Ed Broadbent has a novel idea for convincing Prime Minister Stephen Harper and other Conservative politicians to care about income inequality.
“I would like to take them all and give them a good shake, and take them back to talk to their parents or grandparents,” he said.
As he envisions it, these heart-to-hearts would remind them of the fact that politicians of all stripes — including Conservatives — had a hand in helping to create Canada’s social welfare state.
“My lifetime was mostly spent with governments of all persuasions that at least claimed that they were trying to reduce inequality. Now we have governments that proudly are indifferent to it,” he said.
Raising the profile of Canada’s growing rich-poor divide is top of mind for the former NDP leader and founder of the left-leaning Broadbent Institute, which is dedicated in large part to tackling rising income inequality.
Speaking to The Huffington Post Canada in advance of the release of the think-tank’s latest report on the growing gap, Towards A More Equal Canada, Broadbent explained why income inequality “affects us all.”
The elder statesman also weighed in on the performance of new NDP leader Thomas Mulcair (a candidate he did not endorse in the recent leadership race), and what Trudeaumania 2.0 could mean for the NDP.
What do you hope to achieve with this report?
The major goal is to help stimulate debate right across the political spectrum in terms of [getting all of the] parties to pay attention to the problem, and across the communities, in towns and villages to get engagement in what is a very serious social issue for the country.
We’re getting worse more quickly than other rich countries when it comes to inequality. If you look at incomes, from 1982 to 2004, the bottom 60 per cent of Canadians working, when you allow for inflation, had no increase. And the precise middle, the median income, had [an increase of] $1,000, from $42,000 to $43,000. The rest [of the income gains] went to the top 20 per cent, and the top one per cent almost had their income doubled from $380,000 to $684,000.
So there’s a growing change in what Canada is all about. It’s totally different from the Canada I grew up in. Sure, we had inequality, and no one ever expects perfect equality, but my lifetime was mostly spent with governments of all persuasions that at least claimed that they were trying to reduce inequality. Now we have governments that proudly are indifferent to it.
With that in mind, what are the major obstacles to raising the profile of income inequality issues?
One is that the average Canadian has to understand that inequality affects us all, and not just the poor. Most ordinary people are feeling the pinch because they’ve had no real income increase in 20 years, but they often think of inequality in terms of poverty. But the key thing, the major democratic significance of inequality, is that we’re all affected, even middle-income Canadians, even upper-income Canadians.
The data is overwhelmingly clear that the more equal the society, the lower the level of teenage pregnancy, the lower the level of crime overall. There’s more political participation and civil participation by citizens. Kids are more more likely to become what they want to be than they are in unequal societies.
Another, to put it candidly, is the ideology of politicians. We have had in the Western world a kind of market-driven ideology. If you let the markets go, [and that] was overwhelmingly reinforced by tax changes that benefit the rich, we [would] all benefit. Many of our politicians, particularly Mr. Harper and the Conservatives, remain locked in that mentality. It hasn’t worked. It brought on a global crisis. It’s led us to the worst inequality since the 1920s. So they have to be persuaded. We have to have a serious debate about re-balancing markets and governmental forces on the other side.
Persuading the Conservatives seems like it will be a pretty big challenge. How will you overcome it?
Well, I’d like to take them all and give them a good shake, and take them back to talk to their parents or grandparents. I’m half-serious about this. Because it was [during] my parents’ generation and that of the grandparents of Mr. Harper — he’s a little younger than I am — that we had the creation of our more socially balanced state. Mr. Diefenbaker brought in hospitalization [insurance] for example, he was a Conservative. Mr. Pearson brought in the broader foundation of the welfare state in the 1960s, with universal health care with the Canada pension.
Of course, my party, the CCF [Co-operative Commonwealth Federation] and the NDP played a leading role in all that, but previous politicians did see the need for this balance. They didn’t want the markets to totally dominate our lives.
I wish I had the answer to how I could persuade other politicians. The Occupy movement ... has called attention to the problem. A lot of it will come from activist organizations, trying to mobilize around the issue. I think more of that needs to be done.
What are the specific Tory policies working against what you’re trying to achieve?
The reductions of income tax. Not only reductions of income tax, but disproportionate benefits to upper-income [individuals] that take away the money that’s needed for post-secondary education, for health care, for Canada pensions. Two of the economists that we [include] in our report show that these kinds of programs that go to everyone that need more expansion right now are, from a cost-benefit analysis, the best thing that middle-class Canadians will ever get.
The other thing that’s happened here, and you see it almost every day from Mr. Harper and in Ontario now, is attacks on unions. Again, the data is very clear, the OECD reports the higher level of unions that you have in a society, the higher level of equality that you have overall. Companies that want to keep unionized employees out frequently raise the wages and salaries of their own employees.
Increasing government support for social programs means convincing Canadians that taxes isn’t a dirty word. How do you plan to accomplish that?
We did a poll a few months ago, and we found that Canadians are upset with the degree of inequality. They believe it should be dealt with. But we asked a hard question, not just “Are you in favour of increasing taxes on the rich.” [It] was “Would you be willing to pay somewhat more in taxes yourself if this led to the improvement of social programs and reducing the degree of inequality.” And the answer, overwhelmingly, is yes.
If we compare ourselves to the U.S., which is a very anti-tax country, the majority of Canadians still see [the benefits], because we have universal health care. We have Canada pension. We have an employment insurance program.
[But] I don’t underestimate it. It’s still a challenge for politicians to go out there and say, “We need to increase taxes.”
You didn’t endorse Thomas Mulcair as the new leader of the NDP. How do you think he’s doing so far?
I think he’s just doing splendidly. He’s been fighting on the very issue we’re talking about, particularly in the case of jobs. Our report [puts] a lot of emphasis on creating jobs that are higher paying paying jobs, not just minimum wage jobs. [Mulcair has] done that.
I strongly endorse Tom. Yes, I supported another candidate [NDP president Brian Topp], but that’s part of the democratic process, and once you have a leader in place, whether or not you supported a leader, we’re in the same party, we share the same broad values. There have been past cases going back many years when I haven’t always been on the side of the newly elected leader, but I have rapidly joined the rest of the team and supported him or her.
What’s your take on Justin Trudeau’s decision to run for the Liberal Party leadership? How concerned are you about him splitting the centrist left vote, and reducing some of the gains the NDP made in the last election?
I suspect [I’m] right there with the majority of Canadians. Mr. Trudeau seems like a personable young man, but he hasn’t demonstrated yet, in the number of years he’s been in politics, a degree of expertise in any particular field.
This is not to say he won’t do that, that he won’t have policies that will be attractive to the people of Canada. All I would say right now [is that] we have a young man with a famous name. [His father was] a man who did some exceptionally good things for Canada, but I would also say some exceptional things that weren’t so good for Canada. [Justin] has won a couple of elections like most MPs have in their own area. But he has not as yet established solid credentials for why he should be prime minister. It’s early yet, so we’ll just have to see.
> Gini coefficient: 0.330 > Change in income inequality: +21.8% > Employment rate: 72.3% (6th highest) > Change in income of the rich: +2.5% per year > Change in income of the poor: +1.1% per year New Zealand performs well by a number of economic indicators, including employment, where it ranks sixth highest out of the 27 OECD countries in the study. Income in New Zealand has increased across the board since the 1980s, but the percentage annual increase among the top decile was more than twice as great as among the bottom decile. Among OECD nations, capital income in New Zealand as a percentage of total household income grew the most for the richest group and decreased substantially for the poorest group. Read the entire post at 24/7 Wall St.
> Gini coefficient: 0.336 > Change in income inequality: +8.7% > Employment rate: 72.4% (5th highest) > Change in income of the rich: +4.5% per year > Change in income of the poor: +3% per year The difference in the annual increase in income between the richest and the poorest in Australia from the mid-1980s to 2008 is one of the largest among all countries in the study. The average annual change in income for the bottom decile was 3%, compared with the top decile's 4.5%. This caused the Gini coefficient to increase 8.7% over those years. Australia has one of the highest minimum wages, as a percentage of average wages, of all the G-20 countries. The country also has a fairly high employment rate. Read the entire post at 24/7 Wall St.
> Gini coefficient: 0.337 > Change in income inequality: +9.0% > Employment rate: 56.9% (3rd lowest) > Change in income of the rich: +1.1% per year > Change in income of the poor: +0.2% per year In Italy, income inequality increased 9% between 1985 and 2008. According to the OECD, earnings for the wealthiest 10% increased an average of 1.1% each year, while earnings for the poorest 10% grew just 0.2% annually. Italy has the third-lowest employment rate among the 27 nations in the study, with just 56.9% of working-age adults holding jobs in 2008. Since 1985, unemployment benefits declined by more than 50% to one of the lowest recipient rates in the OECD. Read the entire post at 24/7 Wall St.
> Gini coefficient: 0.345 > Change in income inequality: +7.9% > Employment rate: 70.3% (10th highest) > Change in income of the rich: +2.5% per year > Change in income of the poor: +0.9% per year The UK had one of the biggest increases in the income gap between the wealthy and the poor over the past two and a half decades. On average, the income of the bottom 10% increased 0.9%, while income for the top 10% grew 2.5% per year. After Israel and Australia, the UK had the third-largest difference between the top decile's annual income increase and the bottom decile's increase. The income ratio of the wealthiest citizens to the poorest citizens is 10 to one. Read the entire post at 24/7 Wall St.
> Gini coefficient: 0.353 > Change in income inequality: n/a > Employment rate: 65.6% (14th highest) > Change in income of the rich: +1.1% per year > Change in income of the poor: +3.6% per year Despite its high Gini coefficient, Portugal's income inequality has been improving. From the mid-1980s to the late 2000s, the incomes of the country's poorest increased an average 3.6% each year. The incomes of the richest grew only 1.1% annually. The country has increased its efforts to redistribute income since the mid-1980s, such as through benefits for the unemployed. Read the entire post at 24/7 Wall St.
> Gini coefficient: 0.371 > Change in income inequality: +13.8% > Employment rate: 60.2% (7th lowest) > Change in income of the rich: +2.4% per year > Change in income of the poor: -1.1% per year In Israel, the average income of the bottom 10% actually decreased between 1985 and 2008. On average, income of the top 10% increased 2.4% per year. During the same period, income of the poorest 10% declined 1.1% each year -- the worst rate of decline among the 27 nations studied. Only one other country, Japan, saw its bottom decile's income fall as well. According to the OECD, the top 10% of Israel's residents make 14 times more than the poorest 10%. Read the entire post at 24/7 Wall St.
> Gini coefficient: 0.378 > Change in income inequality: +12.1% > Employment rate: 66.7% (13th highest) > Change in income of the rich: +1.9% per year > Change in income of the poor: +0.5% per year Inequality in the United States increased significantly from 1985 to 2008, putting it in the fourth-worst spot in the study. As with many other countries in which income inequality has increased, average income has gone up across all income groups since the mid-1980s, but not equally. The income of the wealthiest 10% has greatly outpaced the poorest 10%. The share enjoyed by the top 0.1% in total pretax income quadrupled in the 30 years to 2008. Read the entire post at 24/7 Wall St.
> Gini coefficient: 0.409 > Change in income inequality: -5.8% > Employment rate: 46.3% (the lowest) > Change in income of the rich: +0.1% per year > Change in income of the poor: +0.8% per year Turkey was one of the few OECD countries to experience a narrowing of the gap between rich and poor, with income inequality improving 5.8% between 1985 and 2008. However, it still has the third-highest income inequality among the countries in this study. Part of Turkey's problem is a relatively low number of government programs to aid the poorest citizens. The average government social expenditure among OECD nations is close to 20% of GDP, while it spends just above 10% -- the third-lowest percentage. The wealthiest 10% of Turkey's residents make 14 times more, on average, than the poorest 10%. Read the entire post at 24/7 Wall St.
> Gini coefficient: 0.476 > Change in income inequality: +5.1% > Employment rate: 60.4% (8th lowest) > Change in income of the rich: +1.7% per year > Change in income of the poor: +0.8% per year Mexico has one of the highest rates of income inequality. Among all OECD countries, Mexico has the lowest amount of public social expenditure as a percentage of GDP. It also has the lowest unemployment benefit recipient rates. Finally, the country has the lowest minimum wages as a percentage of average wages. Read the entire post at 24/7 Wall St.
> Gini coefficient: 0.494 > Change in income inequality: n/a > Employment rate: 59.3% (4th lowest) > Change in income of the rich: +1.2% per year > Change in income of the poor: +2.4% per year Chile is one of the few countries where the income of the poor increased at a higher annual rate than the income of the wealthy, 2.4% to 1.2%. Nevertheless, the South American nation has the worst income inequality among the 27 OECD nations examined. Chile has a particularly high rate of self-employed individuals, primarily because of its large farming class. The income ratio of the top 10% to the bottom 10% is 27 to one. Read the entire post at 24/7 Wall St.