Author: Michal Rozworski

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Canada Inequality Tax

Is Canada the Sweden of anything?

There was an odd article last week on the explainer site Vox that argued Sweden doesn’t achieve its relative equality with very progressive, “soak the rich” taxation. While Matt Bruenig and Mike Konczal have already provided excellent, US-centred rebuttals to this argument, I thought this would be a good occasion to take a look at some comparative facts about Canadian inequality and overall redistribution.

First, notice that on the chart in the original article, Canada is very close to the US, as being among the “least redistributive”. This goes against the national image of a kinder, gentler capitalism more akin to the various North European countries clustered around the middle and top of the chart.

Source: Vox.
Source: Vox.

The chart, however, is based on an odd measure of redistribution: the percentage of total income tax paid by the richest households (the Vox article doesn’t specify exactly, but it could be this OECD measure of tax revenue paid by the top 10%).  As Bruenig and Konczal both point out, defining the degree of redistribution like this has many problems: for example, it can make a very unequal society with low and flat(ish) taxes appear to be much more redistributive than a fairly equal society with high and progressive taxes. In many ways, the Vox article is simply measuring the degree of inequality in multiple ways rather than relating it to tax progressivity.

In light of this, what does it mean that Canada is right down there clustered with the US as a country that supposedly taxes progressively but doesn’t redistribute? Is this something the chart nevertheless gets right? Is it that while Canada is often presented a kinder, gentler state that can be set alongside its Northern European counterparts (themselves no absolute paragons and eroding slowly), the gap between it and the US is really not that wide?

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Canada Education

Means-test the rich, or another argument for eliminating tuition

Here’s an oversimplified choice for how to fund post-secondary education. Imagine you have two options for dealing with how people pay for post-secondary education:

  1. Universal free tuition, means-testing to see if you are rich enough to pay
  2. Universal tuition fees, means-testing to see if you are poor enough to not pay

Either of these can be brought into being in many ways. At base, however, these are two roughly symmetrical ways of achieving the same thing. Right now in Canada, we have a version of (2): tuition and a complex system of need-based grants and scholarships, student loans and tax rebates largely available if you prove yourself poor enough to deserve them. The thought of (1) instead occurred to reading Dr. Dawg’s excellent reply to the pro-tuition argument. Dawg, however, ends by saying that “[post-secondary education] should not be means-tested, any more than medicare or our highway system should be.” But why not means-test those who can afford to pay for higher education in a society as unequal as ours and where the benefits from education are so unequally distributed?

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Class Climate change Minimum wage Political Eh-conomy Radio USA

Kshama Sawant talks socialism in Seattle and beyond

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Last year, Kshama Sawant shocked the continent by winning a seat on Seattle’s City Council. She defeated an incumbent Democrat to become the first openly socialist city councillor in Seattle in a century. Sawant, an immigrant from India with a background as a software engineer and an economics professor, is a militant socialist activist who played a major role in the 2011 Occupy protests. Not your typical politician to say the least.

Untitled

Sawant’s surprise electoral win in Seattle has sparked discussion across North America. Last week, she made her first speaking appearance in Canada, addressing a fundraising event organized by the Coalition of Progressive Electors in Vancouver. I sat down with her before the event for a wide-ranging discussion touching on everything from her background in economics to the minimum wage compromise in Seattle and the role of transitional demands in fighting climate change to the history of sectarianism and building today’s left.

Side note: you can now subscribe to Political Eh-conomy Radio on iTunes. Follow this link.

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British Columbia Canada Workers

On the hunt for good jobs

There’s lots of talk about “good jobs” these days. At the same time, the expectations for what makes work not only “good” but even a “job” keep falling. It’s hard to fight for better (and less) work in light of decades of defeat for workers as an organized force, years of lingering post-crisis fallout and constant reminders that neighbours, robots, migrants…everyone is coming for whatever job you may have left (I have an article about this last bit in the upcoming issue of Briarpatch).

In a world of part-timers, permatemps, temporary migrants, contractors, sub-contractors, Uber “partners”, Taskrabbits and many others unemployed, the good job means something different than it did several decades ago. The white and male world of the “Golden Age” job is not yet gone but continues to be aggressively dismantled. We should be wary of misplaced nostalgia for the past or magic policy bullets that elide transformations.

Despite this, struggles over how work is organized remain central to how social life is organized. So even as the engine of job crapification makes its way through the world of work, we should be ready to demand more when the conditions are ripe. Progress in making jobs worse has been accompanied by continued technological change that could be making work shorter, easier, better-rewarded at the very least – at best, building conditions to transform social relations.

These scribblings are occasioned by a request to submit a micro (100 to 200-word) proposal for a local conference on the topic of creating good jobs in British Columbia. In truth we need thousands of words to assess our weaknesses, our strengths, our tactics and our strategies; in short, how to organize. I cannot pretend to know concrete demands that energies can coalesce around, whether locally or broadly. Demands are born out of organization.

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Climate change Political Eh-conomy Radio

Climate catastrophism and building a climate movement

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This will be a weekend of global climate activism. Marches and forums are planned around the world, with the largest set for New York City: the three-day Climate Convergence and the People’s Climate March on Sunday expected to draw hundreds of thousands. I spoke with Arun Gupta, co-founder of The Indypendent, author and journalist living in NYC for a critical but constructive take on the weekend’s events and climate politics more generally.

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Economic theory Workers

Someone is making slightly more than you and this report says it’s time for it to stop!

Here’s a familiar refrain: “Someone’s wages rose faster than someone else’s: report”. This depersonalized version sounds about as cynical as it should especially since the first someone is usually not a CEO whose wages are actually rising faster than everyone else’s – it’s that fat cat across the street, like you know, the garbage collector or maybe the admin assistant at your community centre. Or at least that’s who it is in this case as the headline actually reads, “Municipal employees’ wages rose twice as fast as provincial public sector: report.”

The report in question is one commissioned by the British Columbia government to put pressure on the wages of municipal workers, or even bring centralized bargaining to the still-autonomous municipal sector. The specific claims in the report as well as the shortcomings of its method have been thoroughly debunked by interested parties, both CUPE and the Union of BC Municipalities.

I want to use this as an example of something I seem to come across a lot lately… For beyond the wage comparisons, the economic indicator most prominently referenced in this report is the rate of inflation. More and more, it seems like any wage gain over and above the rate of inflation just isn’t fair. This is not a new argument and it is most easily applied to the public sector that has the stereotype of fat cattery stuck to it. Regardless whether it’s just me noticing it more, it turns out to be an odd one.

The basic problem is that this argument is out of line with the mainstream economic theory to which most of those making it ostensibly subscribe. That not-unfamiliar “go back to Econ 101” argument can be made here against those usually making it. In short, Under a whole array of conditions relating to the competitiveness of markets (perfectly so!) and the structure of production (very particular!), wages should be directly related to labour productivity.

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British Columbia Government

Actually making the carbon tax revenue neutral could fund a fair education settlement

As the teachers’ strike continues, the BC Liberals have turned to an old stand-by: fear-mongering that they will have to raise taxes if they are to fund a settlement that includes key demands like class size and composition limits. Ignore the fact that the government has shown itself consistently unwilling to even consider any such settlement; ignore also that there is nothing inherently evil about taxes. Even taking the government seriously here, there’s one source of education funding that the BC Liberals aren’t talking about, the carbon tax.

While debate rages about whether BC’s carbon tax is regressive or progressive, there is another aspect of the tax that has not received enough attention: the carbon tax has been used to actually justify cutting taxes by stealth. Indeed, the additional tax cuts being made under the cover of the carbon tax are estimated to amount to an average of $293 million per year for the next three budgets, according to the government’s own projections. That’s more than enough to fund the projected annual cost of class size and composition limits, projected to be $225 million per year.

The BC Liberals have pushed the carbon tax as a revenue-neutral measure. This means that all the tax collected in the form of the carbon tax is supposed to be offset by tax cuts elsewhere. Whatever our opinion of the carbon tax itself, the government has consistently overshot how much it cuts taxes to make up for collecting carbon tax revenue – and this overshooting has consistently been in the tens and hundreds of millions of dollars, or 10 to 20 percent of carbon tax revenues. Not learning from the past, the government is budgeting overshooting to continue into the future.

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Categories
Canada First Nations Workers

Industrious immigrant vs idle Indigenous meets reality

Here’s a familiar trope: immigrants are industrious and hard-working. Here’s another, opposite trope: First Nations are idle and lazy. And here’s a graph that beautifully calls into question this neat pair of stereotypes.

Source: Angella McEwen, Progressive Economics Forum.
Source: Angella McEwen, Progressive Economics Forum.

It turns out that off-reserve First Nations workers and recent immigrants face the same unemployment rate – one that is much higher than that faced by workers born in Canada. As Angella MacEwen, who posted this graph, points out it highlights that “there are systemic barriers that need to be addressed” in the labour market.

On the one hand, there is a gaping disconnect between right-wing rhetoric that extolls immigrants and the actual struggles faced by new immigrants. Indeed, the irony is that the right’s discourse when confronted with reality brings out the systemic barriers rooted in racism better than the facts by themselves.

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British Columbia First Nations Political Eh-conomy Radio

BC teachers and First Nations on the frontlines

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My guests today help take a fresh look at two issues where British Columbia is on the front lines of bigger social conflicts: that over the future of public education and that over resource development on First Nations lands.

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Canada Class Economic theory Inequality

The lament for Canada’s middle class

I’ve been posting more sparsely lately for a number of external reasons but this should change soon I hope. For now, here is the first major piece I wrote for Ricochet. In some ways, it’s the obligatory piece on Thomas Piketty’s Capital in the Twenty-First Century, but really it’s my way of trying to think through the hand-wringing about Canada’s middle class. Below are the first couple of sections, read the rest here.

The US is in the throes of a debate about inequality: It’s the Waltons versus the Walmart workers on food stamps, the runaway rich in the 1 per cent versus everyone else. Meanwhile, Canada’s inequality discussion has been largely confined to the woes of the middle class. Even the New York Times added grist to the mill by proclaiming Canada’s middle class better off than its US equivalent.

Similarly, while the US has made a veritable rock star out of French economist Thomas Piketty, whose 600-page economics tome Capital in the Twenty-First Century has topped best-seller lists, Canadian reception has been much more muted. This is a bit surprising because Piketty, in drawing out the link between capitalism and inequality, tells the story of a new Gilded Age replacing the post-war Golden Age that saw the middle class establish itself. One reason Piketty’s book may have left less of a mark on Canadian debate is that more of a middle class has endured in Canada. But will today’s middle class survive?

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