A study released by the Conference Board of Canada last week painted a picture of a growing income gap between old and young — a gap the report says that could “trigger a backlash” among young people unwilling to pay taxes when the benefits that those taxes are paying for (CPP, medicare, etc.) largely go to their elders.
The Conference Board report raises an incredibly important issue: the lack of opportunity for young people in today’s economy.
The problem with the report is the particular spin on this tale that it shares with most mainstream media accounts of the lack of economic opportunity for young people — it pits the old against young, while studiously avoiding the real cause of the problem: government policies that have led to a widening gap between the rich and the rest of us of all ages.
The truth of the matter is that the precarious financial situation faced by the young is just one part of the larger erosion of economic security for working people in general, as an increasingly powerful corporate sector pushes governments to redesign tax and trade laws in its favour, and to weaken union and workplace protections. This has allowed corporations to scoop up an increasingly large share of national income, at the expense of labour.
Want proof? A recent report by the Organisation for Economic Co-operation and Development (OECD) comparing the share of national income going to workers (labour) amongst OECD countries shows labour income has fallen more in Canada than in the OECD area as a whole.
According to the OECD, the labour share of income in Canada fell by five percentage points to 60.3% from 65.3% in 1990, one point higher than the average fall of 3.8 percentage points recorded for the OECD area.
While the overall labour share (which includes high income earners) declined sharply in Canada, the income share of the top 1% of earners increased by 20%. Consequently, the decline in the labour share would be even larger excluding the earnings of the top 1% of earners.
In other words, the share of income going to “capital” (corporations) and the wealthy has increased dramatically in Canada while the income of most of the rest of us has stagnated or declined.
So if the share of national income is falling for most of us, how come things seem even worse for young people?
Let’s return to the root cause of the problem: an increasingly powerful corporate sector pushing governments to redesign tax, trade and labour laws in its favour and at the expense of average Canadians.
This corporate-government attack on workers has been fierce — but older workers, who are more likely to belong to unions and have more seniority, have been better positioned to defend themselves.
As a result, it’s now common to have two-tier workplaces, where new hires receive pay and benefits that are a fraction of what long-time employees receive. And those new hires, of course, tend to be young people.
But let’s remember that it’s the corporations that have created this highly unequal situation, by taking advantage of vulnerable younger workers. Unions like Unifor and the Steelworkers have fought bitterly against the two-tier workplace, knowing it will weaken worker solidarity.
So why is it that all we hear from the mainstream media and reports from corporate-sponsored think tanks like the Conference Board, is that older workers are taking economic opportunities away from younger people and getting more than their fair share of government benefits.
It’s simple: above all, the corporate sector and right-wing governments like the Harper government, want to ensure that the anger of disaffected young people doesn’t end up aimed at the corporate elite who are causing the problem — as it was during Occupy Wall Street’s campaign against the growing wealth and power of the ‘one per cent’.
But News for Ontario’s 99% wants precisely the opposite. We want young people angry at the right people: the corporations and right-wing governments like Harper’s.
So whether you are a young person or a not-so-young-person, read up on the real facts behind Canadian inequality in the two attached links.
And then go out there and get angry at the people who are really causing economic problems for young people.