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The Progressive Economics Forum

Coyne on Inequality

Letter to the Editor

Ottawa Citizen, December 18

 Andrew Coyne (December 14) leaps on a study by TD Economics to claim that “income inequality in Canada has remained more or less flat since the mid 1990s” and that the big surge in the rising income share of the top 1% took place before 1998.

 As Coyne himself says, “the reigning Canadian expert” on the incomes of the top 1% is Michael Veall of McMaster University.

 In the most recent issue of the Canadian Journal of Economics, Veall says that “the surge in top income shares began in approximately 1985 and continued through to 2007.” The top 1% share of all income fell slightly from 1998 to 2002, but rose to 2008 before falling back a bit in the recent recession.

This pattern is important because it shows that inequality in Canada rose even in a time of low unemployment and steady growth. A rising tide no longer lifted all boats.

Coyne should take much more seriously the fact, confirmed by the TD study, that the share of all income in Canada going to the top 1% has almost doubled from 8% in the mid 1980s to almost 15% today.

Ed Broadbent

Chair, the Broadbent Institute.

 

 

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Comments

Comment from duncan cameron
Time: December 18, 2012, 12:37 pm

Miles Corrack (see: milescorrack.com) for an elegant putdown of the @acoyne article which has attracted nice twitter traffic. Also available on his site, Miles just critiqued the TD report that prompted the @acoyne article.

Comment from rcp
Time: December 19, 2012, 6:41 am

The Coyne article is available here:

(http://fullcomment.nationalpost.com/2012/12/14/andrew-coyne-canadian-income-inequality/)

and is worth reading. Ed Broadbent might want to consider that the proportion of people below the LICO (low-income cutoff) has declined sharply since the late 90’s. See:

(http://www.conferenceboard.ca/hcp/hot-topics/caninequality.aspx)

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