Income Disparity

Did you know that corporate bosses today may earn 312 times the wage of their average employee?

Julian Hoyak, Political Advocacy Committee Member

The following article by Julian Hoyak is the result of a study by the Political Advocacy committee of RTAM over two years. Julian has been a valuable member of the committee and has followed with great interest the phenomenon of the growing gap between the average worker and company CEOs. Beyond the obvious stress of declining real purchasing power is

With respect to the mandate of the Political Advocacy committee to engage and inform our membership, the topic to be discussed is Income Disparity – the gap between what is earned by the top income earners and that earned by the average worker.

While there are attempts by right wing think tanks to minimize and trivialize the issue, the evidence is overwhelming that income disparity is a problem. Statistics by groups studying the phenomenon may vary, depending on year and approach, but they are consistent in that they all confirm that the income gap is widening.

The Conference Board of Canada, the Organization for Economic Cooperation and Development, the Center for Policy Alternatives and the Broadbent Institute all agree that “inequity surged in the 1990s and remains high today.”

To put the assertion into a numerical context, the Guardian, in its August 16, 2018 issue, quoted from a study by the Economic Policy Institute which tracks incomes. It reported that in 1965, the CEO to worker income gap was 20-1. In 1989, it was 58 – 1, and that currently “bosses now earn 312 times that of the average workers wage.”

Marc Montgomery of Radio Canada International informed us (June 2018) that “by 11 A.M. on the first working day of the new year, the average CEO…has already earned what it takes an entire year for the average Canadian to earn”.

A study by Emmanuel Saez of U.C. Berkley not only supports the findings already mentioned, but has compared his findings against historical data. He states “American top 1% incomes peaked in the 1920s, right before the onset of the Great Depression.” Statistics Canada data shows that the higher your income bracket, the larger the increase in your income between 2006 and 2015. That the current income conditions in both the U.S. and Canada duplicate those in effect just prior to the 1930s Depression, is somewhat disconcerting, not only for Americans, but obviously for Canadians as well.

There are reasons for the rapidly rising rate of income disparity. One would be the tax structures favourable to wealth protection. There are ways to take advantage of tax avoidance. A second factor identified by the Institute for Policy Studies and AFL-CIO is “the declining role of unions in the United States,” This is an unfortunate trend in Canada as well. Statistics Canada reports that the rate of unionization was 37.6% in 1981 falling to 28.8% in 2014 and the slide continues. A third factor might be the often reported stagnation of wages that has affected incomes for a generation. All have had the effect of suppressing wages for workers.

So – why is this “bounty for some” a problem? An article appearing in the May, 2018 issue

the reality of growing unrest and dissatisfaction in the fabric of Canadian and American societies. Because of the decline of our COLA in the past two decades, our readers have a stake in the issues addressed in this article. - John Sushelnitsky, Chair of the Political Advocacy committee