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Date: | Wed, 7 Nov 2001 15:23:20 -0500 |
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The Toronto Star, Ontario ed.
EDITORIAL, Thursday, November 1, 2001, p. A34
Worth Repeating
Very little trickles down to the poor
The Centre for Social Justice released a report this week saying the poor have
been
bypassed by economic growth over the past 25 years. Here is an edited excerpt
from
that report, When Markets Fail People:
Years of neo-liberal policies have promised that the private market is the
best solution
to inequality and that somehow we can simply grow our way out of poverty. That
a
booming economy (as measured through improvements in gross domestic product)
will
result in income improvements being spread throughout the economy and that
poverty
will shrink.
It just is not so.
Market income improvements during economic booms are very sticky. They
accumulate at the top, flow somewhat into the top half of income earners,
dribble down
to the poorer half of the population and completely dry up before they reach
the
poorest 10 per cent among us.
This pattern is consistent in the three boom periods since 1973. The
implications are
significant _ when we are in recovery years, the majority of the population
will get less
than their fair share (anything less than 10 per cent will result in a
widening of inequality)
and the poorest will always get almost nothing. The best off among us _ and
those who
need it least _ will get much more than their fair share.
The further frightening statistic is that the share of market improvements for
the top 10
per cent accelerates over the last three generations. Their market share
increases from
23 per cent in the boom of the 1970s, to 28 per cent in the 1980s to a
whopping 37
per cent in the 1990s _ almost a doubling of their share.
This is certainly a prescription for instability as the promises of the
neo-liberal pundits
ring increasingly hollow. It is a prescription for social unrest and growing
despair when,
in the midst of economic prowess, inequality grows and many see little
improvement.
The deep recession of the early 1980s saw a loss of market income for everyone
except those at the top.
The pattern of the losses deepens as we move further down the income ladder.
A full 60 per cent of market income is lost for those at the very bottom.
The second recession of the last generation (1989 to 1993) shows an even more
disturbing pattern. Those at the top lost 9 per cent of their income.
Losses of this magnitude are felt by half of the population. But when you get
below the
midway point in incomes, the loss accelerates. For the second poorest 10 per
cent
among us, it slides to a 45 per cent loss of income.
And the poorest among us shouldered an unbearable 86 per cent loss of earnings
in the
most recent recession.
Category: Editorial and Opinions
Uniform subject(s): Corporate finance; Economic conditions and economic
policies;
National politics and governments; Statistics; Stock market and stock
exchanges;
Taxation and income tax
Length: Medium, 366 words
Copyright
© 2001 Toronto Star, All Rights Reserved.
Doc.: 20011101TS0000087
This material is copyrighted. All rights
reserved.
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