In light of Occupy Wall Street and the spinoffs that are growing in many other cities, there have been a large number of excellent articles and studies going around looking at the top 1% of income earners in the United States. I have included links to some of them below.
This U.S. focused reading got me thinking about Canada’s place in this all this, and the conventional wisdom about how much more of an equal society Canada is.
An article in the Guardian back in May entitled Top income earners: are they getting richer? See the data examined the World Top Incomes Database published by the Paris School of Economics. From this data, I created this chart to compare the incomes of the super-rich in select countries over the past 25 years.
While it is true that Canada’s top income earners do not earn as much as their rich American counterparts, the differences are not quite as stark as one may have thought. Further, when compared to many other countries, Canada, the U.S. and a select few other countries are nestled in a league of their own when it comes to compensation for the rich.
A further interpretation of the data shows which country’s rich people have received the greatest increases in the share of the income pie as the years pass by:
Canada is once again in the top 3. The rich are getting richer everywhere, but if you are hoping to be a multiple yacht owner, some places are more welcoming than others, and Canada seems to be one of them.
Ok, the rich are getting much, much richer, but isn’t it because they are building the economy and bringing everyone riches too? A rising tide raises all boats and all?
A quick look at one (of many) telling graphs from an excellent 2008 Statistics Canada study shows how stagnant incomes have become for all but the top 5% (though, to a lesser extent, the next 15% has also made some gains). This stagnation has occured despite significant growth in productivity and the overall economy.
Figure 3: Median Total Income for each income group in 5% increments (Vingtile).
Source: Statistics Canada, Special Tabulations from the Longitudinal Administrative Databank (LAD) in (Brian Murphy, Sylvie Michaud and Michael Wolfson Statistics Canada, 2008) “Income Trajectories of High Income Canadians 1982-2005” Figures in constant 2007 dollars.
Without even looking at what this growth in richer countries has meant for environmental degradation or for other parts of the world which have, in large part, acted as low value added labour pools for the richer world’s productivity, it is clear to see that the immense riches of the top earners have not translated into big paydays for Canadians. This is especially true when you consider the rapidly rising costs of education, health, eldercare, dentistry, and other essential, big-ticket items that have eroded Canadians overall purchasing power.
And this was during the ‘good times’. Imagine where the middle and poorest classes might be headed if we continue on this same course as we dive head first into uncertain, recessionary times.
— Darren Puscas, Toronto
Sources and further reading on the 1%:
- The Canadian Centre for Policy Alternatives recently put out a fantastic report on Canada’s top 1% which dispels many, many other myths – check it out: The Rise of Canada’s Richest 1% For a short summary, also see: Richest one per cent’s share of wealth at historic high
- What Wall Street Protesters are so Angry About from Business Insider – more great graphs!
- World Top Incomes Database
- Top 1 Percent of Americans Reaped Two-Thirds of Income Gains in Last Economic Expansion, Report of Center for Budget and Policy Priorities
- Top income earners: are they getting richer? See the data, Guardian UK, May 16th.
- Income Trajectories of High Income Canadians 1982-2005, Statistics Canada