Distribution Of Income And Wealth In Ontario

Distribution analysis has advanced remarkably in recent years, and this is a valuable application of its principles to a Canadian context. The book provides an extensive survey of recent literature and a new source of income and wealth distribution data for Ontario, drawn from newly available microdata sets. It also presents an evaluation of the data as a basis for measuring inequality in the distribution of economic and well-being. The empirical results illustrate how incomes vary significantly with age according to labour market attachment and experience, educational attainment and occupation, transfer receipts, and investment benefits. Similarly, strong age effects on net worth account reflect life-cycle patterns in asset holdings and debts typically associated with family investment in housing and financial adjustments for retirement. Differences in family size and composition have a substantial effect on the structure of family economic well-being. The inequality effects of adjusting for accrued capital gains and net worth holdings can also be quite significant. It is found that the distributional effects of CPP net benefits are considerable, although they are not as equalizing as one may have expected because of marked cohort effects. The detailed findings suggest that the life-cycle framework is a very useful one for evaluating the distributional effects of certain government programs, particularly intertemporal ones, and they underline the need for a range of different types of policies to address low income problems. The study urges greater recognition of the inequality of treatment and opportunity among different groups of the population. It also points out that conventional income distribution figures are only very imperfect estimates of the state of inequality in the underlying distribution of economic well-being.

Canada is in a new era. For 35 years, the country has become vastly wealthier, but most people have not. For the top 1%, and even more forthe top 0.1%, the last 35 years have been a bonanza. Canadians know very well that there's a huge problem. It's expressed in resistance to tax increases, concerns over unaffordable housing, demands for higher minimum wages, and pressure for action on the lack of good full time jobs for new graduates. This book documents the dramatic and rapid growth in inequality. It identifies the causes. And it proposes meaningful steps to halt and reverse this dangerous trend. Lars Osberg looks separately at the top, middle and bottom of Canadian incomes. He provides new data which will surprise, even shock, many readers. He explains how trade deals have contributed to putting a lid on incomes for workers. The gradual decline of unions in the private sector has also been a factor. On the other end of the scale, he explains the growing high salaries for corporate executives, managers, and some fortunate professionals. Lars Osberg believes that increasing inequality is bad for the country, and its unfairness is toxic to public life. But there is nothing inevitable about this, and he points to innovative measures that would produce a fairer distribution of wealth among all Canadians.

To the extent that consumption is a fair reflection of real economic well-being, the standard of living of the top 10% is about 3.85 times that of the bottom 10%, on an adult-equivalent basis. [...] Second, the paper will examine the issue of data reliability in the context of the measurement of inequality. [...] The April 1999 report of the Auditor General of Canada pointed out that the underground economy, which it defines as any "legal transactions in goods and services that are 'hidden', resulting in the evasion of taxes," (Canada, Office of the Auditor General, 1999: 2-7) amounted to about 4.5% of GDP. [...] While all of this literature suggests that there are good reasons for concern about the reliability of the income data that researchers use to study inequality, regrettably there does not appear to be a study which compares the size of the underground economy or of unreported income over the past several decades using the same methodology. [...] Unfortunately, there is little mention of the problem of unreported income in any of the studies dealing with the measurement of income inequality in Canada cited above.

Social Inequality in Canada is a collection of twenty-eight articles that cover all of the major aspects of social inequality. The text covers two broad components: objective or structural conditions of social inequality (power, poverty and wealth, occupations, and educational attainment, in particular) and ideologies that help support these differences. Readers who would prefer a more egalitarian society than currently exists in Canada will find reasons for both optimism and pessimism in the research presented here. The studies in this collection demonstrate that some types of inequality are generally becoming more marked over time, while others have considerably diminished, and still more that show little change in recent decades.