How does Canada’s 1% compare to other countries?

 

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?

Nope.

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.

Stay strong Occupy Toronto, Van­cou­ver, etc… we sorely need you.

— Dar­ren Pus­cas, Toronto

__________

Sources and fur­ther read­ing on the 1%:

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NOTES: In Fig­ure 1 and Fig­ure 2, the lat­est year avail­able varies because of lim­i­ta­tions in the data set.  Those years are as fol­lows: U.S. (2002); Canada (2006); S. Africa (2007); Sin­ga­pore (2005); Japan (2005); Italy (2004); France (2006); Spain (2005); Aus­trailia (2002).  Despite these small vari­a­tions, the num­bers are indica­tive of over­all trends.
Also, 1985 is a some­what arbi­trary choice of begin­ning year, but, again, over­all trends were sim­i­lar even if you began with other years.

9 Responses to “How does Canada’s 1% compare to other countries?”

  1. Colleen October 14, 2011 at 5:06 pm #

    This is great infor­ma­tion, and I love the graphic graphs. Thanks for tak­ing the time to put this together — it’s very useful.

  2. Michael Holloway October 15, 2011 at 8:29 am #

    Good stuff.

    I need to do more on the Cana­dian angle thing. Myself I’,ve been so immersed in the US finan­cial cri­sis and then the aus­ter­ity there (Wis­con­sin), I haven’t done much research about up here — yet.

  3. R Scott October 15, 2011 at 4:35 pm #

    What? Does this mean the Harper has been lying about Canada being so much dif­fer­ent than other coun­tries when it comes to shar­ing the wealth? Say it ain’t so.

  4. Matt October 16, 2011 at 8:17 pm #

    Thanks, Dar­ren, that StatsCan report looks fascinating.

  5. Michael October 16, 2011 at 8:46 pm #

    We should def­i­nitely get rid of Stats Can!! It’s under­min­ing the 1% and Harper. Great work, or should I say re-work?

  6. Corina October 17, 2011 at 9:41 am #

    Hi Dar­ren. this is great. you mean i can pur­sue the Amer­i­can Dream in Canada too? All this time it thought i’d have to give up my poten­tial riches in exchange for pub­lic ser­vices or what­ever. what a relief.
    corina

  7. chuck October 19, 2011 at 11:18 am #

    I don’t dis­agree with the basic thrust of this piece but i think some cau­tion is war­ranted in read­ing the numer­i­cal comparisons.

    Europe has a num­ber of tax havens where the 1% can take up res­i­dence. (Monaco is prob­a­bly the best exam­ple). So this might not be an apples to apples comparison.

    These num­bers might be com­par­ing the 1% in the USA/Canada vs those who are between the top 2% and 3% in France.

  8. The Tragically Flip October 23, 2011 at 2:04 pm #

    I love the com­par­a­tive chart, though if you can go back to num­bers from the late 1970s, before Thatcher/Reagan/Mulroney (the neolib­eral rev­o­lu­tion­ar­ies) you’ll get an even starker com­par­i­son I believe. By 1985, the Rea­gan upper class tax cuts were already send­ing the wealthy to their yacht bro­kers and spec­u­la­tive non­sense like the S&L was already underway.

Trackbacks/Pingbacks

  1. Why worry about the Richest 1%? (Part I) | urbangeography - November 4, 2011

    […] in incomes from 1997 to 2007 (in the fastest grow­ing decade in this gen­er­a­tion). Income has become vir­tu­ally stag­nant for all but the top 5%. The ris­ing income of the top 1% applies in annual terms as well. In 2010, […]

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