Federal leaders must focus on troubling economic trends

(Oct 11, 2007) -- 'Lost jobs, stagnating wages, historic gap between rich and poor. These are the types of trends that can pull a country apart at the seams.'



As our political leaders get ready for a new session of Parliament, with a throne speech and thus a new government mandate, there are three troubling economic trends they can’t ignore. Actually, these trends I refer to are more than just troubling. They’re the types of trends that can pull a country apart at the seams. Here’s a quick summary.

First, we’re losing our best paying and highly-skilled manufacturing jobs at a rate that should have the alarm bells ringing in Ottawa. Over the past five years, Canada’s economy has lost over 300,000 of its best-paying jobs and continues to lose hundreds more every week. These were jobs that helped people raise healthy families and have a good retirement. They came with decent incomes that supported local businesses and paid for social services that raised everyone’s quality of life.

Second, real wages in Canada have stagnated or declined for decades. A recent study by the Canadian Centre for Policy Alternatives (CCPA) called Rising Profit Shares, Falling Wage Shares, reveals that real wage gains (wages adjusted for inflation) for the vast majority of Canadians were virtually non-existent through much of the last thirty years. It seems hard to believe, but the data suggests that after decades on the job, for most Canadian workers, their paycheque buys them the same, not more.

Perhaps most disturbing is that real wages have decreased for the lowest paid workers (those earning minimum wage) over the last thirty years. Depending on where you live, working at minimum wage full-time, all year round, will leave you living below the poverty line. Our federal leaders would certainly be reacting quickly if the stock market had been handing out stagnant or declining returns for the past thirty years.

Third, the wealth and income in Canada are becoming increasingly concentrated in the hands of fewer people. Reports continue to come in indicating the gap between the rich and the poor in Canada is reaching historic proportions. In 2004, the richest 10% of families raising children earned 82 times more than the poorest 10%. In after-tax terms the gap is at a 30-year high. In other words, Canada is becoming a radically less equal society.

Prosperity not being shared

No serious economist disputes these trends. But they’re truly remarkable when you think about the context. Canada’s economy has doubled in size since 1981. Our fiscal situation has improved to one of the strongest in the OECD today. We are now the ninth richest nation in the world. Canadian workers have improved their education and productivity and helped grow the economy.

Despite all of this, all of which should ensure greater prosperity for every Canadian, our country is facing a job loss crisis, wage stagnation and wealth stratification. Clearly, the rising economic tide has not lifted all boats. Canada is simply not doing a very good job of sharing its prosperity.

It will be impossible for our political leaders to ignore these trends forever. It is, obviously, a matter of financial survival for thousands of Canadians and their families. No doubt they’ll make their voices heard and their votes count. But these economic trends raise more profound issues for Canada, issues of equity and social cohesion, issues that affect the very temperament of our country.

The kind of inequality developing in this country is a potential nation-busting tragedy. We’re headed towards a secession of the affluent, in which the richest Canadians opt out of the rest of Canadian society. This would pull our country apart at the seams because it would destroy the sense of common purpose that binds all Canadians together.

I worry that Canadians of the future will never know the kind of Canada I grew up in, where, for example, we all received care at the same public hospitals and attended the same public schools. We had a sense of kinship and formed relationships of trust based on our shared experiences. Of course some families had more money than others. But the playing field was more level than it is today and as a result we all grew together.

Canada needs a plan

So leveling the economic playing field is essential not just because it will help struggling families do better. It’s also absolutely fundamental to preserving everything we stand for as a country. The choice is to go forward together as a unified society, or suffer the consequences of a society of vastly diverse economic groups suspicious of each other and our future together.

The contrast is as clear and basic as can be. Our federal leaders must use the next session of Parliament to devise an economic plan that will ensure we all start growing together again.

James Clancy
National President 

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