There has been much handwringing over the claimed disappearance of the middle class. From a bestselling international tome to domestic tax-and-spend types who think higher taxes will create more middle-income earners, there is no shortage of those who over-focus on redistribution and underestimate the benefits of opportunity.
Thomas Piketty's book, Capital in the Twenty-First Century, is a global best seller that has attracted more reviews from academics and public intellectuals than any other economics book in recent memory.
Responses from a number of prominent Canadians to the Fraser Institutes recent study, Measuring Income Mobility in Canada, reveal a great deal about the differing views on social policy and the state of the debate regarding inequality.
Given the debate over the past few years about income inequality and the fact that many people do not consider how the income of individuals change over time, our recent study Measuring Income Mobility in Canada provides fresh evidence on how the incomes of Canadians change over the course of their lives.
The perennial debate regarding income inequality ebbs and flows but never disappears. For a variety of reasons, including the backlash against corporate bailouts in 2009 (well deserved), the election and re-election of Barack Obama, and a deluge of reports spanning the political spectrum, income inequality has vaulted to the front of the publics concerns. Unfortunately, the discussion of inequality is almost always fundamentally misstated because it ignores income mobility.
Its hard to blame Canadians for believing the great myth of income stagnation given the continuous stream of reports pointing to the low growth in average incomes over the past several decades.
With public opinion now turning on the protesters, we dont know what the future holds for Occupy Vancouver. But looking beyond the multi-coloured tents, creatively captioned picket signs and sporadic chants, one concern shared by the protesters seems to be a perceived lack of opportunity for young Canadians. And you cant blame them. We are, after all, bombarded by claims of stagnating incomes, a lack of opportunity not faced by previous generations, and, of course, the old cliché that the rich are getting richer while the poor stay poor.
The gap is growing! The gap is growing! The rich are getting richer. And the poor, well, they just remain poor. At least thats what one would gather from the hysteria reported in the media on the latest Conference Board of Canada report on income inequality.
With headlines screaming Canada becoming a nation of haves and have-nots and the Canadian dream is out of reach for an increasing number, its plain to see why young Canadians might be filled with angst at the prospects that they can no longer shape their economic future.