At the recent Central 1 conference and AGM I listened to economists provide updates and, somehow, the growth in inequality got little attention. Although Helmut Pastrick, the Chief Economist at C1, did provide a recent analysis showing the job growth in BC (and Ontario), but he did not observe that it has been where wages are mostly below the overall average level, in other words low-paying jobs. This is in stark contrast to elsewhere in Canada.
Perhaps the biggest issue facing our province, and Canada, is inequality – of incomes and wealth. The past three decades have been very good for BC’s ‘propertied class’, but others have stagnated or drifted downwards. Only housing affordability is front and center, but even there action is limited and slow. Averages and aggregate numbers may look good, however they disguise the realities facing the bottom half.
A feature in today’s Globe and Mail provides a vivid overview of the precarious situations confronting many people. Young families, renters, seniors and many others are being stressed. It is clear that measures like an increased minimum wage, higher social assistance payments, housing subsidies, and more effective taxation of wealth are needed. Even a local business economist has endorsed the latter. Jock Finlayson of the BC Business Council is quoted in the Globe. “In the business community, we are worried about it, it’s forcing people to look at living elsewhere. It’s forcing people with children to live in accommodations that are not really designed for families,” he said. “Those who are established in the market have all enjoyed an unearned windfall in wealth. It’s also tax free. How equitable is that, from the perspective of the 30 per cent of renters, or those who bought at top-dollar prices?”
The Vanishing Middle Class is a big issue in BC and in the US. A recently published book from MIT academic Peter Temin paints the graphic picture. There is a good review and summary is available at Evonomics. As Temin observes, and Lynn Parramore emphasizes, these diverging populations are at the heart of political discontent that has already surfaced and the problem will demand attention.
Indeed, the system is currently rigged to benefit those who are at the top of the pile. And as government policy has caused the problem, government policy is also the way to correct it. I was disappointed that this issue got essentially no elaboration or debate at our credit unions’ annual meeting.