There’s a scene in the Netflix series Maid — an artful exploration of domestic abuse and the predicaments of the working poor — where the young mother at the heart of the story, Alex, dashes into a dollar store to buy a plastic doll for her two-year-old daughter.
Every time Alex, played by Margaret Qualley, makes a purchase, a little accounting goes up on a corner of the screen. An invisible hand scratches out one small sum and replaces it with another, even smaller one. When the owner of a stately seaside home refuses to pay her $37.50 for a cleaning job, the loss of those puny wages has the feel of tragedy.
Some say there’s no money to support families like Alex’s. I say you just need to know where to look. And increasingly, we’re finding more and more.
Take the Pandora Papers, an investigation by journalists around the world that discovered up to $32 trillion parked in offshore accounts and other dodges so the elite can duck taxation.
There has always been a great divide in human history, says Lars Osberg in an October conversation. The Dalhousie University professor of economics has been probing this divide since he was an undergrad and is now a world authority on the subject of inequality.
Osberg argues that while the gap between the rich and the poor has widened since the 1980s, a shift is coming. “The discourse on inequality,” he says, “has changed dramatically in the past five years.”
He recalls that six years ago, in the 2015 federal election, taxing the wealthy was simply not on the table. Even the NDP campaigned on a balanced budget while proclaiming that income tax rates beyond 50 per cent were out of the question.
The pandemic changed a lot of that: billionaires with toys enriched by the worldwide malady made the headlines, but so did makeshift encampments in city parks and growing lineups at food banks and community kitchens. It seems a tipping point was reached, and the shrugging of shoulders at the rich/poor divide gave way to a simmering anger.
An Abacus Data poll, released in August, revealed that 89 per cent of Canadians want a wealth tax, and 92 per cent favour closing tax loopholes that allow corporations to hide profits in tax havens.
In his 2018 book, The Age of Increasing Inequality: The Astonishing Rise of Canada’s 1%, Osberg argues that in the past 40 years the historic gap between the rich and the rest in this country has broadened dramatically — to toxic levels, in fact.
Real income growth for many Canadians has been stalled all that time. Meanwhile, those at the very top, the One Per Cent and especially the top one per cent of the One Per Cent, have seen their wealth grow exponentially. The higher in the pecking order, the faster the growth. (The pandemic, Osberg says, has only accelerated the process since his book came out.)
Whatever happened, he asks, to the historic bargain that was struck in this country after the Second World War? “The rich, the middle class and the poor,” he writes, “all shared in economic growth.” The incomes of the rich were then taxed at 70 per cent, not 30 per cent as now. To revert to those old levels today could net some $26 billion.
Starting in the early 1980s and especially in the mid-1990s, social programs were cut and never restored, and no one suffered more than those at the bottom while those at the very upper end saw their wages (and stock options) begin to soar. These days the top 100 CEOs in Canada earn, on average, $11 million a year.
That’s a heap of political and economic power in the hands of a very few, Osberg says. Power is so concentrated it imperils democracy. Prime ministers always take their phone calls and, a generation later, those of their sons and daughters.
Meanwhile, stressed Amazon workers complain of too few bathrooms in their vast warehouse workplaces, and too few bathroom breaks, while workers at Loblaws saw pandemic danger pay bestowed, then withdrawn, mid-pandemic.
Denizens of the inner city and the gated community tend to never see or hear one another, but the question is now being asked: does the suffering of some enable the sumptuousness of others? Are the lives of these polar opposites actually linked by the tendrils of macroeconomics?
The white-haired and award-winning professor takes the long view when it comes to change.
“There has always been extreme inequality in human history,” Osberg told me. “The Bois de Boulogne in Paris, now a lovely park, was a hunting preserve for French kings. And they had the Palace of Versailles. All financed on the backs of the French peasantry.”
But things change, sometimes quickly, and sometimes for the better. A minimum tax on corporate wealth was long seen as a pipe dream. Not now. Some 140 countries have just agreed to a minimum global corporate tax of 15 per cent as an antidote to the use of certain countries as tax havens.
“It is a sign of change,” says Osberg. “The devil is always in the details, however, as to what will be counted in taxable income, and therefore how much this minimum is actually enforced. Maybe the tax rate should be higher, but that can come later. Multinationally-agreed, minimum corporate tax rates weren’t coming at all for many years.”
Meanwhile, south of the border, the musings on Twitter of Elon Musk — now the wealthiest man in the world, with a net worth estimated by Bloomberg to be in the range of $323 billion — has provoked a huge response.
He recently asked his 63 million followers on social media whether he should sell some of his stake in Tesla, prompting the head of the United Nations food program to weigh in and call for billionaires to step up. Feed the hungry, tax the rich. These old clarion calls have new life and urgency now.
As Washington Post columnist Helaine Olen recently noted, “Billionaires are on a collision course with the rest of us. Survey after survey shows a solid majority of Americans believe that the rich in general and billionaires in particular are not paying their fair share.... We don’t need to look at the data on inequality in this country, child poverty, housing or health issues to know that things have gone too far.”
The pandemic has been a major accelerant.
“COVID-19,” says Osberg, “has given a huge shock to inequality and political perceptions. Opinion polls in Canada show overwhelming support for taxing the rich. We’ve seen a massive possibility proof, with the Canada Emergency Response Benefit happening virtually overnight. It is possible to have rapid change. It used to be argued that big deficits would cause the sky to fall. The sky did not fall.”
The sky might yet fall — but for other reasons. Rich philanthropists such as Andrew Carnegie in the late 1800s embarked on their campaigns of large-scale generosity in part because they feared that unchecked “robber baron” greed would spark violence. Osberg feels the same anxiety today.
“Roosevelt’s New Deal in the 1930s,” he argues, “forestalled revolution. It saved capitalism from itself. Can it happen again?”
Osberg observes rising anger over inequality, but he wonders which way that anger will go — towards demagoguery (witness Donald Trump), or towards progressive change (witness Joe Biden’s infrastructure plan)?
Osberg talks about “the exploding international literature” on the subject of income inequality. He belongs to a non-profit association called the Society for the Study of Economic Inequality, founded in 2005. It includes some 300 researchers, academics, policy-makers and activists from 70 countries — and their number is growing.
Perhaps we in this country can go back to what we once were: a nation that shared the wealth.
Muhammad Yunus, founder of the Grameen Bank that offers micro-loans to impoverished people, once wrote of poverty, “We’ll need to build museums to display its horrors to future generations. They’ll wonder why poverty continued so long in human society — how a few people could live in luxury while billions dwelt in misery, deprivation and despair.”
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