The Commission on Social Determinants of Health was emphatic about the role of “the inequitable distribution of power, money and resources” in sustaining socioeconomic gradients in health. Such inequitable distributions do not just happen; they are the result of choices about how societies govern their economies and distribute the rewards they generate. Globalization has undoubtedly narrowed the range of such choices – think about Eduardo Galeano’s “magic galleon that spirits factories away to poor countries” (1) and the shift of power in Europe from electorates to bond investors and credit rating agencies – but has not eliminated them. Three recent publications offer important and sobering insights into how those choices have played out in Canada.
The most recent report on child poverty from UNICEF’s Innocenti Research Centre points out that: “It is now more than 20 years … since the Government of Canada announced that it would ‘seek to eliminate child poverty by the year 2000.’ Yet Canada’s child poverty rate is higher today than when that target was first announced.” The poverty rate referred to here is not Canada’s Low Income Cut-Off, but rather a standardized relative measure referring to a household disposable income of less than 50 percent of the national median, after adjustments for family size. Canada, as we can see, does not rank especially well on this measure. Much of the report is devoted to comparing this measure with an alternative one constructed around 14 specific measures of child well being, for which data are available only for European countries, but among countries for which both measures are available there is a clear correlation between rankings.
new paper by five Canadian economists explores some of the driving forces behind Canada’s steadily rising level of inequality –in particular, the growing share of income flowing to the top one percent of the income distribution. “The top income share almost doubled” from about 8 percent in the late 1970s “to reach 14 percent in recent years. Such an uneven distribution of income has not been seen since the dark days of the Great Depression.” In a clearly written review of the issues, the report goes on to make a number of important points:At the other end of the economic scale, a
- The range of occupations represented in the top one percent is far wider than stereotypes would suggest, with only 10 percent of top earners working in financial services as of 2005 (the date covered in the last compulsory Long Form Census, from which many of the report’s data are drawn)
- Growing inequality is a function not only of changes in the distribution of market income but also, and crucially, of the retreat from redistribution that began in the 1990s
- “Younger workers, especially those with limited education, face a world with worse earnings prospects than their fathers’ generation,” suggesting a future of further inequality in market incomes as older cohorts of workers who have maintained their wages retire
- Revenues from increasing income taxes only on the top once percent would probably be relatively modest, even before considering the impact of strategies for tax avoidance that are available to many of the rich
The report also has, to my way of thinking, at least two shortcomings.
First, and perhaps unavoidably given data limitations, it deals only with income and not with wealth. Wealth distributions are often more unequal than incomes, and many forms of intergenerational wealth transfers (e.g. bequests of valuable principal residences) do not show up in income figures. The report points out the role of assortative mating (of two high earners) in increasing household income inequality; its contribution to inequality in household wealth may be more significant.
Perhaps more seriously, the report takes the concept of ‘skill’ as entirely unproblematic, treating the education level associated with a particular occupation as a rough proxy. However, there is often no clear connection between the intrinsic complexity of the tasks involved and the credentials of those performing them; in terms of labour market outcomes it makes more sense to ask what kinds of tasks, including some very complex ones, are amenable to ‘offshoring’ in low-wage jurisdictions.
Robert Evans, the iconoclastic health economist whose work was the topic of an earlier posting, likewise organizes a recent article around the one-percenters’ growing share of income and on that fact that “these trends,” both in Canada and the United States, “are to a considerable extent a consequence of conscious, deliberate agency by more or less organized and coherent interest groups.” His most immediate concern is what the retreat from redistribution means for the future of Canadian public health insurance (“a casualty in the class war,” in Evans’ words) now that federal cash transfers to the provinces for health care no longer come with even minimal conditions.
Evans is, as always, playful with his literary allusions; Sherlock Holmes enthusiasts are directed to his endnote 11 and the accompanying text.
Outside the health care field, he emphasizes the health consequences of the “degrading” of environments where people live and work that is associated with rising inequality – a special concern in view of the prospects of a global economic realignment in which many ‘good jobs’ have simply disappeared from the high income world. Reducing the effects of that realignment on health disparities will require more, not fewer redistributive economic and social policies – certainly not the austerity measures that are now worsening the current recession. If one agrees with Evans’ analysis of the sources of successful resistance to such policies, then the precarious state of the social determinants of health agenda in Canada is hardly surprising.
(1) Galeano E. (2000). Upside Down: A primer for the looking glass world. New York: Picador.