we are, at least a little. Hacker and Pierson have a chart that shows
that Canada's top income recipients were not very far behind their US
counterparts between 1973 and 2000. During that period, the share of income
held by the US top one percent rose from about 7% to about 16%, whereas in
Canada it rose from over 8% to over 12%.
I'd have to take another look at Hacker and Pierson, but what they were arguing
is that the ultra-rich have spent a lot of time rigging the p0litical process
to suit their purposes. Increasingly, members of Congress have been working in
their interests and not in those of the population as a whole. It matters
little to them that the country as a whole is on a downward economic slope.
What matters is that their power and wealth increases.
Things are not quite like that in Canada yet, but we may be heading in the same
general direction. It seems that wealth and power have become the game, and
not the common good.
Ed
----- Original Message -----
From: Michael Gurstein
To: [email protected]
Sent: Wednesday, December 01, 2010 5:12 PM
Subject: RE: [Ottawadissenters] Ultra-rich getting richer while middle class
stagnates
I guess what I don't understand here is exactly why this has been happening...
Is it:
a. a consequence of the new (open) trade arrangements
b. an indirect effect of the digitized workplace/logistical infrastructure
c. "subversion" of the political system by the ultra-wealthy to change
the tax (?)/regulatory (?) structure to suit themselves
d. a bi-product of the "class war" (a la Warren Buffett) between the
working and middle/lower middle class vs. the upper middle and upper class
(being won by the latter...
e. other?
Second question: why has this to date caused little or no reaction:
a. the ownership of the media by the ultra-rich
b. sufficient spoils all round as a result of the post-war long peace
c. false consciousness by the non-ultra rich whose life style has
improved as a result of increased instensification of labour (women in the work
force etc.
d. other?
M
-----Original Message-----
From: [email protected]
[mailto:[email protected]] On Behalf Of John Verdon
Sent: Wednesday, December 01, 2010 12:40 PM
To: [email protected]
Subject: Re: [Ottawadissenters] Ultra-rich getting richer while middle
class stagnates
Arthur you might enjoy Umair Haque's latest blog post
http://blogs.hbr.org/haque/2010/11/the_irish_banking_crisis_a_par.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness%2Fhaque+%28Umair+Haque+on+HBR.org%29&utm_content=Google+International
On Wed, Dec 1, 2010 at 2:01 PM, Arthur Cordell <[email protected]>
wrote:
Ultra-rich getting richer while middle class stagnates, report says
OTTAWA - Canada has entered a 1920s-like Gilded Age, where the super-rich
consolidate their wealth while the middle class stagnates.
That's the conclusion of a new study based on income-tax forms filed up
until 2007, showing that the richest one per cent of Canadians took home 13.8
per cent of all incomes claimed that year.
The share of total income going to the richest of the rich has risen
steadily since the early 1980s, reversing a long-term trend toward a more equal
distribution of the country's income during the postwar '50s, '60s and '70s,
the study says.
"The higher up the ladder you go, the more colossal this glomming of
wealth becomes," author Armine Yalnizyan, senior economist at the Canadian
Centre for Policy Alternatives, said in an interview.
Her paper, to be released Wednesday, is based on unpublished tax form
data crunched by Mike Veall, an economics professor at McMaster University in
Hamilton.
The numbers show that the richest one per cent quickly gained ground in
Canada between 1925 and 1935. It was the era epitomized by the writings of
Horatio Alger - the days of rags to riches, when millions of poor North
Americans believed they could strike it rich.
"Like the Gilded Age a century ago, Canada is awash in money generated by
an emerging new global economy," Yalnizyan writes. "During both slow and rapid
periods of growth, incomes have increasingly become concentrated in the hands
of the elite few rather than creating greater prosperity for all."
The inequality gap of the '20s and early '30s eventually collapsed and
then switched direction with the Second World War, narrowing and steadily
declining until about 1982. Since then, the super-rich have gradually claimed
larger and larger pieces of the total income pie.
"Most Canadians are inching their way through recovery, trying to hang on
to what they've got," Yalnizyan writes. "But for some Canadians, things have
never been so good."
The higher up the income scale, the more dramatic the gains. For the
richest one per cent, the share of all Canadian incomes almost doubled between
the late 1970s and 2007. For the richest 0.1 per cent of tax files, their total
share almost tripled during those 20 years.
And for the creme-de-la-creme - the richest 0.01 per cent making more
than $640,000 a year - their share of total incomes more than quintupled.
The trends shown in the tax data are undeniable, analysts say. What is in
question, however, is why the trends are so relentless, whether they are cause
for concern, and what the appropriate public-policy response should be.
"It's best data we have on the issue," said Andrew Sharpe, executive
director of the Centre for the Study of Living Standards. "The key issue is,
what's driving this?"
Yalnizyan's study shows that the super-rich are increasingly reliant on
their wages - much like the rest of us. That hasn't always been the case. In
the 1940s, for example, the top income-earners were mainly entrepreneurs who
made it rich directly from the proceeds of their businesses.
In other words, the super-rich in Canada are mainly the top executives of
large companies who are being well compensated by their boards and shareholders.
At the same time, the income tax regime has not kept up with the
super-sized salaries of the ultra-rich, Yalnizyan says, so they're able to
retain more of their earnings.
There's no solid explanation for why executives are being so well paid,
especially when wages for most other sectors of the economy have stagnated.
A similar phenomenon can be seen in Australia, New Zealand, the United
Kingdom, and especially the United States, said Veall at McMaster. But
non-English-speaking countries such as France and Italy don't show the same
inequality gap.
While some researchers believe the super-rich are beneficiaries of
advancing technology in a global economy, the discrepancies between countries
undermine that theory, Veall said. Corporate governance structures in
English-speaking countries may offer a partial explanation, but there too,
there's no reason why the trend would suddenly change in the early 1980s, he
said.
Long-time policy guru Peter Nicholson - who published his own analysis on
an earlier version of the income-tax findings - suspects the numbers speak to a
cultural shift.
"Corporate chieftains have entered the realm that was formally reserved
for sports stars and rock stars," Nicholson said.
In his earlier paper, Nicholson warned of social unrest if the trend
towards increasing inequality were to persist. The trend has indeed persisted,
but Nicholson said any backlash would likely start in the United States, where
the inequality is far more exacerbated than here in Canada.
There, public discontent over large salaries going to bankers who nearly
brought down the global financial system and required taxpayer-funded bailouts
has simmered down somewhat.
More concerning, said Nicholson and other researchers, is that Canadians
have no firm grasp on why the super-rich are increasingly in an untouchable
league of their own.
"At least you have to understand why this is happening. Is it fair, or is
it a good thing?"
Excerpted from Ultra-rich getting richer while middle class stagnates,
report says - Winnipeg Free Press
http://www.winnipegfreepress.com/canada/breakingnews/ultra-rich-getting-richer-while-middle-class-stagnates-report-says-111096344.html
--
John Verdon
4 Ashbury Place
Ottawa, ON
K1M1H3
voice 613-744-4278
searching for the pattern which connects....
knowing the difference that makes a difference...
Sapere Aude - The true is the whole.
Compassion is the natural condition of what one really is.
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