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



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