With apologies to United States President Abraham Lincoln, an economy divided against itself cannot stand.
Since the Great Recession there has been a seismic change in how our economy has benefited different classes of people. Before there was at least a sense that all levels of classes were moving forward.
Not any more.
While wages since 2009 have remained flat, or have even retreated, salaries for corporate executives and people with specialized degrees have shot up. According to a study by the Canadian Centre for Policy Alternatives, Canadian corporations have reaped record profits and are now sitting on $572 billion in cash, unwilling to spend it, despite the pleas by the Bank of Canada.
The top CEO salaries are 171 times that of the average Canadian worker, while at the same time more people are being pushed into part-time jobs in an effort to make ends meet.
Historically, recessions are when the income inequality gaps shrink, but something different happened during the Great Recession. The divide between rich and poor widened. The top one per cent saw their share of national income rise. And since the increasing strength of the stock market, corporate profits have swelled since 2009. That one per cent of the population now earns as much each year as the bottom 60 per cent together.
Our governments seem to be exacerbating the Great Divide, offering programs to pad the one per centers’ beds, while offering little to nothing for the middle class. It has meant higher poverty, more food banks and more household debt.
Last week’s unemployment numbers for Canadians remained disproportionately high with 1.3 million Canadians out of work. Youth unemployment is at a horrendous 14 per cent. Hamilton’s unemployment rate is around six per cent, still below the Canadian average of seven per cent, but disturbing nevertheless.
Yet in the federal budget, the Conservatives are consumed with eliminating the $17.9-billion deficit by 2015, a tactic that has very little to do with economics, and more about soothing political fears when they go to the polls in the same year.
The federal Conservatives continue to take a lead pipe to the economy, curtailing spending by $90 billion between 2010 to 2017, while entrenching corporate tax cuts and further tax breaks for the one per centers.
Ontario Liberals recognize there is growing income equality gap, with Premier Kathleen Wynne announcing a 75 cent increase to the minimum wage that will rise to $11. The Liberals promise annual increases Oct. 1 each year that will be tied to the rate of inflation.
Business groups argue higher salaries will mean fewer jobs, especially for youth. And, they point out, there are no obstacles to businesses from laying people off and establishing a 37-hour work week from the current 40 hours to recoup their costs.
Yet the $11 minimum wage is about 16 per cent below the poverty line for people who are forced to take on part-time jobs. The social dislocation is another reminder that governments and businesses are merely playing a vicious shell game on workers. It’s not so much they don’t care, as an inability, or an unwillingness to do anything about our fraying economic society. In the end you may win once or twice in this Darwinesque game, but in the end everybody loses.