It’s time to stop feeding the rich

There are some headlines and news stories one would expect to see during a difficult economic recession like the one we are experiencing now.

For instance, there’s the usual food bank story. As Canwest News reported a couple weeks ago, “Canadians [are] turning to food banks in record numbers.” Reads the story, “An increasing number of Canadians, many of whom have jobs, are turning to food banks to help ward off hunger, according to a new report that says usage jumped by a record 18 per cent in 2009.”

Yet another story chronicled Canada’s inability to reduce child poverty despite an all-party agreement in Parliament to do so… 20 years ago. “One in 10 Canadian kids living in poverty,” reads the headline on a CBC story from last week: “Canada’s child poverty rate has improved ‘slightly’ but the gap between rich and poor continues to grow, says Campaign 2000’s annual report card on child and family poverty.”

Then there’s a story one doesn’t quite expect to see during an economic crisis, but which makes perfect sense when you think about it. It’s headlined, “Richest Canadians Get Richer,” and reports on the annual tally by Canadian Business magazine of Canada’s richest 100 families. Despite the hard times, the magazine says there are now 55 billionaires in Canada, up from 53 in 2008. The total net worth of the richest 100 managed to grow to an estimated $172.7 billion, which is up almost five per cent from $165.1 billion in 2008.

How, one might wonder, could their wealth grow so substantially over a year in which manufacturers shuttered plants, office buildings cleared out desk workers and the stock market took a precipitous dip?

One reason is that wealth does not simply evaporate. It migrates. And when companies shed payrolls, the money from those eliminated salaries is concentrated in fewer hands while increasing the workloads of those “lucky” enough to keep their jobs. And don’t expect a raise for doing twice the work as you used to do. That would be greedy.

Add in the tax-cutting ethos for both the rich and corporations over the past few years, and wealth is becoming ever more concentrated. When one has serious capital, one doesn’t pay taxes like the normal working stiff – indeed, capital gains taxes in Canada are now a fat, round number: zero.

That’s one reason why inequality between rich and poor in Canada grew more over the past decade than in any country in the Organization for Economic Co-Operation and Development except Germany, according to a 2008 OECD report. And this, during two decades of almost continuous economic growth and prosperity.

Native people in Canada, not surprisingly, bear the brunt of this poverty. Fully one-quarter of aboriginal children, and nearly half of those living off-reserve, are poor. Meanwhile, 40 per cent of all low-income children had at least one parent working full-time, which puts the lie to the common slur that the poor are that way because they are too lazy to work.

No, the real reason poor people are that way, as trite as it may sound, is because they don’t have money.

In other words, the earning power of lower-income folks since the advent of right-wing economics has not kept pace with the increase in the cost of living. This basic fact destroys the arguments of those who blather on about the trickle-down theory. But still it doesn’t matter to those with power in our society: this is exactly how it is supposed to work.

Since the 1980s, we have taken part in a vast transfer of wealth from the working and middle classes to the wealthiest in our society. It’s Robin Hood in reverse.

It’s also disastrous economics, as the situation in the United States illustrates perfectly. The only way people could maintain the middle class lifestyle to which they had become accustomed was to accumulate household debt during this strange period of stagnating incomes in a booming economy. The debt bubble collapsed, inevitably, and it’s hard to imagine how our American neighbours are going to solve their mess without wholesale economic and political reform.

Happily, in Canada and especially in Quebec, we have not travelled as far down this slippery slope. Our economy has not been nearly as hard hit for the simple reason that more people have money to spend and create economic activity.

But the direction is clear. And unless we change course and advocate a higher-waged, full-employment economic policy, we are headed for a dark and dismal future as a society.

Solutions to our still-substantial economic problems will not be found in repeating or intensifying the same policies that have failed so miserably over the past 20 years.

Campaign 2000, which was formed to build Canadian awareness and support for the 1989 all-party House of Commons resolution to end child poverty in Canada by the year 2000 (hence its continuing reason for existence), has several modest and easily accomplished recommendations to help begin reversing the tide.

Among them:

•    Restoring employment insurance eligibility requirements to 360 hours.

•    Increasing the federal minimum wage to at least $11 per hour.

•    Increasing funding for aboriginal child welfare services.

•    Creating universal childcare.

But to get there, to begin growing a sustainable economy and healthier communities, we have to face a basic fact: We must reverse the concentration of our country’s wealth in the bank accounts of a few unimaginably rich people. Because, as my collection of headlines at the beginning of this piece demonstrates, we all get poorer when the rich get richer.