Inequality

There’s an article in the Huffington Post commenting on a blog post by by labour economist Andrew Jackson that is receiving a lot of highly critical responses … things like BS!

o-INCOME-INEQUALITY-CANADA-570The author of the Huffington Post article digs a bit deeper however and shows that while “The higher your income bracket, the larger the increase in your income between 2006 and 2015 … [but] … What StatsCan’s data shows is that market incomes (that is, the paycheques given out in the labour market) rose in a similar pattern to earnings after taxes — the rich saw larger pay hikes than low-income earners … [thus] … This suggests that employers, rather than government policy, were behind the increase in income inequality — but government policy did little to mitigate the situation.

The income gap has been growing in recent decades in many developed countries,” the author says, so why does anyone expect that Canada might be different? There are a number of factors at play:

  • Low skill – high wage jobs continue to leave Canada looking for low wage areas;
  • The ageing population – more and more retired people living on pensions – explains why there were very low gains amongst the low income groups;
  • Automation means that the demand for highly skilled – highly paid people is outstripping the supply thereby raising wages at the higher end of the spectrum.

It’s not government’s job to eliminate inequality – even if it could, which it cannot. It is government’s job to help people to adapt to a changing economy by improving their skills and knowledge.

 

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