We asked, you voted: what are the next eight discussions Canada needs to have?
The Globe held a live discussion Monday, Dec. 20 on one of your top choices: ending poverty.
Earlier this month, the Canadian Centre for Policy Alternatives released a report showing that inequality is growing in Canada. This generation of rich Canadians now takes a bigger cut of the action than any previous generation. What's going on, how is this different than usual and what can we do about it?
Armine Yalnizyan, a senior economist with the Canadian Centre for Policy Alternatives, will take your questions. Ms. Yalnizyan joined the CCPA in 2008 to advance the work of the Growing Gap project. She has tracked trends in labour markets, income distribution, government budgets and access to services for over 20 years.
She also contributes to The Globe and Mail's Economy Lab.
The chat has now concluded, but you can review the transcript below.
Natalie Stechyson: Welcome to today’s live chat on solving poverty - the fifth topic in an eight-part series on the next discussions you think Canada needs to have. I’m Natalie Stechyson - one of The Globe’s online editors. I’ll be hosting today’s chat with Armine Yalnizyan. We’ll be getting under way momentarily. In the meantime, please start submitting your questions.
Armine Yalnizyan: Hi Natalie. Glad to kick off the week with such an important conversation.
Natalie Stechyson: Thanks for joining us, Armine. I'll post the first question in a few minutes.
Natalie Stechyson: Let's get started. How much can poverty rates in Canada be accounted for by income inequality?
Armine Yalnizyan: Well Natalie, international statistics show that poverty rates are lowest where income inequality is lowest too. That can be because of culture -- the wage spectrum is compressed, as in Japan, where it is unseemly to get too far ahead of others in pay -- or through active redistribution programs, where taxes and the services they buy redistribute incomes and opportunities to try to level the playing field a bit more.
Natalie Stechyson: Is income inequality any different now than, say, 20 years ago?
Armine Yalnizyan: There has been a sea of change in inequality in Canada over the course of the past 20 to 30 years. For most of the 20th century inequality in Canada - and in virtually all developed nations, actually - had been declining. By the 1980s that long term trend reversed. First because of recessions (where the bottom end of the spectrum lost ground) then because of rowth (when the top part of the income spectrum zoomed ahead). So for the past generation inequality has grown in Canada, in good times and bad.
Comment From Paul de Groot: Hallo. It seems that income inequality is an ominous trend in Canada, and certainly damages the myth that Canadians cherish about themselves. Namely, that we live in a fair society. My questions is whether or not this will become an entrenched phenomena in Canada. The impact on the succeeding generations is certainly concerning to me. Is it possible, in your view, for succeeding generations to reverse this trend. The demographic component also factors in here I believe.
Armine Yalnizyan: That's the central question Paul, as growing inequality is, at some point unsustainable. There are two reasons for hope. One is, oddly, the result of an aging population and the consequent shrinking pool of workers, which may push up wages for workers producing basic goods and services, not just those at the top of the skill spectrum. The other is a culture shift, where a growing number of boomers understand what is at play and start working with others to come up with ways to ensure there will be a resilient middle class for the next generation.
Comment from Carol-Anne Hudson: Dear Armine, One solution often offered to the problem of this growing wealth gap is a mandatory living wage. However, many businesses reject this solution because of the "employment effects of rising wages". Please explain what this means and the debate surrounding it as well as (to your mind) the usefullness of such a policy in the fight against poverty. Thank-you. Carol-Anne Hudson (PhD Candidate Political Science McMaster University)
Armine Yalnizyan: Hi Carol. When the cost of something goes up, we tend to consume less of it. So, since living wages are higher than minimum wages, employers are likely to hire fewer workers. A living wage campaign is part of the effort to raise the visibility of a sorry development in Canada. The saying that "the best social policy is a job" is in many ways true; but a new reality has developed over the past decade or so - that you can't necessarily escape poverty by working. Working full-time full-year at a minimum wage job, as many adults do, condems you to poverty.
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