Appeared in Business in Vancouver – May 20, 2014
“Lies, damned lies, and statistics.” As Benjamin Disraeli, who few remember, said. Or Mark Twain, who many remember, said. Or Leonard H. Courtney, who nobody remembers, said.
More currently, we pick up statistics measuring the middle class. Careful, a heavy load. Or is it lighter since we last checked? Sagging alarmingly in the middle of Canada? Is there an app for that?
Spool back to the statistic wielded by the (where is it now?) Occupy movement that sprang up in the U.S. in 2011 and spread to mimicking Canadians eager to bludgeon the super-rich: “We are the 99%.”
Accurate? It’s depressing if you can’t depend on a statistic flourished by heated leftists – many looking like second-year university poli-sci students and their dogs, if the Vancouver demo was typical – aimed at rousing the suffering multitude.
Organization for Economic Co-operation and Development figures for Canada broadly support the claim: growth of pre-tax incomes of the top 1% between 1981 and 2012 was 37% of the entire national income rise (the American 1%’s share was 47%).
Surprise: studies by two Berkeley economists, Emmanuel Saez and Gabriel Zucman – much influenced by Thomas Piketty, the French economist whose book Capital in the Twenty-First Century has gripped enough heavy thinkers to become a bestseller – indicate fully nine-tenths of the American 1% properly belong with the 99%. The Occupy movement cry should have more inclusively been: “We are the 99.9%.”
Seems the wealth of this bottom end of the 1% is stagnant. Their slice of the income pie hasn’t changed in 10 years. Their Canadian counterparts may be resorting to the occasional Kraft dinner or Big Mac deal, possibly served by temporary foreign workers pushing our fine Canadian kids out of their rightful minimum-wage jobs.
So only 0.1% of Americans qualify as not only unimaginably super-rich, able to swim in a vat of money like Walt Disney’s Scrooge McDuck, but getting richer. Unlike the rest of the 1% immediately below them, in the last 30 years their wealth has quadrupled.
Bloomberg reports they constitute only 16,000 families, so few they could know each other by name or family connection. The entry fee into this exclusive club is US$100 million. Their assets total US$6 trillion, 11.1% of all U.S. wealth.
Something easily grasped in the thicket of statistics: they’ve regained the same fraction of U.S. wealth that they had in the Roaring ’20s. Hmm. We know how that ended.
Canadians can’t compete in belonging to the 0.1% set, but we can hoist an arguably prouder and certainly broader accomplishment: our middle-class, after-tax median income leads the world, passing the U.S., Norway and the Netherlands as of 2010, according to the Luxembourg Income Study Database.
Craig Alexander, chief economist for the Toronto-Dominion Bank, attributes this to Canada’s better performance in the 2008-’10 recession, including the lowest unemployment rate in 30 years. (Odd that affection for former finance minister Jim Flaherty didn’t translate into political gain for his boss, Stephen Harper.)
The sticky matter remains that in 2012 the average pay of Canada’s top 100 chief executive officers was an astonishing 171 times higher than our median take-home pay ($45,488). In 1995 the figure was 85 times higher. So claims the Canadian Centre for Policy Alternatives, routinely described as “left-leaning” but I’d say democratic socialists and not-so-democratic ideologues sharing a dislike of capitalism.
The heart of the matter is the appeal to envy. Dr. Johnson sagely noted: envy is the only one of the seven deadly sins that can be exercised at all times and in all places. That may be the only trustworthy figure – seven.
© Trevor Lautens, 2014