Feb. 13, 2013 - Issue #904: The Sugar Trade
Political Interference
Inequality rising
Premier's Economic Summit should have focused on rich-poor divide
Three hundred Albertans, ostensibly from all walks of life, got together on February 9 at an invitation-only summit to discuss Alberta's economic future. Although a significant majority of those present came from corporate-funded right-wing think tanks, industry groups, large corporations, and Alberta's academic right, there were also a handful of union leaders, non-profit organizations and community groups represented.
Given the neoliberal leanings of most of those in attendance, it is not surprising that the conversation, which was supposed to focus on Alberta's economic future, revolved largely around right-wing speaking points: more pipelines, increased efficiency in public services, the merits of a sales tax versus a progressive income tax system, public-private partnerships and downloading of human services to non-profits and the voluntary sector.
What is surprising, however, is that in a summit focused on the economy, there was virtually no talk of what the International Monetary Fund (IMF) has recently characterized as the biggest threat to economic growth in rich jurisdictions—growing inequality.
In the last couple of years, not just the IMF, but also the World Bank, the Conference Board of Canada and numerous other organizations have pointed to a direct link between growing inequality and reduced economic growth. As the gap between a jurisdiction's wealthy and everyone else increases—and the middle class disappears—the economy slows down.
Other researchers, most notably Richard Wilkinson and Kate Pickett in their book The Spirit Level: Why More Equal Societies Almost Always Do Better, also draw direct links between inequality in rich countries and a series of social ills: from reduced life expectancy and reduced health to higher levels of domestic violence, crime rates and drug abuse. In essence, more equal societies not only perform better in terms of economic growth, but also in terms of virtually every measure of societal well-being out there.
So if Premier Alison Redford is sincere about her desire to have a conversation with Albertans about the future of Alberta's economy and the structure and funding of our social services, it is blatantly irresponsible not to dedicate a significant portion of that conversation to the topic of how we deal with inequality.
This is especially the case in light of analysis by the Canadian Centre for Policy Alternatives and the Parkland Institute of data released by StatsCan at the end of January showing that Alberta has become, by far, Canada's most unequal province, and Calgary its most unequal city.
The analysis shows that between 1982 and 2010 the real incomes of the top one percent of earners in Alberta have increased by $320 000, while those of the bottom 90 percent have grown only by $3900. In Calgary, the top one percent saw their incomes grow by a whopping $570 000 over that time period, while the bottom 90 percent only saw a $2000 jump over the same 28-year-period.
As a result of this unequal growth, Alberta's richest one percent now make 18 times more than the bottom 90 percent, up from 10 times more in 1982. In Calgary the inequality is even more startling, with those at the top now making 26 times more than the bottom 90 percent. Edmonton has also seen a significant rise in inequality over the last 28 years, although nowhere near as drastic as Calgary's.
Unless something is done to reverse this trend, then inequality in Alberta will go nowhere but up. And as the research makes clear, that will only result in a stagnant economy, a reduced quality of life for all Albertans and a long list of destructive and expensive social ills.
To date, the Premier's conversation on Alberta's economy has been focused exclusively on the bottom line: what is the right mix of revenue growth, spending cuts, privatization and downloading of services required to balance our books in the short term? But that's the wrong conversation and the wrong question. Given the current statistics and trends—and the overwhelming consensus of research on the negative impacts of growing inequality—the question we should be asking is how do we restructure our tax system and improve our services to ensure maximum redistribution of wealth, increased opportunity and a more equal society over the long term? If that's not the conversation we're having, then we are really not going anywhere. V
Ricardo Acuña is the executive director of the Parkland Institute, a non-partisan, public policy research institute housed at the University of Alberta.
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