Raising taxes on the rich is often touted as an effective way to narrow Canada’s growing income gap. But according to one of the world’s most preeminent researchers on the subject, a more fundamental shift will require addressing the root of the problem: huge and growing differences in what people are actually being paid.
Though a more redistributive taxation policy would help bridge the rich-poor divide, British income gap guru Richard Wilkinson says it’s not the most significant way to improve social relations -- the key factor in understanding why inequality makes us more unhealthy, violent and unhappy.
Wilkinson says reversing the slide towards greater inequality demands a “new model” to level the playing field between CEOs and employees.
“There’s no doubt that the big reason for the income differences [is] not so much the poor getting left further behind, it’s the rich running away from the rest of us with the bonus culture,” he told The Huffington Post Canada in an editorial board meeting this week.
“That reflects a lack of democracy; people at the top feeling that they can do what they like, that they’re not accountable. We must answer that by making them accountable.”
When it comes to determining how to to inject this accountability, Wilkinson recommends looking outside current models, maintaining that “there are no good examples of where the future lies.”
However, he contends that stacking corporate remuneration boards with employees, and supporting the creation of cooperatives and employee-owned companies, is a good place to start.
“An employee buyout turns a company from a piece of property into a community,” he said. “It’s better for us in all sorts of ways -- not only because those kind of companies have smaller income differences, but it changes the quality of working relationships.”
More on income inequality at Mind The Gap:
Since his book the Spirit Level came out in 2009, many policymakers have started paying attention to the social epidemiology professor’s ideas. This week, amid a cross-Canada speaking tour, Wilkinson met with officials in the government of Ontario.
As one such official told HuffPost, the meeting was an attempt to understand Wilkinson’s research on poverty and income inequality.
“It is a different way of looking at the issue. He’s got very interesting conclusions, so it behooves us as policymakers to listen and to figure out how it actually feeds into the work we do,” the official said.
A professor emeritus of social epidemiology at the University of Nottingham Medical School and co-founder of the U.K.-based think tank The Equality Trust, Wilkinson has spent nearly 40 years making connections between greater income inequality and everything from obesity and teenage births to homicides and drug abuse.
He believes that these phenomena are primarily due to the stress that high levels of inequality imposes on people, magnifying feelings of inadequacy, failure and insecurity all along the income distribution.
“What the [income inequalities] are doing is amplifying all the ways in which status and class affect us all from earliest life onwards,” he told HuffPost. “Problems related to social status get worse when you increase the social status differences.”
According to Wilkinson, it’s a message that is increasingly gaining traction. Since The Spirit Level was published, he says he has given more than 700 talks to a wide range of audiences in countries around the world.
“I find it very surprising that we haven’t all grown up with this stuff as obvious. But as soon as you start describing the picture and the evidence, I think people start to feel, ‘Oh yes,’” he said. “It fits our intuitions.”
His visit to Canada has so far included several high-profile speaking engagements in Calgary and Toronto, where he was a featured speaker at the North American Basic Income Congress.
All of which suggests that discussion about income inequality is becoming more mainstream in Canada, where the gap has grown significantly in recent decades. Though Canada remains far more equal than the U.S., the rich-poor divide is deepening at quicker pace.
When it comes to closing the gap, Wilkinson said the major barrier in developed countries is “a misguided self-interest among the very rich.”
“A lot of those sorts of people probably won’t read the evidence,” he said. “We’ve had criticisms from [people on] the far right who behave as if we’ve just invented the data.”
But if the political will is there, Wilkinson insists that his research is “grounds for enormous optimism.”
“It really suggests you can improve the psychosocial well-being of the whole society by reducing the income difference,” he said. “It will be a struggle to get there but we can see the way.”