Poverty: ‘The dirty secret nobody talks about’ (Frances Russell)
Winnipeg Free Press Wed Jan 17 2007
‘WE had to take it beyond poverty. We had to give everybody a stake in the issue. We had to show what’s happening to us as a society. We had to get people talking about how disconnected the winners have become from the rest of us. It’s the central economic and social issue of our day.” This is economist Armine Yalnizyan describing the reasons behind the Canadian Centre for Policy Alternatives’ Growing Gap project.
Poverty gets lots of attention but nothing changes. Inequality “is the big, dirty secret nobody talks about, the greatest untold story of our time,” she says. In the U.S., only one newspaper, The New York Times, regularly writes about it.
Yalnizyan and her fellow researchers, Hugh Mackenzie and Trish Hennessy, were determined to shift the focus from poverty to inequality. They hit the Christmas/New Year’s news hiatus with this bombshell, compiled from The Globe and Mail’s annual survey of Canada’s top 100 CEOs for 2005 and Statistics Canada’s measure of average weekly earnings for 2005:
The average Canadian CEO reached the Canadian average earnings of $38,010 by 9:46 a.m. on Jan. 2. He/she attained the average full-time minimum wage earnings of $15,931 at 12:40 p.m. — just after noon — on New Year’s Day.
The lowest-paid of the top CEOs had pocketed the Canadian average annual earnings by 12:39 p.m. on Jan. 4 and minimum wage earnings by 12:39 p.m. on Jan. 2.
Canada’s highest-paid CEO in 2005 would barely have had time for morning coffee on New Year’s Day before matching Canadians’ average earnings for the whole year. His pay passed the Canadian average at 10:04 a.m. on Jan. 1.
By 6 p.m. on Jan. 2, the average of the top 100 CEOs had earned nearly $70,000. The highest-paid CEO had earned more than $570,000.
Or, to put it differently, the average of the top 100 CEOs is paid as much in a year as 238 people working full-year at the average of Canadian wages and salaries. The highest-paid CEO makes as much as a small town — 1,969 people — working at the average of wages and salaries.
The average of the highest-paid CEOs pocketed $9,059,113 in 2005. The incomes of the top 100 ranged from $2,870,118 (number 100) to $74,824,355 (number one.)
The bombshell worked. “We could hardly believe the coverage it received,” Yalnizyan says.
Graphic as these comparisons are, there is much more to the Growing Gap’s findings about one of the richest, and in its self-image, fairest, countries in the world. The CCPA commissioned Environics Research Group to conduct focus groups and a national poll of 2,021 Canadians last summer and fall. Among Environics’ findings:
Sixty-five per cent believe the rewards from Canada’s recent economic boom have gone to the richest Canadians.
Fifty-one per cent say their standard of living has either dropped or stayed the same. * Forty-nine per cent say they are one or two missed paycheques away from being poor.
Seventy-six per cent think the gap between rich and poor has widened.
And 76 per cent agree that a growing gap between rich and poor will lead to more crime, some even predicting civil unrest or civil war if it expands significantly.
Yalnizyan says Canadian society is more unequal today than at any time since the end of the Second World War, the era when “modern” Canada was created by the great, collective nation-building projects of universal pensions, unemployment insurance, hospital insurance, medicare, housing and federal support for post-secondary education. Canadians wanted a strong central government to guarantee they were available everywhere.
At the end of the war, Canada’s top tax bracket was 90 per cent on its richest citizens, “effectively a wage ceiling” reflecting the belief that there was a collective responsibility, “an acknowledgment that you can’t get too far ahead of everybody else. We won’t tell you how much you can earn, but you have to share it.”
Today’s attitudes are categorically different, Yalnizyan continues. Fuelled by the self-actualization decade of the 1960s, the rise of individualism and the impact of globalization, Canada’s culture has shifted from national to provincial, from collective to class, from “we” to “me.” There has been a dramatic flow of power and money from governments to the private sector and from Ottawa to the provinces. In lock-step, there has been an equally dramatic flattening of Canada’s tax structure to just three brackets.
Differences between people and provinces are now more important than what brings them together. And the differences are accelerated by the transformation of the tax system from seeking fairness to rewarding initiative.
“Today, you can’t only make more money than you ever did before, but the tax structure rewards you for that,” Yalnizyan says. “That’s the real big sea-change.”
It’s a sea-change that eats away at democracy because, she warns, “it prices the people, the business and government leaders who make the really big decisions on behalf of everybody, right out of the daily discourse and reality of most citizens.”
Comment by john buell, writing from on January 17th, 2007 at 1:17 pm:
Fascinating article, but it seems to me there is a contradiction here. The reserchers suggest there has been a change in Canadian culture from we to me etc, but large numbers of Canadians seem to be bothered by the results of this change, with three quarters even fearing social turmoil of one sort or another.Could it be the case that the breakdown of the Canadian welfare state has more to do with some inadequacies in the original model than with a cosmic change in attitudes and that some of the apparent change in attitudes is itself a form of self-protection in a world that can no longer promise effective security?
Here in the US, any criticism of the growing gap between rich and poor is often met by the belief of many citizens that they are going to become rich themselves. It seems to me this mindset is much more deeply etched in US citizens’ minds than in Canadians. I doubt that three quarters of the US population would ever worry that massive inequalities could produce social turmoil. And perhaps the widespread belief in Horatio Alger in the states makes social turmoil more unlikely, in a kind of self-fulfilling prophecy kind of way.