Full analysis of CLC on 2014 Federal Budget

Canadian Labour Congess

The 2014 Federal Budget lacks any vision about how to stop growing inequality and stimulate the economy.

The Conservative plan continues to focus on austerity measures to balance their budget by 2015, and rests their hopes for economic growth on no-strings attached corporate tax cuts. But this plan is not delivering the promised investments in R&D, machinery and training needed to create better paid and more secure jobs.

To compensate, this budget introduces a myriad of small, limited and targeted measured in R&D and training, proposes to create internships instead of good jobs, all paid for with more spending cuts, such as cuts to federal employees' sick benefits and increased costs to retirees benefits.

Overall, federal government spending will be lower in 2014-15 compared to this year, dragging down economic growth and job creation.

How austerity works for some

People's Voice Editorial

How does our society measure what "works" and what doesn't? The economic crisis which broke out in 2008 provides a classic lens to examine this question.

On a global scale, the major shareholders of the most powerful corporations and banks have recovered, and much more. Huge bailouts squeezed from the working class covered any short-term losses suffered by the rich, and then profits and stock prices rebounded past pre-crisis levels.

Here in Canada, studies on the "Rich 100" bear out this analysis. As one media commentary said in November, "because these people have been at it for decades, they keep getting fabulously, obscenely, gloriously richer."

Collectively, the individuals on Canada's Rich 100 are worth $230 billion, more than the total gross domestic product of many countries. This year alone, their combined net worth surged by more than 15%, the biggest increase since 2000. The cutoff for making Canada's Rich 100 list is now $728 million, compared to $309 million in 1999.

Here's one example. While the retail and grocery sectors in Canada have been challenged by Target and Walmart, profits in these sectors have seen big profit increases. Companies controlled by two Rich 100 families, the Westons and the Sobeys, have bought up Shoppers Drug Mart and Safeway Canada. The net worth of these families shot up by $2.1 billion and $598 million, respectively, for gains of about 25%.

So, does capitalist austerity work? The bottom line is that it serves the "one percent" quite well, while working people, the so-called "ninety-nine percent," keep getting shafted. It's time for a system that works for the vast majority, not the ultra-rich.

O'Leary's comments on inequality cross the line

Commentary by Rebel Youth magazine

Rebel Youth magazine is renewing its call to fire CBC economic commentator Kevin O'Leary after comments made Tuesday about growing global social inequality.

Responding to co-host Amanda Lang's summary of a new report by Oxfam which notes that the 85 richest people on the planet have as much wealth as the poorest 3.5 billion people, O'Leary said:

It’s fantastic. And this is a great thing because it inspires everybody, gets them motivation to look up to the one per cent and say, ‘I want to become one of those people, I want to fight to the get up to the top.’ This is fantastic news and of course I applaude it. What could be wrong with this?

Oxfam is an international anti-poverty NGO. Its new report ''Working for the few,'' confirmed that almost half of the world’s wealth is now owned by just one percent of the population. (You can read our 60 second summary here, with links to the full download).

Oxfam report on inequality: 60 second summary

Poster by Oxfam UK

By J. Boyden,
Rebel Youth Magazine

This week the international charity Oxfam released a report which confirmed that almost half of the world’s wealth is now owned by just one percent of the population. The briefing paper, entitled Working for the few: Political capture and economic inequality was authored by researchers Ricardo Fuentes-Nieva and Nicholas Galasso.

We quote some of the statistics below in a 60 second summary.

Who are the richest 1%?

Rebel Youth

In our last print issue we published a special discussion about the strategy and tactics of youth and student struggle and the Occupy movement by Drew Garvie.

Since that time the Occupy movement has not gone away but its biggest impact remains its slogans of solidarity and class struggle, about the 1% and the 99%. Some of our readers asked for more information about who, exactly, are we talking about when we speak of the 1%?

Helpfully, the labour publication BC Federationist put out a quick summary of a new study from a group of University of British Columbia economics professors.

What the report doesn't conclude is, of course, key in our analysis here at Rebel Youth: that the real 1% are a class because of their relationship to economy or (more precisely, the mode of production) not percentages of income.

As the saying goes -- their are those who work, and those who work them.  As such the power and influence isn’t just from having loads of money (which can also be obscured from census collectors and the tax man) but as a class. Moreover, monopoly capitalists don't make a wage. Instead, they make profits which come from  -- like vampires sucking on workers wages.

Still, the information is useful and striking.

According to the BC Federationist the UBC researchers found, broadly speaking, that income distribution has not been this uneven in Canada since “the dark days of the Great Depression.” “The ratcheting-up of inequality in Canada is real,” the 43-page paper says.

In Canada, about 8 per cent of the country’s total income was concentrated in the hands of 1 per cent of the population back in the late 1970s. In recent years, that almost doubled to 14 per cent, the UBC paper said, which is based in part on details from the 2006 long-form census.  Reasons for the growing chasm vary.

The wage gap between those with a university degree and those with just high school is widening. Younger workers are facing worse earnings prospects than a generation ago. Outsourcing, declining unionization rates and technological change may also be playing a role.

Here are some more of the findings from the study, entitled “Canadian Inequality: Recent Development and Policy Options”:

• The top 1 per cent of earners amount to 275,000 individuals.

• You need an annual income of at least $230,000 to be part of the top 1 per cent; the average income in this group is $450,000, compared to only $36,000 for the whole Canadian population.  

• One could safely call this a brotherhood — 83 per cent of those in the top 1 per cent are men.   

• Just 10 per cent of people in the top 1 per cent work in the finance and insurance industry (despite garnering most of the public’s wrath). Senior managers and CEOs are over-represented in the top group, but still only account for 14 per cent of top earners. The only other large group of top income earners? Physicians, dentists and veterinarians who comprise almost 10 per cent of top earners, despite representing less than 1 per cent of the workforce.

The paper was jointly written by UBC’s Nicole Fortin, David Green, Thomas Lemieux, Kevin Milligan and Craig Riddell for the Canadian Labour Market and Skills Researcher Network.