Douglas Todd: 'Crisis' of wealth inequality simmers during this election
Credit to Author: Douglas Todd| Date: Thu, 19 Sep 2019 14:00:05 +0000
The distraught veteran told would-be Democratic Party presidential candidate Bernie Sanders last weekend, while the cameras blazed, that he was going to kill himself.
Suffering from Huntingdon’s Disease, the veteran told Sanders he had no money to settle his US $139,000 medical bills, since his insurer decided it was no longer covering their cost. “I can’t (pay). I can’t. I’m going to kill myself.”
The veteran’s painful outpouring in front of Sanders, a champion of egalitarianism, provided a harrowing exhibition of the ongoing crises of chaotic health insurance and economic polarization in the U.S., which, despite being the world’s major power, is grimly ranked as having one of the largest chasms between poor and rich.
While the gap between the well-off and the rest in Canada is not as extreme, it is still troubling. Inequality has been growing north of the border since the 1990s. Economist Francis Fong reports the divide has especially widened in the country’s fastest-growing cities: Calgary, Toronto, Montreal and Vancouver.
The United Nations, World Bank and others say there is a “crisis” of wealth inequality in industrialized and developing nations. Meanwhile, a spate of new health studies show individuals suffer emotionally and physically because of inequality — and even from the perception of it.
Politicians are paying close attention. In the U.S., Sanders is among the most vocal in pushing for income redistribution. And in Canada, despite universal health care, the Liberals, Conservatives, NDP and Greens seem to be competing this election campaign to offer new ways to address the rich-poor gap, which currently sees the top 20 per cent of Canadian households holding 66 per cent of the country’s wealth.
In the midst of all the promises, U.S. psychologist Keith Payne, author of The Broken Ladder: How Inequality Affects the Way We Think, Live and Die, has found that “feeling poor” might be worse than actually being poor.
Probing how humans crave status through self-comparison, Payne offers evidence that simply feeling one is on the low rungs of the ladder contributes to eating more bad food, having more children, planning less for one’s future and, based on a Canadian study, gambling more recklessly.
Keith Payne, U.S. psychologist and author of The Broken Ladder: How Inequality Affects the Way We Think, Live and Die.
Payne remembers the day in Grade 4 he discovered he was poor: When he realized he was getting a free lunch in the school cafeteria, while others were paying. Then he noticed other kids dressed better. He responded by becoming painfully shy. “Inequality,” he now realizes, “makes people feel poor and act poor, even when they’re not.”
Payne’s book builds on ground-breaking research showing, surprisingly, that everyone suffers in highly unequal countries, regardless of whether they’re at the bottom or top of the economic ladder.
With bigger wealth gaps come worse rates of murder, obesity, ill health, anxiety, depression and life expectancy — across financial classes, say epidemiologists Richard Wilkinson and Kate Pickett in The Spirit Level: Why Greater Equality Makes Societies Stronger.
How does Canada rank for wealth inequality?
We tend to be in the middle among advanced industrial nations, even while there are many ways to measure the gap and overall standards of living have risen globally, with most now owning TVs and cellphones.
The UN finds Canada generally doing better on inequality than the U.S. (even though the latter’s relative incomes are significantly higher). We’re also faring better than Portugal, Australia, Italy, South Africa, Mexico, Brazil and China. But we’re more unequal than Germany and the Netherlands, and lag considerably behind Sweden, Denmark, Norway and Japan.
The Economist recently reported that Canadian inequality has never recovered from the recession of the 1990s, when Brian Mulroney and later Jean Chretien were prime ministers.
“The 40 per cent of the Canadian population with the lowest incomes now have a much smaller share of the total, while that of the top 10 per cent has risen sharply,” it says. Canada’s middle class was pummelled in the 1990s, with inequality levels getting worse, then staying flat in the 2000s through the eras of Stephen Harper and Justin Trudeau.
B.C. and Metro Vancouver have been hit hard by inequality, particularly in regards to unaffordable housing. Knight Frank, a global real estate consultant, ranks Canada and Vancouver as among the most likely places that the world’s ultra wealthy — those worth at least $30 million — want to move to.
Vancouver has been dubbed ‘the supercar capital of North America,’ with experts in life satisfaction suggesting ostentatious displays of privilege contribute to stress among those who witness them.
Strong demand for Metro Vancouver housing, including as investments, has priced out many recent immigrants (who are statistically not doing as well as they did in the early 1990s) and others who try to pay for their shelter on local wages, which are limp.
A sign of increasingly unequal times lies in how Vancouver has been dubbed “the supercar capital of North America,” with experts in life satisfaction suggesting ostentatious displays of privilege contribute to stress among those who witness them.
Canadian politicians are promising to do a lot about inequality, while rarely mentioning the actual term.
Trudeau, who made protecting the middle class his electoral brand, brought in the Canada Child Benefit, which gives families on the lowest incomes $5,600 to $6,600 a year. Trudeau also once pointed out 40 per cent of Canadians don’t pay any income taxes.
And last week Trudeau pledged to follow the lead of the once-criticized B.C. NDP and institute both a Canada-wide foreign buyers tax on housing as well as a speculation tax aimed in part at “satellite” homeowners, who earn most of their wealth outside the country, where it’s not subject to Canadian income tax.
This week in Surrey, meanwhile, Conservative party leader Andrew Scheer said he would cut the income tax rate on those earning under $47,000 a year. He’s also committed to retaining the Child Benefit, adding more to Registered Education Savings Plans and making energy costs, children’s transit passes and maternity benefits tax free.
The NDP, under leader Jagmeet Singh, are sounding like bold foes of inequality, promising a one per cent wealth tax on fortunes worth more than $20 million, plus “head-to-toe health care,” including coverage of all dental, eye and mental health services.
Elizabeth May, head of the rising Greens, however, has criticized the NDP’s plan of free dental care for everyone as far too costly. Instead she’s talking about establishing a guaranteed liveable income by 2030.
Canadian voters will have to decide in October which new promises they can afford. Or, if they’re mostly concerned about reducing inequality, which promises they can afford to ignore.
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