The inequality trap

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Two years ago the Occupy Movement propelled inequality into the news. Today Occupy is gone from the headlines, and inequality hasn't made it to the political agenda.

Think-tanks, economists and some politicians talk a lot about inequality. What do Canadians think?

In a Forum Research poll in November, 86 per cent agreed that "there is a growing income gap in Canada, where the rich are getting too rich and the poor are getting too poor."

-  76 per cent also agreed the "provincial and federal governments should do more to redistribute wealth from the richest to poorest Canadians." Fifty per cent agreed strongly.

-  77 per cent, in an Environics Research poll in 2012 for the Broadbent Institute, agreed "the widening income gap is a big problem for Canada that will have a lot of long-term consequences for society."

These polls, however, grossly overstate the public's concern with poverty and inequality. Here is the evidence.

Prior to the 2008 federal election, when Angus Reid Strategies asked voters if poverty is a "very important" issue for them in the election, 53 per cent said it is. Just a month later, though, when Reid interviewers asked, "What do you think is the most important issue facing Canada today?" barely 9 per cent said poverty.

The story was the same before the 2011 election. A 2011 Harris/Decima survey asked, "What would you say is the most important issue for you?" Only 6 per cent mentioned anything in their own words that the polltakers summarized as "social equality issues such as poverty and the cost of living."

Remind voters about poverty, they say it's an issue. Let them speak without prompting, and they forget about it.

Some commentary on inequality ignores the reality of public opinion. Diana Carney, the vice president-research at Canada 2020 (an "independent, progressive think tank" in Ottawa) says, "… Let's embrace inequality as the defining issue of our time and confront it head-on by promoting greater opportunities for all."

But how can anything be "the defining issue" when most people can't remember it? If people don't think inequality is a problem until pollsters call, don't expect them to change the way they vote or go into the streets to demand the corporations, the rich and the government do something to reduce the earnings gap.

For the country's progressive thinkers, researchers and bloggers, the inequality discussion is a case of falling into a right-wing trap. The right has a short list of memorable messages for any problem: lower taxes, less government "interference," and personal responsibility.

But the left has an over-supply of remedies for inequality. A higher minimum wage. Higher taxes on the rich. A guaranteed annual income. More job training and education. Stiffer corporate taxes.

The constantly expanding left-of-centre agenda names so many problems that none can break through today's intensive message competition. Call it agenda creep. Here's what it does in public opinion.

In February, Ipsos Reid presented respondents with a list of 12 potential federal budget priorities and asked which is a "high priority."

-  69 per cent rated health care a high priority -- the top of the list.

-  61 per cent said "the economy and jobs."

Behind, in sixth place, came "reducing the income gap" between the "richest and the middle class" (32 per cent) followed by "social programs and poverty reduction" (31 per cent). The longer the agenda, the less chance inequality will reach the top.

Some of the federal Conservative Party's favourite causes gathered more support than inequality and poverty: 40 per cent said a high priority is "lowering taxes," and 33 per cent said balancing the federal budget.

Ironically a focus on inequality draws attention away from poverty. If you really want to help low-income people, make poverty your cause. In most households with low incomes, people actually feel their problem is poverty, not inequality.

A Vector Poll™ in 2011 asked a representative sample of Canadians:

If you had to say, which do you think is a more serious problem right now? The number of people in this country in poverty or economic inequality -- the income gap between the rich and the poor?

In households with annual earnings above $100,000, 52 per cent said poverty is a more serious problem than inequality. In households with annual earnings under $20,000, 61 per cent said poverty.

Because inequality's not a top-of-mind concern, people are content with crumbs instead of larger shares of the pie. For instance, nearly all Canadians support a higher minimum wage, which is the least governments can do about poverty.

In a Vector Poll™ in 2013, nine in 10 people supported increasing the minimum wage each year "by the amount of inflation" (53 per cent supported it "strongly," another 36 per cent "somewhat").

Raising the minimum wage is popular because it's self-interest. Hiking the minimum wage entails no personal sacrifice except for employers who pay it. Even better, a rising floor lifts all wages. A 50-cents-an-hour hike in the minimum wage might ease poverty. But it won't close the rich-poor gap if workers earning more than the minimum wage also get an extra 50 cents. Everyone gets more, but the gap continues.

Moving inequality onto the public agenda requires calling for radical change because inequality is pervasive.

In the wealth ranks, big-ticket lottery winners widen the gap. Stars in every endeavor -- cinema, software and sports -- earn much more than their counterparts who have no name recognition. Union leaders earn more than their members. Across-the-board percentage pay increases spread the gap between the top and bottom.

The prime suspects in inequality are the CEOs paid hundreds of times what their average employees earn. But just what is the right ratio between pay at the top and the shop? The government sets a poverty line, but there's no inequality line.

Perhaps the biggest difficulty making inequality a political issue is that most of us are content with the status quo. Some 87 per cent agree (49 per cent agree strongly) that "Canada is the best place to live in the world," according to a poll last year conducted for CTV News.

To move inequality up the public agenda, progressives require new ideas. For starters, look at inequality's root causes.

Statistics Canada analysts, in the StatsCan publication Perspectives on Labour and Income, say two factors are mainly responsible for the widening gap between families at the bottom and top.

First, the richest Canadians own homes and RRSPs.

And the rising value of the elite's mutual funds, bonds and shares accounts for the rest of the growing gap. The non-rich have few or none of these income-producing assets and investments.

To reduce inequality, think how to democratize the stock market and extend share ownership widely and quickly to everyone. Canada has socialized medicine. Why not a socialized stock market? Which is more likely to bring economic justice? The minimum wage -- or a minimum portfolio?

Marc Zwelling is the founder of the Vector Polland author of Public Opinion and Polling For Dummies (Wiley, 2012).

Photo: Antony Theobald/flickr

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