When the Organization for Economic Cooperation and Development (OECD) issues a report entitled Power From the People, it’s time for governments to sit up and take heed.
“Inequality has risen in many advanced economies since the 1980s largely because of the concentration of incomes at the top of the distribution, “OECD economists Florence Jaumotte and Carolina Osorio Buitron state. “Measures of inequality have increased substantially, but the most striking development is the large and continuous increase in the share of total income garnered by the 10 per cent of the population that earns the most,” they write in an OECD Finance and Development paper released in March.
Adding to the problem, leading American economist Joseph Stiglitz warns that “A rising concentration of income at the top of the distribution can reduce a population’s welfare if it allows top earners to manipulate the economic and political system in their favour.”
Weakening unions reduces the bargaining power of workers relative to capital owners and top earners, the OECD paper continues. “…(W)e find strong evidence that lower unionization is associated with an increase in top income shares in advanced economies during the period from 1980 to 2010.”
That period, of course, was the heyday of the Margaret Thatcher/Ronald Reagan Neo-Conservative “root hog or die” era when the very noun “government” was a dirty word in leading government circles, especially in the Anglo-Saxon world.
Even now, the neo-conservative mantra still dominates the economic landscape of most western countries and has one of its most stalwart proponents in the Conservative government of Stephen Harper. Despite the growing piles of economic and human wreckage now visible all around us, the wealthy get ever-more wealthy and poor get ever-more poor.
It is not for the neo-cons to worry that, for example, de-unionization is associated with less wealth and less redistribution of income. Nor does it disturb them that their constant campaign for ever more reductions in minimum wages and ever less power for workers increases inequality exponentially. None of these things touch them. At least not yet.
CBICWorldMarkets economist Benjamin Tal warned in a paper released in March that “our measure of employment quality has been on a clear downward trajectory over the past 25 years…. While the pace… has slowed in recent years, the level of quality, as measured by our index, is currently at a record low – 15 per cent below the rate seen in the early 1990s and 10 per cent below the level seen in the early 2000s.”
Tal goes on to report that the distribution of part-time/full-time employment since the 1980s shows a clear trend: “Since the 1980s, the number of part-time jobs has risen much faster than the number of full-time jobs. The damage caused to full-time employment during each recession was, in many ways, permanent…full-time job creation was unable to accelerate fast enough during the recovery to recover lost ground.” Tal also had another grim statistic: “During the year ending January, 2015, the number of self-employed workers rose four times faster than the number of paid employees. And since the late 1980s, the number of part-time jobs has risen much faster than the number of full-time.
“The damage caused to full-time employment during each recession was, in many ways, permanent,” he continued. “Over the past decade, wages in high-paying sectors rose almost twice as fast as wages in low-paying sectors …In other words, the fastest growing segment of the labour market is also the one with the weakest bargaining power.”
Winnipeg-based Canadian Centre for Policy Alternatives economist Lynne Fernandez asks the top 10 per cent of Canadians to ponder this point: “The wealthy won’t even acknowledge they, like everyone else, have to rely on the state. It goes from the public to the private. Nobody succeeds in the private sector without tremendous supports from the public in all kinds of ways, be it infrastructure, education, public services, education.
But now, constant tax reduction s for corporations and the wealthy have depleted government revenues and jeopardized those services, Fernandez says.
“They’ve turned everything on its head and made it that it’s the private that supports the public rather than the public that supports the private. And they’ve done an amazing job of convincing people that that’s the case.”
The whole focus of government is now on the wealthiest tier of citizens, the people with the six or seven figures. “It’s truly chilling,” she continues. “There’s no mention of what’s happening to people earning $30,000 to $50,000. People in the top two quintiles are all that matters.”
Fernandez has a point. Just look to the run-up to the October election. The Conservatives and Liberals are fixated on catering almost entirely to high income earners with all kinds of tax cuts, giveaways and programs for those who could readily afford to pay their own way in most cases.
Meanwhile, the labour market is languishing and no government or party is paying attention. “What’s happening in the labour market, the growth in low income wages,” Fernandez asks. “There’s all kinds of deterioration: declines in union density, globalization, the fracturing of the labour market, the deliberate attempt by governments to rely on foreign workers rather than allowing hard-working people to immigrate and contribute fully to Canadian society.
“If you bring in desperate foreign workers then you can undermine wages and benefits you pay to Canadians,” Fernandez continues. “There are so many precariously employed people out there. Globalization started that. Globalization, changes in technology and declines in wages and union density.”
Frances Russell was born in Winnipeg and graduated from the University of Manitoba with a Bachelor of Arts degree in history and political science. A journalist since 1962, she has covered and commented on politics in Manitoba, Ontario, B.C. and Ottawa, working for The Winnipeg Tribune, United Press International, The Globe and Mail, The Vancouver Sun and The Winnipeg Free Press as well as freelanced for The Toronto Star, The Edmonton Journal, CBC Radio and TV and Time Magazine.
She is the author of two award-winning books on Manitoba history: Mistehay Sakahegan – The Great Lake: The Beauty and the Treachery of Lake Winnipeg and The Canadian Crucible – Manitoba’s Role in Canada’s Great Divide. Both won the Manitoba Historical Society Award for popular history.
She is married with one son and two grandsons and lives in Winnipeg.