Wednesday, 7 December 2011
Inequality's back in the economic conversation
Following concern expressed by the IMF, the Conference Board and of course thousands of protesters around the world, the OECD has just released an extensive 400 page report on the problem of growing inequality: Divided We Stand: Why Inequality Keeps on Rising.
here are some of the conclusions for Canada:
It calls for a focus on
- inequality in Canada is above the OECD average, but still below levels in the US
- the rise in inequality is largely due to increased disparities in labor earnings, but also due to less redistribution
- taxes and benefits play a smaller role in reducing inequality in Canada than in most OECD countries: prior to the mid-1990s, they offset more than 70% of the rise in market income inequality, now it’s less than 40%
- the richest 1% saw their share of income rise from 8.1% in 1980 to 13.3% in 2007
- more and better jobs,
- investing in human capital, starting at early childhood level and with more life-long learning
- reforming tax and benefit systems with an increase in the share paid by wealthier individuals
- providing free and high quality public services
(Sanger, Toby (Dec. 5, 2011). "OECD on Inequality". Progressive Economics Forum.)
Now, of course, I know that one should always be careful when trying to figure out the what causes what, but I have a pretty strong hunch that we wouldn't be hearing about socioeconomic inequality in the news and from major international economic institutions so much had it not been for the Occupy Movement. Seems like the best explanation for why economic talking heads suddenly have started caring about the gross inequality and high joblessness in Anglo-American countries and eased down on shouting about how disastrous a recession-induced cyclical deficit is and how important the daily ups/downs on the stock market are.
Job well done, Occupy folks.