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Opinion

The Occupy Movement: A Lesson in the Risk of Inequality

Published on 23/11/2011

The Occupy Wall Street movement has puzzled many people. The lack of organization, elaborated message, or visible leaders has left some people asking for more, and the presence of young people with no clear political or social agenda in the tent parks has left others wondering if it is just a dropped-out caravan.

The simple message of the 99% facing off against the 1%, the vast majority against the very rich who have corralled the bulk of the wealth created in the last quarter century, seems pretty clear, but is portrayed as not enough of an analysis.

But the data doesn’t lie. The gap between the richest and the poorest has been growing, as has the gap between the richest and the rest. And in the developed world the middle class has been disappearing.

Maytree’s belief has always been that inequality breeds instability. Along with mass migration and environmental degradation, inequality within and between nations creates the breeding ground for insurrection and crime on one hand, and poor health, low productivity, and social torpor on the other.

Canada has the good fortune of having active think tanks who have been working on these issues. The Caledon Institute of Social Policy over its twenty-year history has created innovative policy like the Child Tax Benefit to close the income gap, and its proposed new architecture is a practical approach to adult income supports (Towards a New Architecture for Canada’s Adult Benefits, Ken Battle, Michael Mendelson and Sherri Torjman, June 2006).

The Mowat Centre at the University of Toronto’s School of Social Policy and Governance has just produced a study of Employment Insurance. The working group was co-chaired by Maytree president Ratna Omidvar and former Saskatchewan premier Roy Romanow, and the project was led by Mowat Centre director, Matthew Mendelsohn. The report illustrates the inequality of treatment Canadians receive across the country in their access to EI benefits, and makes a series of strong recommendations to increase fairness and make the program truly workable.

The C.D. Howe Institute has also done work recently on EI reform, advocating too for the abolition of regional eligibility criteria.

Despite this good policy research and increased public awareness, Canadian governments seem less concerned in recent years about growing income inequality. Both business and government mantras focus on driving down costs and seeking austerity, with much of the brunt being born by employees who find wages and salaries stagnating or retreating.

Government policy, and the focus of many social agents, has been focused on income redistribution, conceptually moving money from big pockets to small ones, which in reality has moved money from medium sized pockets to small ones. Less attention has been paid to the initial distribution of incomes, to making sure that people are paid living wages at the lower end of the scale, and not paid egregiously at the upper end.

The debate has taken place with a sense that little other than fairness or merit is at stake, depending on your point of view.

But the stakes might be higher than we think, and the Occupy movement may be the harbinger of more serious discontent. Some have linked Occupy with the Arab Spring and the violent overthrow of kleptocratic tyrants, and they have been branded as dramatics or hysterics.

We remain persuaded that inequality breeds instability. And instability can have unpredictable outcomes. Paying closer attention to some of the equality remedies arising from Caledon, Mowat and others seems like a good risk remediation strategy.

Summary

Canadian governments should pay attention to growing inequality and to the policy solutions that might mitigate the risks it brings.

Topic(s)

Income security, Poverty