Wednesday, June 13, 2012

Two good steps on income inequality

From Scott Brison, whose motion on the issue passed in the House of Commons today with multi-partisan support:
The motion I introduced simply asks that the house of commons direct the finance committee to study income inequality, an issue considered important by an overwhelming majority of Canadians. Then we can engage the business community, which is dealing with issues such as retirement security. We can engage the NGO community, and everyone from food banks to faith based groups that are helping low income Canadians. We can examine what the provinces are doing. We can look at what some governments in other countries may be doing better. The reality is that we can learn from that kind of observation.

I am not naive enough to believe that a study is going to fix the problem. But as a start we need to understand it and then move toward building public policy that will address income inequality.
From Paul Summerville, a "Canadian citizenship wage":
The idea of a guaranteed annual income has been around since the 1930s. In contemporary times that saw anger against corporate greed crystallized in last year’s Occupy protests, the Conference Board of Canada, through its chief economist, Glen Hodgson, suggested in December 2011 that it may be time to revisit this topic.

Its supporters include Senator Hugh Segal. Speaking before economists at a gathering in Ottawa last year, Segal said that the best and most cost-effective way to deal with poverty and its negative social outcomes is to bring everyone above the poverty line.

Summerville, now an adjunct professor at the University of Victoria’s Peter B. Gustavson School of Business, is rebranding the concept as a “Canadian citizenship wage”. “You would design the Canadian citizenship wage in such a way that families wouldn’t live below poverty,” he said. “What you’re trying to do is make sure that no Canadian lives below a certain income line.”

Summerville proposes doing this through a negative income tax. Espoused by the late American economist Milton Friedman, this model establishes a minimum annual income of which each citizen is assured, employed or not. For example, if the minimum is set at $15,000 and an individual declares an earned income of $10,000, the government cuts a cheque for $5,000.

“First of all, it’s designed to remove the stigma of welfare,” he said. “The second thing it’s designed to do is create a conversation about the rights and obligations of citizens.”
Good steps that will help get that conversation going at a national level.