The Politics of Social Inequality in Canada:
Table of Contents
PART 1 - FRAMING SOCIAL INEQUALITY
Chapter 1 – The Iniquities of Inequality
Chapter 2 - Conceptualizing Social Inequality
PART 2 IDENTITY-BASED INEQUITIES
Chapter 3 - Social Class and Class Relations
Chapter 4 - The Poverty of the Underclass
Chapter 5 - Gendered Inequities
Chapter 6 - Racializing Inequality
Chapter 7 - Aboriginal Peoples: Canada’s First Inequality
PART 3 INSTITUTIONAL INEQUITIES
Chapter 8 - The New Economy, New Inequalities
Chapter 9 - Education and Schooling
Chapter 10 - Media: Mediating Inequality
PART 4 - SOCIAL EQUALITY
Chapter 11 - Globalization and Global Inequality
Chapter 12 - Equality Matters, Too
DETAILED TABLE OF CONTENTS
PART 1 - FRAMING SOCIAL INEQUALITY
Chapter 1 – The Iniquities of Inequalit
Introduction: Surveying Social Inequality in Canada
Social Inequality: Politics and Paradoxes
Framing Social Inequality
Inequality Matters, Sociologically Speaking
Chapter 2 - Conceptualizing Social Inequality
Introduction: Problematizing Social Inequality?
Deconstructing Social Inequality: The ‘Social’ Matters
What’s the Inequality in Social Inequalityi
Explaining Social Inequality: Who’s to Blame?
PART 2 IDENTITY-BASED INEQUALITY
Chapter 3 - Class Counts: Social Class and Class Relations
Introduction: Class Inequality as Life or Death on the Titanic Contesting the Class Concept
Conceptualizing Social Classes: Real or Constructed?
The Hyper-rich Class: Return of the Robber Barons
Classed Media: Media Representations of Social Classes
Chapter 4 – The Poverty of the Underclass
Introduction: The Poverty of the Poor
The Scope of Poverty in Canada: Playing the Numbers Game
Framing Poverty: Absolute or Relative, Needs or Inclusion
The Lash of the Underclass
Homelessness: Street Level Poverty
Putting Poverty into Perspective
Chapter 5 - Gendered Inequities
Introduction: You’ve Come a Long Way, Baby(?)
Gendered Inequalities: Canada and Abroad
Minority Women: Minorities Within Minorities
Explaining Gendered Inequality: Intersectionality & Intrasectionality
Chapter 6 - Racializing Inequality
Introduction: The Racialization of Inequality
Patterns of Racialized Inequality
Explaining Racialized Disparities
Chapter 7 - Aboriginal Peoples: Canada’s First Inequality
Introduction: First Nations, Second Class Citizens, Third World Conditions
Attawapiskat: Where Dying in Slow Motion is a Way of Life
Solving the “Indian” Problem: Assimilation, Accommodation, Autonomy
PART 3 INSTITUTIONS as INEQUALITY SITES
Chapter 8 - The New Economy, New Inequalities
Introduction: A Brave New Work World
From Jobs to Joblessness: A Crisis in the Making
Rethinking Work: A Two Tiered Workplace
Diversifying the Workplace: Towards Inclusivity
Policing as Inclusivity in a Multiversal World
Chapter 9 - Education and Schooling
Introduction: Schooling as Inequality, Inequality as Schooling
Inclusive Schooling: Multicultural Education and Anti -racist Schooling
Universities in Crisis: Ivory Tower Inequalities
Remodelling the Academic Enterprise
Chapter 10 - Mainstream Media: Mediated Inequality
Introduction: Mediated Inequity
Media: Commercially Driven, Socially Constructed, Ideologically Loaded
Racialized Media, Mediated Racism
Towards Media Inclusivity
PART 4 - CHALLENGING SOCIAL INEQUALITY
Chapter 11 - Globalization and Global Inequality
Introduction: Globalization as Inequality, Inequality as Globalization
Framing Globalization as Social Inequality
Global Inequality Problems
Addressing Globlal Inequalities: Foreign Aid & (Under?)Development
Chapter 12 - Equality Matters Too
Introduction: Imagine no possessions… John Lennon
Conceptualizing Social Equality
Employment Equity: Illusions of Inclusion?
Toward an Inclusive Capitalism: People over Profits
As far as clichés go, challenging social inequality is an idea whose time has come. Social inequality is very much in the news, thanks to the combination of populist uprisings in (a) Arab countries during 2010/11, (b) the ‘anarchy in the UK’ riots later that summer and (c) the Occupying Movements that pitted the unruly 99 % against the excesses of the 1%. The gap between the have-it-alls and the have-nots – between exhorbitant executive pay packages and the stagnant household incomes of those whose wages have flat-lined - creates an adverse effect that puts people behind while pulling society apart (Mackenzie 2011). Astonishing levels of poverty in a resource rich Canada constitutes a profound source of embarrassment at home and abroad. No less embarrasing is the reality of highly skilled immigrants stuck in survival jobs; the persistence of women in full time employment earning just over 70 cents for every dollar earned by men (it’s a bit more complex than that); and the spectre of highly educated youth wallowing in the quintessential contradiction of the 21st century –a jobless economy of high unemployment yet serious labour shortages (Saunders 2011). Of particular note is mounting dismay over the scandalous conditions in many Aboriginal communities, including Attawapiskat along James Bay. That many Aboriginal peoples across Canada continue to living in squalor comparable to that of the global south is a scathing indictment of an unequal Canada that professes to be otherwise.
Clearly, then, Canada is a paradox. To one side, Canada commits ideologically to the principles of social equality and inclusivity for all Canadians. This ideological commitment translates into practice. Of 34 leading countries surveyed by the OECD’s Better Life Index (2011), Canada ranks second best to Australia in a weighing of eleven topics ranging from material living conditions to quality of life indicators, including health, life satisfaction, and work-life balance. To the other side is a Canada both deeply stratified and exclusive of the historically disadvantaged. Patterns of inequality are shown to be institutionally embedded, beyond most peoples awareness, harmful to the most vulnerable of society, and resistant to change. To another side, a more mixed picture appears. Canadians seemingly endorse progressive policies and inclusionary programs, yet many do not seem particularly perturbed by prevailing patterns of power, property, and privilege. The consequences of such ambivalence are unnverving: The attainment of social equality remains an elusive goal, in the process exposing the existence of obstacles that deter and divert, despite mounting indignation over the (il)legitimacy of spiralling gaps in determining who gets what, and why.
Not surprisingly, social inequality as theory and practice remains as controversial an issue in Canada as contested a topic within sociology. Its centrality in defining patterns of power, privilege, and property (wealth/income) informs the design and dynamics of contemporary societies in general, Canada in particular. For some, income inequalities are the price to pay for living in a dynamic economy, with avenues to advancement that class/caste bound societies can only dream about (Noah 2012). For others, any sharp spikes in social inequality compromise the prospects for a cooperative coexistence. The social blight of inequality may prove the root cause of nearly all the social unrest and socio-economic problems that plague society (Finn 2011; Wilkinson and Pickett 2009). Personal costs may prove debilitating: Intensely unequal societies impose an impossibly high value on (a) acquiring money and possessions, (b) consuming conspicuously, (c) looking good in the eyes of others, and (d) wanting to be famous. Yet these same priorities put people at greater risk of depression, anxiety, personality disorders, and shame and humiliation. Wilkinson and Picket (2009:3) capture the contradiction of emotional bankruptcy at a time of material abundance when they write:
It is a remarkable paradox that, at the pinnacle of human material and technological achievement, we find ourselves anxiety-ridden, prone to depression, worried about how others see us, unsure of our friendships, driven to consume, and with little or no community life…we seek comfort in over-eating, obsessive shopping and spending, or become prey to excessive alcohol, psychoactive medicines, and illegal drugs.
Social costs in terms of fairness or dysfunctionality pose a potential hazard. Gaping social inequalities may prove unsettling enough to destabilize any society polarized by massive gaps in the midst of plenty against the backdrop of a ‘power to the people’. No less consequential for global survival is failure to staunch deepening inequities because of material deprivation, resource competition, corporate globalism, sectarian violence, environmental disasters, and international migration. Indifference toward the presence of world-wide social inequalities may well torpedo the foremost challenge of the 21st century, namely, the prospect of living together equitably with differences (UNHD Report 2010).
Inequalities Matter engages with this troubling reality by offering a critically informed and sociologically insightful analysis of social inequality in Canada. In emphasizing both the politics and paradoxes of social inequality, as well as their patterns and practices, the book begins with the premise that complex human societies are sites of unequal relations (a) with respect to allocations of wealth/income, power, and privilege, (b) along the identity lines of race, aboriginality, gender, and class (among others such as age or sexuality), (c) across those institutional domains experiencing an identity crisis of confidence, including health and education as well as media, work, and family, and (d) as a contested site involving competition for valued resources. Patterns of social inequality are known to be socially constructed rather than natural or normal, yet expertly concealed to distract attention from internal contradictions and hidden agendas (Hacker and Pierson 2010; OECD 2011). The persistence and pervasiveness of these inequities anchor the overarching theme of this book: Canada is a fundamentally unequal society in terms of power, privilege, and property (wealth and income). The politics of inequality reinforce the importance of explaining how these patterned inequities are created, expressed, and sustained, in addition to how they are challenged and transformed by way of government policy, institutional programs, ideological shifts, and minority assertiveness. In putting this theme to the analytical test, Canada remains the focal point of interest. Nevertheless, its placement within a global framework as a player beyond national boundaries is equally important in analyzing the politics of social inequality (Korzeniewicz and Moran 2010).
Social inequality as concept and reality is central to any sociological analysis of society (Sernau 2011). Virtually every topic within sociology – from the introductory to the study of institutions ( ie. family, media, criminal justice) to interactional level analyses - is informed by and framed around the domain of inequality either as a site in its own right or as complicit in reproducing societal inequality. Sociology has much to offer in unpacking the politics that underscore the patterns and paradoxes of social inequality in shaping peoples’ identities, experiences, and opportunities. Debates over the causes, consequences, characteristics, and cures of social inequalities demonstrate how sociology can coax fresh insights from time-tested conventions and routines. Controversies involving social inequality rarely question its existence per se. The focus instead is on those dimensions of inequality that are (a) unjustified because they focus on irrelevant characteristics, (b) persistent over time or space, (c) entrenched within institutional structures and foundational principles, (d) supported by ideological beliefs, (e) rooted in the exploitation of others and restrictive of their lifechances, and (f) unresponsive to treatment. That each of these dimensions continue to baffle and infuriate sociologists reinforces the elusiveness of answers or solutions. Still, the benefits of a sociological approach are inestimable:
The study of social inequality is grounded in research results and empirical data instead of bombastic polemics or abstract theories.
(2) Attention is drawn to the social dimensions of inequality – from causes to cures. Instead of emphasizing the personal or psychological, a sociological lens reinforces the importance of situating social inequality within a societal framework, namely, how do the discourses and realities of social inequality impact on social reality and, conversely, how society and societal changes affect shifting inequality patterns.
(3) Social inequality is expressed not only in income (earnings) and wealth (assets) as well as privilege and power, but also in the domains of discrimination, political participation, institutional involvement, social exclusion, health and quality of life including vulnerability to violence, and violation of peoples’ rights (Green and Kesselman 2006; Wilkinson and Pickett 2009).
(4) Inequalities must be framed as multiple and complex and studied along intersectional and intrasectional (‘differences within differences’) lines to avoid either reducing one form of inequality to another or analyzing them in isolation from one another (see Walby 2009). Patterns of inequality are shown to intersect with other devalued markers of identity so that gender interlocks with race, class, and aboriginality to create overlapping hierarchies that amplify the exclusion or exploitation (a multiplier effect).
(5) Society and its institutions are neither neutral or passive. More accurately, society is gendered, racialized, and classed insofar as ideas and ideals about what is desirable and acceptable with respect to prevailing notions of gender, race, and class are deeply entrenched in society.
(6) There is nothing natural or normal about massive social inequalities despite vested interests to render them as inevitable and progressive. Rather gaping patterns of social inequality are socially constructed conventions created by those in positions of power to define what is normal, acceptable, and desirable. But what has been constructed, even if skillfully concealed behind a smokescreen of ideologies and mystifications, can also be challenged and transformed
As an introductory text, Inequalities Matter is mindful of the need to inform and inspire. This introduction offers the necessary building blocks - including definitions, relevant concepts and theories, recurrent debates, and contemporary issues - for analysis, assessment, and action. Emphasis is on fostering debates over the ‘what’, ‘why’, and ‘how’ so that references to social inequality resonate with student’s lived experiences. Instead of simply exhuming dry treatises or reciting sterile facts, Inequalities Matter enlightens by debunking those myths and misconceptions that serve to ideologically justify escalating patterns of social inequality (Heath 2009; Feagin 2011; Bush 2011). To achieve these goals, the concept of social equality is framed from a social problem perpective, with particular attention to questions of why it exists, what it looks like, what harm it inflicts, what needs to be done in minimizing this problem into manageable proportions. Last but certainly not least is attention to an equally important question: How to construct a more equitable society? Is this possibly utopian ideal to be achieved by tweaking the conventions defined by the rules or must it focus on changing the rules that inform conventions?
Ethical issues are raised as well since equality constitutes a core democratic value (Broadbent 2011). Is social inequaity good or bad? right or wrong? necessary or superfluous? Is it possible to justify the stratospheric salaries of sports superstars, high flying CEOs, and movie stars when millions grovel below the poverty line? Why is social inequality escalating to levels unseen since the Roaring Twenties? Do people really care that the super affluent are getting filthy rich while the poor are digging themselves into a hole (Cowan 2011)? Who is responsibility for solving the social inequality problem – governments or markets? In response to ethical concerns, the book capitalizes on a core sociological insight: Inequality is neither incidental to society nor the reflection of greedy individuals. Rather, society is inherently unequal because the foundational principles of its constitutional order (from values to structures) are ideologically slanted in advancing ruling class interests and realities of corporate capitalism. The end result is a systemic structural imbalance of power, privilege, and property that deprives Canadians of what they deserve (Fleras 2012). In others words, a comprehensive understanding of social inequality must go beyond a litany of problems, with its endless recital of negative facts. It must also address the concerns and contours of a more equal, just, and inclusive society – partly because its morally right in any progressive society that abides by human rights principles (Walker et al 2011).
The rationale behind Inequalities Matter draws on this simple yet crucial fact: the centrality of social inequality in peoples’ daily experiences and life chances is inescapable, even though few acknowledge their vulnerability to its effects, much less admit to their complicity in reproducing these inequalities that harm others (Schwalbe 2008; Sernau 2011). For some, social inequality and the unequal distribution of income and wealth possess redeeming value in creating richer lives and more productive growth (Noah 2012; 2011). For others, its an abomination and a blight on society (Wilkinson and Pickett 2009). Societies with greater income inequality tend to have higher rates of mental illness, obesity, violent crime, teenage pregnancy, and imprisonment rates. Or as bluntly put by Wilkinson and Pickett (2009) in their wildly popular book, The Spirit Level, social inequality may well prove the source of all social problems. The more equal a society, they argue, the better the range of social outcomes across a host of measures. In that sense, the title of this book is neither random nor arbitrary. Reference to the ‘matters’ in Inequalities Matter is a reminder that inequality is consequential because it causes something to happen – for richer or poorer, better or worse. And a more equitable Canada is not beyond the realm of the impossible, as movingly implored by the late Jack Layton, leader of the federal New Democratic Party:
Canada is a great country, one of the hopes of the world. We can be a better one – a country of greater equality, justice, and opportunity. We can build a prosperous economy and a society that shares its benefits more fairly. We can look after our seniors. We can offer better futures for our children. We can do our part to save the world’s environment…[W]e can be a better, fairer, and more equal country by working together. Don’t let them tell you it can’t be done. My friend, love is better than anger. Hope is better than fear. Optimism is better than despair. So let us be loving, hopeful, and optimistic. And we’ll change the world.
Jack Layton, excerpt from a two page letter written to New Democrats and Canadians on Saturday August 20, 2011 – less than 48 hours before he died.
SECTION 1 –
FRAMING SOCIAL INEQUALITY
Canada is a paradox. Inequality is deeply entrenched in Canada, and its pervasiveness and persistence in this lucky land is deemed an unwanted blot – not only in contradicting its ideals but also in sowing the seeds of social mistrust. Canada may be one of the luckiest countries in the world when it comes to living well, yet it is hardly immune to the harsh realities of inequality that supervalues the supernova few while undervaluing the marginal many. In that social inequality possesses the potential to destabilize Canada to the point of incoherence and chaos, concern is mounting over Canada’s future as a progressive society, especially if the obscenely rich are further isolated from the precarious poor (see also Freeland 2011)? The life chances of many Canadians are adversely affected by the centralization of power and resources in the hands of a power elite who benefit from the very dynamics that marginalize others (Grabb and Guppy 2009, Section 1). Moreover, social inequality is not only about economic privilege or material distribution (Grabb 2009). Peoples’ lives are affected by economic insecurity, as is their state of emotional and physical health, a personal sense of well-being and security, and their relationship to others and society at large (Cooke et al. 2008; Wilkinson and Pickett 2009).
Despite its centrality to society, the concept of social inequality is not well understood when applied to Canada or even in general. Much of the misunderstanding and misconceptions appear to reflect an improper framing of social inequality as (a) an aberration in an otherwise healthy and meritocratic society; (b) a largely individual phenomena in terms of success or failures; and (c) amenable to reform through quick-fix solutions. For sociologists, however, social inequality should be differently framed, that is, as (1) an inevitable component of any human society, (2) embedded within the structures of society; and (3) largely resistant to detection, let alone solvable through transformative change. In an attempt to secure an alternative way of framing social inequality – in part by separating reality from myth - this section conceptualizes social inequality along sociological lines. It begins with the assumption that the concept of social inequality must be taken seriously because it matters in making things happen. The section continues by demonstrating how the framing of social inequality in sociological terms is helpful, not only in advancing an understanding of the problem, but also for enhancing the prospect of solutions. It concludes accordingly: Deconstructing the concept of social inequality by problematizing the constituent terms ‘social’ and ‘inequality’. In between the chapters in this section provide an overview of how social inequality is expressed in Canada (and the United States) with respect to income, wealth, power, and privilege. Particular attention is also focused on competing explanatory frameworks that account for its origins and persistence.
The Inequities of Inequality
Learning Objectives or What You Should Know After Reading the Chapter
Introduction: Surveying Income Inequalities in Canada
Most Canadians are aware that income disparities exists. But fewer comprehend the depth and scope of these inequities, much less their impact and implications for Canadians and Canada. Compared to the stalled salaries that many Canadians have endured over the past 30 years, once inflation is factored in, the soaring incomes of sports figures, high flying entertainers, and CEOs and upper echelon money managers are truly mind boggling. Consider the following range of yearly earnings for Canadians at home and abroad:
Celine Dion earned just under $75 million per year during the 2000-2010 decade, largely from concert ticket sales and CD sales, putting her at the top of the Ultimate Decade list, just ahead of country singer Kenny Chesney and the jazz-rock fusion group, The Dave Matthews Band. According to annual rankings by Leonardo DiCaprio was the highest paid Hollywood actor in 2010 with earnings of $71 million, followed by Johnny Depp at $50 million and Adam Sandler at $40 million.
In contrast to 1972 when the figure stood at $25 000, the average NHL salary at the beginning of the 2011/12 season was $2.4 million. It would take most Canadian workers an entire lifetime to earn this amount (inflation adjusted[see Singer 2012).The highest paid players were Brad Richards of the New York Rangers at $12 million, followed by Roberto Luongo of the Vancouver Canucks at $11 million, Vincent Lecavalier of Tampa Bay Lightning at $10 million and Sidney Crosby of the Pittsburg Penguins at $9million. (For the record, the world’s best paid athlete in 2011 was golfer Tiger Woods who earned $90.5 million, followed by tennis star Roger Federer at $61.8 million and another golfer Phil Mickelson at $61.6 million.
The Prime Minister of Canada earns $317 584 including a car allowance of $2 112 per year. Why is the office of Prime Minister – arguably the most important position in Canada – underpaid in comparison to the earnings of entertainers or sports figures? President Obama of the USA earns $400 000 per year, in addition to $169 000 taxfree dollars to spend on travel, expenses, and entertainment. In 2009, the minimum salary for a major league baseballer was also $400 000 (increased to $414 000 in 2011). Lets take it to another level: The NBA’s popularity has never been greater (21.3 million admissions in the 2010/11 season), its revenues never higher ($3.8 billion), and players better paid (average contract is $5.36 million per year – the highest in any sport). Yet the league almost suspended operations because of a lockout as billionaires clashed with millionaires over the revenue sharing of sums incomprehensible to the normal paying customer whose earnings averaged around $US 46 000 per year
The highest paying job sector in Canada is a specialist physician. Annual income in 2010 was pegged at $179 514, followed by judges at $178 053, and senior managers of financial, communications, and other business services at $162 376.
The lowest paying job sectors are female babysitters, nannies, and parent helpers who earn $12 662. Is there a rationale to explain why sports figures and entertainers earn much more than those entrusted to care for our most important resources - namely, children? Next lowest are female dominated sectors including food and beverage servers at $13 861 and food preparers/service counter attendants at $14 681. The lowest paid male dominated job was parking-lot attendants who earn around $21 000 per year.
The average household income was $74 700 in 2009 according to Statistics Canada based on income tax returns filed that year. In 2009, average worker income was $42 988 (up from $11 800 in 1972), while the minimum wage income bottomed out at $19 877 (MacKenzie 2011). Neither of these figures has increased appreciably in the past 30 years, despite a doubling of Canada’s real economic output (Yalnizyan 2010). In fact, between 1980 and 2005, the median real wages of full time workers increased by only $53 dollars! (Dey et al 2011).
By contrast, average compensation (salary, bonuses, options) for Canada’s best paid 100 CEOs in 2009 was $6, 643 895. The ‘Great Recession’ may have wiped out billions of dollars of shareholder value. Nevertheless, Canada’s highest compensated 100 CEOs earned on average 155 times more than average full-time earnings ($42 988) in Canada. Let’s put it into perspective: By 9:04 AM of the first day back at work after the New Year, Canada’s top corporate executives will have out-earned the average worker for all of 2010 (MacKenzie 2011).
Did you know there are more millionaires in Canada than in any other G7country (Lam 2011)? For every 100 households in Canada, 12.6 possess total assets worth at least one million dollars (‘paper millionaires’) compared to 8.9 millionaire families per 100 households in the USA.
The rich keep getter richer. The richest 1 percent of all Canadians whose average income exceeds $405 000 received 32 percent of all real economic growth since 1987, accounting 13.8 percent of all Canadian market income in 2007, compared to a share of 7.7 percent in 1977 (Yalnizyan 2010). The richest one percent of Canadians have seen their share of income double since the 1970s from an extremely high base rate, triple for the richest 0.1 percent, and quintuple for the richest 0.01 percent.
Income disparities are one thing; wealth gaps are something altogether different. Its been said that the top 1 percent of Canada’s population own 50 percent of the country’s assets (or wealth), while the bottom 50 percent of the population owns 1 percent. In the USA, the median net worth of white households ($113 149) in 2009 is 20 times that of a black family and 18 times that of a Latino family (Whoriskey 2011). The weath of Asian American families dropped by $168 103 in 2005 to $78 066 in 2009.
More richer, less taxes. In 1948, the top marginal income tax rate of 80 percent was imposed on incomes over $2.37 million in today’s dollars (Jones 2012). Currently, the top federal tax bracket of 29 percent which kicks in at $128 900 and applies to everyone over that amount regardless of whether its $1 million or $1 billion. According to Canadian Centre for Policy Alternatives, adding two new tax brackets for incomes between $250 000 to $750 000 and another for those over $750 000 could generate $12 billion in new revenue in just three years – enough for a national child care program or national pharmacare program (Gordon 2011).
According to William Watson (2011), in 2009, the top fifth of income earners paid 62.1 percent of all income taxes, up 57.8 percent in 2000. People in the bottom fifth of the distribution received 56.5 percent of their income from government.
Canada has a reputation as a high tax country that deters the wealthy and businesses from relocating. But Canada has quietly emerged as a go-to destination, not only for the super rich looking to evade hefty taxation, but also for investors including nearly 12 000 under the Immigrant Investor Program, up from just under 5 000 a decade ago (Kirby 2011). The combined federal provincial top tax rate is 40.1 percent in Ontario (39 percent in Alberta, the same as average federal/state level in the USA, but 53 percent in Quebec) which kicks in at $128 800 (compared to $373 650 in the USA) (Kirby 2011)
The less well-off are increasingly shouldering the burden of taxes, although most Canadians believe everyone should pay their fair share i.e. the higher one’s income, the higher the tax rate. But despite claims that Canada has a progressive taxation system, a study by Marc Lee of the Canadian Centre for Policy Alternatives (2011) concluded that when all taxes are included (sales, excise, property, income), those Canadians earning less than $13 500 per year paid 30.7 per cent of their income in taxes, whereas those who earned $300 000 paid a slightly less burden of 30.5 per cent (McQuaig 2011b).
Moreover, according to a recent report by Lee, Ivanova, and Klein, entitled, B.C.s Regressive Tax Shift (2011), British Columbia has shifted the tax burden to people with lower incomes over the past ten years, while the wealthy pay a lower percentage of their income as tax than it did ten years ago. As a result of changes to the income tax regulations, the top 1 percent of BC households received $41 000 more because of tax cuts, the top 10 percent received just over $9 000, those in the middle got $1 200, and the lowest income bracket received an average tax cut of $200. BC has increased its intake from other tax sources (from sales tax to carbon taxes), but because these taxes charge everyone – rich and poor –at the same rate, they disproportionately affect the lower income of poorer families (hence the expression, regressive tax).
A study by Peter Diamond and Emmanuel Saez (2011) concluded that an optimal top marginal tax rate could be 70 percent since that percentage would generate the most revenue without reducing work incentives or increasing tax evasion (the current top marginal tax rate in Ontario is 46%. In theory, lower taxes create more investments and competitive cost structures create more demand for good paying jobs (Yalnizyan 2012. In reality, gutting the progressive tax system may accelerate deeper cuts to government programs, while profitable firms threaten workers with factory closures or insourcing temporary foreign workers if they don’t accept lower wages [McQuaig 2012])
This admittedly selective review is both informative yet dismaying. It demonstrates how comparisons in income and wealth exposes the paradoxes of inequality in Canada. Several questions should come to mind? Why is there so much income inequality in a country with (a) one of the world’s highest standards of living, (b) a robust economy that ranks among the best in the industrial world, (c) a national commitment to equality as a Canadian value, and (d) a host of government programs to alleviate economic stress (OECD 2011)? Why is Canada experiencing one of the most rapid increases in income inequality among all OECD countries (Conference Board of Canada 2011)? How do we account for these income differences? Are they justified? On what grounds? Is there any justification – either sociological or ethical/moral – to account for why hundreds should earn billions while thousands rely on food banks? Is there a connection between the enrichment of the rich and the impoverishment of the poor? Are these discrepancies a social problem at odds with being a Canadian? Or are widening income gaps consistent with the free market principles of supply and demand in a competitive meritocracy? Is there any theory of distributive justice that would justify the exorbitant salaries of executives, athletes, and entertainers? Its immoral, McQuaig and Brooks (2010) argue, and yet no political party – not even NDP – seems interested in making social inequality a political issue.
Of these questions, three are uppermost: First, why did these massive and growing gaps originate and continue to expand most exponentially for those at the top? What is it about Canada’s culture, government, and economic system that allows a small number of people to accumulate massive amounts of income, wealth, and power, while many others languish in poverty or at the margins (McQuaig and Brooks 2010)? Why do governments pursue neo liberal policies that tend to marginalize the vulnerable, then turn around and blame the marginalized for failing or rebelling? Second, why have Canadians generally accepted these realities as unproblematic rather than rioting in the streets in protest over the injustices? After all, the dazzling lives and profligate lifestyles of billionaires are not simply some statistical aberration. They constitute an affront to the concept of Canada as an egalitarian society, while sowing the seeds of distrust and divisiveness. Third, does it matter? Concentrated inequality matters because it reverberates throughout society threatening the social order, the quality of life, and the very functioning of democracy (McQuaig and Brooks 2010). A consolidation of economic power may dampen mass consumer demand – the oxygen that makes economies work – especially when the economic elite are reluctant to play a more productive role in economic recovery preferring, instead, to play the financial markets of mergers, acquisitions, and more speculation (Lansley 2011; 2012; van Gelder 2011).
In short, inequality matters, albeit in ways that are yet unknown or underappreciated. But the costs and consequeneces are better known and often experienced. The words of the prominent American sociologists, Jonathan H Turner (2000:62) are chillingly prophetic in light of populist upheavals around the world from North Africa to England to the United States “Inequality is a tension-generating dynamo; it sets into motion individual misery and social pathologies, such as high crime rates, unstable families, dependence on drugs, domestic and civil violence, and ethnic and racial conflicts, which become difficult to contain”. In an effort to coax critically informed responses from these admittedly vexing dilemmas, this introductory chapter not only surveys patterns of social inequality in Canada. It also delves into those sociological assumptions that underpin the study of social inequality in general, Inequalities Matter in particular.