Income Inequality

For the times they are a-changin’

The slow one now
Will later be fast
As the present now
Will later be past
The order is
Rapidly fadin’.
And the first one now
Will later be last
For the times they are a-changin’.

You will recognize the words of Bob Dylan, from an anthem for change he wrote when I was a teenager. To many young people, the song seemed so perfectly valid. We saw a world where Bull Connor, Lester Maddox and racist goons would be unwelcome. We believed that war was an avoidable part of human nature, that poverty could be eliminated, that tomorrow would be a better day.

I’m a baby boomer who grew up relatively poor, in a home damaged by what we now recognize as post-traumatic stress disorder, a condition that affected many who served in WWII.

Yet, approaching adulthood, I had real opportunity to succeed. From a public secondary school, I attended UBC and lived on campus. Tuition was relatively low—in current dollars, a little more than half of what it is today. My student housing at UBC was safe and affordable.

Males had summer employment almost guaranteed at a coastal paper mill and the work paid good union wages. For me and other young men from my hometown, post secondary education was available, almost without regard to our families’ financial capabilities. For many, student debt at graduation was zero.

People who chose to enter the workforce immediately after high school had good prospects. Trade apprenticeships and other well-paid jobs were readily available in BC’s growing economy.

After marriage, Gwen and I rented a new 650 square foot one bedroom apartment, one kilometer from Vancouver General Hospital, where she worked as an RN. Rent was $800 a month in today’s dollars. The very same unit today costs around $1,500.

At age 25, Gwen and I bought a townhome, assisted by a provincial grant to first-time buyers almost sufficient to cover the down payment. After 18 months, we moved to a detached home in North Delta that cost $240,000 in today’s currency. If you want that house now, it’s assessed at more than $900,000.

I recount the above to make the point that economic and social mobility was much easier before politicians and voters listened when the conspicuously wealthy began “urging the character-building value of privation for the poor.”

Today, British Columbia is far richer than fifty years ago but that wealth is distributed much differently. As a result, despair is widespread, homelessness grows, thousands die each year from drug abuse, more than one hundred die by homicide. Uncounted humans are wasted.

Photo by Matt Collamer on Unsplash

Our current provincial government is searching for answers but influential citizens in this province are more than satisfied with the status quo. Instead, as John Kenneth Galbraith said, they are searching “for a superior moral justification for selfishness.”

‘Socialism for the rich’: the evils of bad economics, The Guardian Long Reads, June 2019

The economic arguments adopted by Britain and the US in the 1980s led to vastly increased inequality – and gave the false impression that this outcome was not only inevitable, but good. By Jonathan Aldred

In most rich countries, inequality is rising, and has been rising for some time. Many people believe this is a problem, but, equally, many think there’s not much we can do about it. After all, the argument goes, globalisation and new technology have created an economy in which those with highly valued skills or talents can earn huge rewards. Inequality inevitably rises. Attempting to reduce inequality via redistributive taxation is likely to fail because the global elite can easily hide their money in tax havens. Insofar as increased taxation does hit the rich, it will deter wealth creation, so we all end up poorer. In most rich countries, inequality is rising, and has been rising for some time. Many people believe this is a problem, but, equally, many think there’s not much we can do about it.

One strange thing about these arguments, whatever their merits, is how they stand in stark contrast to the economic orthodoxy that existed from roughly 1945 until 1980, which held that rising inequality was not inevitable, and that various government policies could reduce it. What’s more, these policies appear to have been successful. Inequality fell in most countries from the 1940s to the 1970s. The inequality we see today is largely due to changes since 1980.

…The idea that rising inequality is inevitable begins to look like a convenient myth, one that allows us to avoid thinking about another possibility: that through our electoral choices and decisions in daily life we have supported rising inequality, or at least acquiesced in it.

…Inequality is unlikely to fall much in the future unless our attitudes turn unequivocally against it. Among other things, we will need to accept that how much people earn in the market is often not what they deserve, and that the tax they pay is not taking from what is rightfully theirs.

…Inequality begets further inequality. As the top 1% grow richer, they have more incentive and more ability to enrich themselves further. They exert more and more influence on politics, from election-campaign funding to lobbying over particular rules and regulations.

…Warren Buffett: “Imagine there are two identical twins in the womb … And the genie says to them: ‘One of you is going to be born in the United States, and one of you is going to be born in Bangladesh. And if you wind up in Bangladesh, you will pay no taxes. What percentage of your income would you bid to be born in the United States?’ … The people who say: ‘I did it all myself’ … believe me, they’d bid more to be in the United States than in Bangladesh.”

Much of the inequality we see today in richer countries is more down to decisions made by governments than to irreversible market forces. These decisions can be changed. However, we have to want to control inequality: we must make inequality reduction a central aim of government policy and wider society.

Excerpts from an article by The Guardian, adapted from Licence to be Bad: How Economics Corrupted Us by Jonathan Aldred, published by Allen Lane and available at guardianbookshop.co.uk

Why DO conservatives hate science so much?, Church and State, 2017:

…We have literally lobotomized ourselves.

And to what do we owe this gift of dumb? Right Wing fundamentalism, both religious and political. No one has taken this quote from Benjamin Franklin as seriously as the powers that be in the conservative movement:

“A nation of well informed men who have been taught to know and prize the rights which God has given them cannot be enslaved. It is in the region of ignorance that tyranny begins.”

They’ve taken it seriously all right; as a serious threat to their agenda. A well informed populace is hard to lie to. A well informed population is hard to manipulate with propaganda. A well informed population is hard to convince that economic suicide is a viable platform.

The Right has spent decades slowly eroding the foundations of intellectual America. Where once teachers were respected and scientists idolized, now they are pariahs. Teachers’ Unions are the cause of our failing schools! Educated people are elitists! Intellectuals are Socialists! Scientists are all lying to you about the environment! Except for this small handful of scientists and intellectuals that inexplicably agree with everything we paid them to say, you can trust them…

Categories: Income Inequality

10 replies »

  1. If this continues we will see societal collapse. It’s already well on its way. The distribution of national wealth has lost its balance and the equity gap grows wider by the day. France and Russia had revolutions as a result of this same problem

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  2. Thanks Norm; I know most folks do not like any hint of conspiracy because they prefer that objective market forces prevail in their personal world.

    Take a read of how the ” cost of living ” index is prepared and the big take-away is that all non-market prices for goods and services are deliberately excluded . Guess what is excluded, governments and crown corp. goods and services, like property taxation, ICBC, BC Hydro, etc.

    For nearly 20 years lawmakers have been or should have been aware that in certain legal circles, like the BC Law Institute, it is judged that “contract law” is unfair to the population. Not only did they find this unfairness but they even developed draft legislation to correct the unfairness. Their first kick at the can was published in 2004 with a secound go in 2012. Now in 2019 no legislation has been passed into law and shows no likelihood of being so.

    Now back to cospiracy. I find it impossable to accept this condition as accidental but rather evidence of politicians deliberately obliging the 1% while claiming to be looking after the public’s interest.

    Ask any provincial or federal politician if they know of the above or think this condition is intolerable and you will be ignored or dismissed. This is why Piketty wrote that wealth concentration was not accidental. Right now property/wealth theft on a number of fronts prevails with the end in sight of being financially indentured.

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    • I think “conspiracy” is one of the words that has had its meaning cannibalized in the service of wealth. It seems to be substituted for “agenda” in lots of different arenas.

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  3. “in most rich countries, inequality is rising, and has been rising for some time. Many people believe this is a problem, but, equally, many think there’s not much we can do about it”

    +++++++

    One only needs to move out of the Lower Mainland to find housing at affordable prices.
    House ownership isnt a “right”.
    Affordable “housing” is, and if that means renting. So be it.
    There’s no shame in renting.
    I rent.
    Anyone that insists on buying housing at these prices is an idiot.

    BC is experiencing its lowest unemployment rate since the 1960’s…. so moving out of the Lower Mainland isnt the “employment hardship” it once was.

    To expect a “job for life” and “affordable housing” where you were born is about as arrogant as it gets.
    Ask any immigrant if they would move back to their country of origin if there was a democratic, lawful govt and lots of work.
    They would be gone from here in a heartbeat.
    People move to where there is opportunity for a better life
    If everyone moves here…..accommodation availability drops and prices go up.
    Simple economics..
    I moved 4000 miles to find work here over 35 years ago..

    As for “blaming” teachers.
    I merely look at the economics of our tax dollars at work.
    Health and Education take $0.80 of every tax dollar collected.
    So when I hear Nurses and Teachers screaming for more money (higher wages) because “it’s about the kids” I wonder where the money for all the other govt agencies will come from.

    You know.boring things like roads,, police depts, fire depts, ferries,, parks,
    Right.
    The teachers and nurses that earn , on average $80,000 per year and climbing…..
    Cry me a river of tears at the “unfairness” of their plight.
    Dare I suggest that they do as I did and move to another Province where.they can soon realize that even though they earn more money…..Canadian winters are hellish.
    But never mind.
    We’ll just keep raising taxes to pay for them…. because the sheeple never complain.
    But you cant raise taxes forever because people stop spending money or move their money “underground”. causing the economy to grind down even faster.

    I’m sick of politicians receiving thousands in political donations from unions or big business…. returning the fiscal favour by shovelling my hard earned tax dollars down another , endless trough of wasteful spending.
    Its a total conflict of interest.
    Liberal govts fund their Corporate cash cows.
    NDP govts fund their Union cash cows.
    It’s a …..blatant…..conflict…..of ……interest.
    Its illegal.
    A balanced budget should be LAW and any politician that cant accomplish that simple, basic, economic task should have one year of their taxpayer funded , gold plated, inflation indexed, pension removed from their retirement fund.
    Nothing like personal financial pain to focus the corrupted, incompitant, media darling politicians infesting every level of govt these days
    OR
    We just fire all the politicians and let accountants run the “show”.

    Honest govt with fiscal responsibility…..
    Is that so much to ask for and expect?
    .

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  4. Rants R Us. The evils of socialism or communism, most can’t or won’t look at the differences. Teachers are to blame for your high taxes? Really. Unions are evil, well they are not perfect, but they are better than employers who “give you the right to work”, seven days a week for low wages. Benefits, they are for losers and they cost money, that could be horded! Good, hard conservative values, for others and lots of rules, but not for us!

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    • I believe 80 % of every tax dollar collected goes to Health and Education.
      And with the new Court ruling ( proving once again the “justice” system is so out of touch with reality) about class sizes, accessibility for students with autism, dyslexia, transgender washrooms, safe spaces, special needs councillors, assistants, and the paper pushing bureaucracy that needs all that expensive, politically correct “feel good” stuff to function…..on and on and on and on and on until the tax payer’s back is…….broken.,
      Poverty Pimping comes to mind.
      I cant wait until the fiscal “dumpster fire” of ICBC spreads to Health, Education, BC Ferries, BC Hydro….
      And if you think raising taxes is going to attract more teachers, nurses, doctors, etc…….. good luck with that.
      The economy is turning into the “haves” ( govt workers with lush salaries, pensions and benefits) and the “have nots” ( non union real world private sector taxpayers working 3 part time jobs that dont have any of your benefits and pensions. ).
      Time and taxpayer money is running out……
      Better hurry and sign that next “well deserved” wage,increase.
      Then you can go back to your safe space.

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  5. Our world’s economic system (and please, it ain’t capitalism, it’s kleptocronyism) isn’t based on wealth, but on debt.

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  6. Hi from Erik again;
    By directing the readers to the findings of the BC Law Institute and particularly the list of supporting names , including the Justice Department of Canada, my hope is it would become the smoking gun we need when confronting the 1% and their front men/ladies.

    The MPs and MLAs are in charge of legislation in Canada and that is the target of the Report by the Institute. We all have access to this weapon so let us use it to dial back some of our lost sovereignty.

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    • The 2005 Law Institute report overview defined unfair contract terms thusly:

      “Unfair contract terms are specific contract terms that are particularly harsh, grossly one-sided, or unconscionable.”

      The 2011 draft Contract Fairness Act provides under section 5, the general test for fairness that:


      “(3)
 For the purposes of this Part, a party knows a fact if the party has actual knowledge of it or is reckless or willfully blind as to its existence.”


      I wonder if this applies to BC Hydro and it’s view of the facts surrounding the energy market when they inked long-term IPP contracts?

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  7. Hi Lew; Yes to BC Hydro being willfully blind and ignorant of the contractual revenue from ratepayers needed to service the $60 billion of contractual obligations (before Site C) they signed for in our name. After these contracts have been paid out by BC Hydro customers we will own nothing from the process. at least I can’t find a book keeping entry showing our getting ownership of any assets.

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