Canada's richest 1% getting richer

[Moonlight Graham]

The thing that is key about your comparison is that life isn't materially getting much better for the 99% but all gains are going to the 1%.

Actually, the article, and my argument, is careful to specifically state that it is gains in income (inflation-adjusted) for the 99% that isn't getting better. Standard of living is going up I would argue though, but a major portion of this is likely increased personal debt.

Edited January 30, 2013 by Moonlight Graham

[TimG]

Actually, the article, and my argument, is careful to specifically state that it is gains in income (inflation-adjusted) for the 99% that isn't getting better.

People can buy more with less income. That means their standard of living has increased. Even if you dispute this why do you think that taking more money from the wealthiest is going to change a damn thing? According to this paper the 1% already pay an effective tax rate of 30%. Increase that to 50% (which would mean people would face marginal rates >70%) and divide it among the 99% and you would get maybe $500/person. Do you really think that 500/taxpayer is going to make up for the changes in the economy that have driven the slow growth in middle class wages? http://www.statcan.g...e/10350-eng.pdf

No matter how you spin your complaints about the richest 1% come across as the whining of a bitter person. It is not driven by a desire for justice but as desire for revenge. If you were really motivated by a desire for justice you would be talking about what is required to ensure equality of opportunity instead of obsessing over income growth statistics.

Edited January 30, 2013 by TimG

[blueblood]

That must be what they told my Coal minner great grand dad when he went to work in the mine at 13 because his family owed the company store so much. "If you dig the same amount as 15 men you will get your family out of dept....that disparity is an incentive so get to work because otherwise you mom is going to jail."

Thats what they told my great grand dad as well and we went from having a shack in the woods to two multi building yard sites with a shop big enough to put the original shack in with room for all the machinery to boot.

In the words of Eddie Murphy "yes I can!"

[blueblood]

Here come the typical rightwingers here to defend the status quo for which they have been ideologically brainwashed by the wealthy to be seen as "just" based on "liberty" and the that wonderful and always fair & perfect "invisible hand" of the market. I love it.

It's wonderful to get a better education. But when you pay over 20k for a typical degree, plus the increasing need for a masters degree (so spending 2-3 more years and school plus the money/debt for it) for which you are required to get if you want a half-decent job these days, this requirement for more education and more money/years spent in school would mean that it would be nice if people's income actually increased a bit to compensate for this upgraded skill/knowledge over a 30 year period of profits that both the business owners and workers have worked together to produce. But no, the investors & business owners etc. have kept virtually all of the profits (minus some increased tax-hikes on the rich) even though the 99% have done 99% of the work.

Innovative business owners deserve to be rich, to be well compensated because they are well-arguably the most valuable workers to the economy on a per-head basis. My argument is that the 99% deserve at a bit better share of the increase in profits that would not be had without their labour and innovation as well. Virtually a 0% profit share is BS.

Typical rightwing attitude. Blame "laziness" on the exploitation & greed of the wealthy their political allies. Please explain how laziness has caused this increased income inequality with statistics or some legit sources.

Oh ok, so you reckon yourself as one who makes over $150k or whatever was used in the study to denote the 1% cut-off. That's great that you have a business. Yes, investors & business owners help spur the economy. But so do consumers, the vast majority of which are statistically the 99%. If consumers didn't buy your goods/services, you would be out of business. If you didn't build your business, consumers wouldn't have your services/goods. If you didn't have any employees, your profits would be much smaller if non-existant. It's a 2-way street. One connot exist without the other, yet only one group has been compensated inincreased income based on the profits all parties have helped create the last 30 years.

Why don't you pay your employees more money? Because you can. That's how the system works, which needs to be tinkered with to create more income equality.

It's not brainwashing its reality, he who knows the ways of the invisible hand, benefits from the invisible hand.

Liberal arts degree= waste of money. Get a trade, get a business degree, go work in a mine, oil rig, farm to pay for school. There is an education inflation issue. 40 yrs ago a high school degree was good enough, why do we need to spend all this time in school. A lot of university students are getting hosed. People get paid what they're worth, right now menial labour from overseas is dropping the cost of labour here, the party is over. Thats what happens when you go and buy products on credit and debt instead of buying things with saved money from actual work.

The 99% do get a share in the profits, they get paid wages and benefits on a competitive basis with other labourers, however the labour pool is large, and the 99% of other people on this planet want the same piece of the action as people in the developed world. Thats the most efficient foreign aid there is, everyone on earth is far richer than 50 yrs ago.

Theres no issue with income equality, business owners have a larger market with all the emerging markets and are making a killing at it. I am far better off with richer overseas customers than I was just exporting to developed countries. No risk, no reward. Wage earners didn't want to take the risk, they can settle for their wage.

If consumers didn't buy my goods, they would starve. If consumers didn't buy oil their standard of living would go down. Consumers will always have a demand for these things and the prices reflect that demand. If consumers have less money in their pocket, prices drop in order to spur demand. Right now there are a lot of people with money who want my products, hence higher prices. If there werent business, the employees wouldnt have a job and we'd be like subsaharan africa. Its the business owner risking his money to get a return that is improving the lot of people, or would you rather have it like medieval days where aristocrats stuffed all their money in a vault and didn't make a go at making more. How was that like for the 99%?

I pay my employees based on what other employers pay, and right now its also a lot. $20/hr for unskilled; 18$/acre if you have your own piece of machinery at seeding time. If I don't pay that level I don't get any workers.

The system does work, it rewards people who work and punishes those who take shortcuts. I'm already pulling my weight, how about you start stepping up to the plate, equality works both ways; we rich people risk a lot, and contribute a lot more than the 99%.

[blueblood]

The cost of technology very often reduces as time goes on. I could buy a cell phone, tv, computer etc. from 5 years ago for virtually nothing. Also, those are the days of single-income families. 2 incomes for a home often these days, but how much has standard of living in a home increased?

We are also not comparing 50 years ago, we are comparing the last 30 years, since 1982 in the stats the study focuses on. Taking debt into account, has the economic standard of living for most people in Canada gone up since 1982? It probably has for various reasons, but its not because they're making more money.

Are you aware that market liberalization schemes (thanks Reagan & Thatcher) from the 1980's and 90's forced onto many African countries as conditionality for restructing their debt repayments and new loans from international financial institutions like the IMF and World Bank (SAP's), along with foreign aid conditionality from western governments like the US, UK, and whomever, was a significant reason that Sub-Sahara African countries on average produced negative GDP growth in those 2 decades, whereas the same region produced positive GDP growth in the decade prior and afterwards (1970's and 2000's)? Almost similar story with most Latin America/Carribean countries in those decades. With income inequality inherent with increased market liberalization, rich/elites gained a hugely unequal portion of the wealth generated in those countries, while in Sub-Saharan Africa the large poorer pop. saw income generally drop. There are other variables to consider obviously but neoliberal reforms are one of the biggest.

http://www.ers.usda.gov/datafiles/International_Macroeconomic_Data/Historical_Data_Files/historicalRealPerCapitaGDPValues.xls

Are you aware that sub saharan africa is why govt shouldn't be providing foreign aid? South east asia got sweet nothing from the western world and its booming, Africa is still waiting for its handouts. Market liberalization made asia the fastest growing economy these days, heck even communist China figured that one out.

[August1991]

Edited January 30, 2013 by August1991

[Michael Hardner]

It's not brainwashing its reality, he who knows the ways of the invisible hand, benefits from the invisible hand.

Liberal arts degree= waste of money. Get a trade, get a business degree, go work in a mine, oil rig, farm to pay for school. There is an education inflation issue. 40 yrs ago a high school degree was good enough, why do we need to spend all this time in school. A lot of university students are getting hosed. People get paid what they're worth, right now menial labour from overseas is dropping the cost of labour here, the party is over. Thats what happens when you go and buy products on credit and debt instead of buying things with saved money from actual work.

You're all over the map. Do you think an Engineering degree puts you in the 1% ? Also, the most successful people I have worked with had arts degrees, or no degrees - they had entrepreneurial spirits.

The 99% do get a share in the profits, they get paid wages and benefits on a competitive basis with other labourers, however the labour pool is large, and the 99% of other people on this planet want the same piece of the action as people in the developed world. Thats the most efficient foreign aid there is, everyone on earth is far richer than 50 yrs ago.

Theres no issue with income equality, business owners have a larger market with all the emerging markets and are making a killing at it. I am far better off with richer overseas customers than I was just exporting to developed countries. No risk, no reward. Wage earners didn't want to take the risk, they can settle for their wage.

Right - but the point is that it's a game and government sets the rules. When the rules change - if the benefits only go to some of the people, the risk is that democracy will rear its ugly head and make other changes.

Also - I think MG has shown that not everybody is richer than 50 years ago - that is the whole point.

The system does work, it rewards people who work and punishes those who take shortcuts. I'm already pulling my weight, how about you start stepping up to the plate, equality works both ways; we rich people risk a lot, and contribute a lot more than the 99%.

The system also listens to people who have money, which is normal as far as history goes. If inequity goes too far then your wealth will simply be taken - by taxation or otherwise.

But you've hit on it - "the system works". Part of that implies that people believe it's roughly fair, which is not the same as saying it actually is fair. Nobody can answer the latter question IMO.

[Michael Hardner]

Thatcher's first retort (and presumably main point), though, does not apply to MG's first post. She says that all Britons were better off after 10 years, but in Canada:

The 99 per cent of people were actually taking in much less than $28,000 in 1982, but in terms of buying power, their share is essentially the same today as it was then.

[Smallc]

With $204 000 a year being the entry ticket, it isn't as if we're talking about a group of super wealthy people overall.

[TimG]

Also - I think MG has shown that not everybody is richer than 50 years ago - that is the whole point.

And why should that be a problem? We may be in a slow growth phase now which means that the real incomes of the aggregate may not rise any more and there is no government policy that will change it.

Part of that implies that people believe it's roughly fair, which is not the same as saying it actually is fair. Nobody can answer the latter question IMO.

Exactly, capitalist systems must be unequal by their nature. The dividing line between 'fair' inequality and 'unfair' inequality is completely arbitrary and therefore not a useful discussion point. That is why I think we should be talking about policies to ensure 'equality of opportunity' rather than changes to relative wealth. Edited January 30, 2013 by TimG

[Newfoundlander]

Good for them!

[jacee]

And why should that be a problem? We may be in a slow growth phase now which means that the real incomes of the aggregate may not rise any more and there is no government policy that will change it.

Exactly, capitalist systems must be unequal by their nature. The dividing line between 'fair' inequality and 'unfair' inequality is completely arbitrary and therefore not a useful discussion point. That is why I think we should be talking about policies to ensure 'equality of opportunity' rather than changes to relative wealth.

Nah ... Off with their heads!

Edited January 30, 2013 by jacee

[Michael Hardner]

And why should that be a problem? We may be in a slow growth phase now which means that the real incomes of the aggregate may not rise any more and there is no government policy that will change it.

It's a problem if people think it's a problem.

Exactly, capitalist systems must be unequal by their nature. The dividing line between 'fair' inequality and 'unfair' inequality is completely arbitrary and therefore not a useful discussion point. That is why I think we should be talking about policies to ensure 'equality of opportunity' rather than changes to relative wealth.

I guess you missed my post about the Gini coefficient. While you are correct that there is no 'line' there are outcomes that result from high and low inequality that work against a thriving economy. Too little equality (such as an absolute monarchy or communism) means that there is no incentive to work harder and too much provides basically the same problem in reverse.

[TimG]

It's a problem if people think it's a problem.

Add if governments are powerless to do anything about it?

Too little equality (such as an absolute monarchy or communism) means that there is no incentive to work harder and too much provides basically the same problem in reverse.

But what I am saying is equality is absolutely the wrong focus for policy discussions because the same absolute level of 'inequality' could be good or bad depending on other conditions in society. For example, an extremely unequal society would be fine if there was also an extreme level of social mobility. An extremely 'equal' society would be bad if there is no social mobility.

This is why I think discussions of GINI or the inequality are misguided and lead to bad policy. Social mobility needs to be the prime focus of any policy discussion.

Edited January 30, 2013 by TimG

[Michael Hardner]

Add if governments are powerless to do anything about it?

They're never powerless, nor all-powerful. They create the foundation for the economy to thrive or ... not.

In any case, you're not talking realistically about our situation at this point as governments have lots of power. A big power that they have is to rescind trade agreements and this is either an option or a pervasive threat, depending on how you look at things.

But what I am saying is equality is absolutely the wrong focus for policy discussions because the same absolute level of 'inequality' could be good or bad depending on other conditions in society. For example, an extremely unequal society would be fine if there was also an extreme level of social mobility. An extremely 'equal' society would be bad if there is no social mobility.

Hmmm... I`m trying to get my head around the idea of a country with a high amount of inequality and a high level of social mobility. I am also wondering how a society can be 'equal' and have no social mobility. Maybe give me some examples.

I think the implied assumption of the Gini model is that the coefficient reflects both inequality and the ability for people to change their station. That's what I get from it, but I sense a side discussion coming on. Unfortunately.

[Bonam]

Hmmm... I`m trying to get my head around the idea of a country with a high amount of inequality and a high level of social mobility. I am also wondering how a society can be 'equal' and have no social mobility. Maybe give me some examples.

Such a society would be one where people can make a lot of money quickly, but where that money can be (and often is) rapidly lost as well. Doesn't seem that hard to understand. And a society can be equal and have no social mobility in a state such as idealized communism.

I think the implied assumption of the Gini model is that the coefficient reflects both inequality and the ability for people to change their station. That's what I get from it, but I sense a side discussion coming on. Unfortunately.

You might want to reread about what the Gini coefficient is. It is computed directly from the income distribution and reflects only equality/inequality, not mobility.

[TimG]

In any case, you're not talking realistically about our situation at this point as governments have lots of power. A big power that they have is to rescind trade agreements and this is either an option or a pervasive threat, depending on how you look at things.

Sorry. I should have qualified: governments have limited ability to make things better. They can make them a lot worse. Edited January 30, 2013 by TimG

[Michael Hardner]

Such a society would be one where people can make a lot of money quickly, but where that money can be (and often is) rapidly lost as well. Doesn't seem that hard to understand. And a society can be equal and have no social mobility in a state such as idealized communism.

A society where people make a lot of money quickly and lose it quickly ? I'm stumped. Kind of like a pseudo-Vegas where the high-rollers are waiting tables one week, then winning the next, then back waiting tables again ?

People don't usually lose a lot of money once they have it.

Equal with no social mobility - I guess that makes sense if there is true communism but that also hasn't ever existed as far as I know.

You might want to reread about what the Gini coefficient is. It is computed directly from the income distribution and reflects only equality/inequality, not mobility.

Right - but it's kind of a given that if society gives you the option to make money, you will do so and the coefficient will reflect that, i.e. fewer people in the lower classes relative to wealthier.

[Michael Hardner]

Sorry. I should have qualified: governments have limited ability to make things better. They can make them a lot worse.

You're ignoring the last 30 years, somehow. Do you not believe that Global trade is responsible for the lion's share of growth we have seen Globally ?

[Bonam]

Right - but it's kind of a given that if society gives you the option to make money, you will do so and the coefficient will reflect that, i.e. fewer people in the lower classes relative to wealthier.

No, that's not a given at all. Our society gives you the option to make money. And yet look around you. In any case, "classes" are almost always defined relative to the economic standards of the time, as in quintiles or top 1% or whatever. No matter how rich everyone gets, there will always be a bottom quintile and a top 1%.

[TimG]

A society where people make a lot of money quickly and lose it quickly ? I'm stumped. Kind of like a pseudo-Vegas where the high-rollers are waiting tables one week, then winning the next, then back waiting tables again ?

Or a society where people are poor while they are young, become wealthy as they get older and bequeath nothing to their children who have to start from scratch like they did.

[Michael Hardner]

No, that's not a given at all. Our society gives you the option to make money. And yet look around you.

So you're rebutting a mathematical number with some opinions here. Yes, we have the option to make money, and yes it requires work, and these things are reflected in that number.

In any case, "classes" are almost always defined relative to the economic standards of the time, as in quintiles or top 1% or whatever. No matter how rich everyone gets, there will always be a bottom quintile and a top 1%.

Well, yes, but none of this is informative to an examination of where we are today.

[Michael Hardner]

Or a society where people are poor while they are young, become wealthy as they get older and bequeath nothing to their children who have to start from scratch like they did.

Or a society where people are poor while they are young, become wealthy as they get older and bequeath nothing to their children who have to start from scratch like they did.

Ok but is there a real example ?

[Argus]

The thing that is key about your comparison is that life isn't materially getting much better for the 99% but all gains are going to the 1%.

How would one change that without chasing away investors ?

Most of the advantage is to those who are big investors. Ie, the rich (not the 1%

[Michael Hardner]

Most of the advantage is to those who are big investors. Ie, the rich (not the 1%

The problem is even more difficult then.