POLS318 Week 5A Feb 3 - Lecture Notes - no class Feb 5
Income Disparity in Canada
Overview of Income Statistics
Income inequality is increasing, particularly at the higher end of the income spectrum.
In 2007, the top earners had income growth rates exceeding those at the lower income levels.
share of total income belonging to the
richest one per cent of Canadians rose from 8.1
per cent in 1980 to 13.3 percent in 2007r cent in 2007Income growth for the richest segments continues despite a general 5% increase across the board.
It's still a huge increase in terms of the total income that belongs to the richest segment our society.
Income Distribution
The top 10% of earners in Canada account for approximately 34% of total income.
The wealthiest 1% take home 10% of the total income despite comprising only 1% of the population.
The bottom 50% earners collectively receive only 18% of total income.
Disparity in Executive Salaries
Average salary for the top 100 chief executive officers has surged to $14,900,000.
This salary figure represents 246 times the income growth of those at the lowest income levels.
Income inequality is exacerbated when considering wealth beyond salaries, such as investments and property.
Wealth Distribution
Wealth Ownership in Canada
In 2019, the top 20% of households owned 75% of total wealth.
A quarter of this wealth is concentrated in the hands of the top 1%.
Overall, this showcases significant wealth inequality within the Canadian population.
Economic Impacts and GDP
Wages vs. GDP Growth
Wages and salaries as a percentage of GDP have diminished over time while corporate profits have increased proportionally.
Research from the Canadian Center for Policy Alternatives indicates if wages had kept pace with GDP growth, Canadians would have seen an increase of $200 on their weekly paycheck equating to an additional $10,000 a year.
Despite increased GDP, average salaries did not see a corresponding rise.
Labor Market Dynamics
Hours Worked Across Income Levels
Average hours worked by different income brackets remain stable—meaning higher earners are not necessarily working harder. They’re working approximately the same number of hours, whether you’re in the top 1% of income earners or bottom 1% of income earners, indicating that factors other than hours worked are influencing wage disparities. This raises questions about the effectiveness of current policies aimed at addressing income inequality, as mere increases in GDP do not translate to better earnings for the average worker.
Understanding Social Inequality Factors
So when we look at social inequality, we look at these different differences between income bracket, but it's not enough to really understand social inequality. We have to go beyond this Gini coefficient or this distributional view of income. We also have to think about issues like race and ethnicity and gender and age and disability because these factor in to inequality. So despite the fact that the GDP has increased, our economic output has increased in Canada, still women earn about 88% of what men earn in Canada
Besides income disparities, other factors influencing social inequality include race, ethnicity, gender, age, and disabilities.
Gender pay gap remains significant; women earn 88% of what men earn in Canada.
The racial income gap reveals that Canadian-born women tend to earn more than immigrant or Indigenous women.
5:07 Women are still underrepresented in the top income bracket. We see income gap that persists across nationality, that persists across immigration status and even occupational status. And so we'll pay a little attention to that today, but Canadian born women earn more than immigrant women earn more than indigenous women and so forth. So, again, inequality translates across these racialized divide, not just gender lines. So we have to look at other indicators to understand inequality.
5:50 Housing and Social Mobility
Importance of Housing
Studies in the U.S. show a lack of homeownership among Black Americans has hindered wealth accumulation.
Housing access is crucial for social mobility.
In Canada, increasing difficulties in access to affordable housing pose ongoing challenges, with rental costs equating to mortgage payments.
Homeowners see a net worth increase of 29% over their lifetimes compared to a 19% increase for renters.
7:34 Employment Scenarios and Labor Market Analysis
Examples and Scenarios
SLIDE 13 - Scenario provided: Two full-time workers with differing hourly wages; one at $28/hour with benefits and the other at $17/hour without benefits. WHY?
Discussion of labor market value reflects societal valuation of care-related roles.
But women that tend to be in the care industry, you know, they tend to have lower salary just because it's just because it's seen as more like domestic work, more feminized work.
8:53
And that's a societal choice that we undervalue that type of work
Theories on Wage Discrepancies and examples of Policy Approaches with each:
9:07 Human Capital Theory: Wage differences are based on education, skills, and training. Higher education equates to higher salaries, suggesting from a social policy perspective, there should be government investment in education to improve labor market outcomes and then that will lead to better outcomes in the labor market
10:36 Marxist Perspective: Discrepancies arise from power imbalances; employers seek to minimize wages for profit maximization, indicating a need for structural changes to address inequality.
It's based on structural inequalities in the system that allow employers to exert power and keep salaries down to increase their profit. So in this kind of context, the social policy approach would be to put in place some anti discrimination laws to regulate to put in place, like, a minimum wage to protect the workers
11:45 Feminist Critique: Gender roles undervalue care work (feminized jobs). From a policy perspetive, you’d want advocacy for policy changes such as parental leave, childcare support, and pay equity is warranted to ensure that in particular work that women do is not undervalued. More recognition of the importance of care work, more flexible schedules to allow women to manage their care responsibility with activity.
12:29 Critical Race Theory: Those that do critical race theory will tell us that historically and currently, we have racial hierarchies that are embedded in our markets and our institutions, and that discrimination is systemic. It's not accidental. And we've seen it. We do great research now where if you look at CVs, they get two CVs, and one is an ethnic name, the other isn't, and the likelihood of getting jobs just by your name.
Racial hierarchies have systemic impacts on employment opportunities and wage earnings.
So in terms of policy approach, clearly, we'll have anti discrimination approaches. We'll have equity programs in order to dismantle some of these structural barriers that create advantages and disadvantages for particular groups.
Gender Dynamics in the Labor Market
SLIDE S 14-16 Women in the Workforce Statistics (to 16:40)
Significant number of women hold part-time positions; this flexibility is essential for fulfilling care responsibilities at home.
Time allocation data: Women perform 2.8 hours/day on housework compared to men's 1.9 hours/day. Means women do up to 6.3 more hours of housework compared to men
Women on average earn $0.69 for every dollar men earn; this pay gap worsens for women of color and Indigenous women.
The gender gap widens for racialized and Indigenous women
16:40 Slide 17 Occupation Concentration
Occupation concentration refers to the disparity in the types of jobs held by men and women, which often contributes to the overall wage gap.
This phenomenon can perpetuate economic inequalities, as certain industries that employ predominantly women tend to pay lower wages compared to those dominated by men.
Gender segregation persists in job roles, with pink collar professions (predominantly female) viewed as undervalued compared to blue collar jobs (predominantly male).
Example disparity: Truck drivers (mostly male) earn $45,000 vs. early childhood educators (mostly female) earning $25,000.
Women tend to be concentrated in part time minimum wage jobs, again, because of the lack of affordable childcare. And so this suggests that the labor market isn't equal for men and women.
So you see this clear kind of dichotomy in our labor force based on gender roles and society within a society besides gender role.
18:58 Precarious Employment
Nature of Precarious Jobs
Part-time, self-employed roles often lack benefits and labor protections.
Workers in the gig economy, such as Uber drivers, often bear the burden of costs related to health and safety themselves.
“SHECESSION (RATHER THAN RECESSION) VIDEO INTRODUCED 22:37-27:11
dealing with what happened during COVID where women were hit differently from an economic perspective. This video deals with the pandemioc but really applies to any kind of econmic recession - who bears the economic cost of a slowdown of our economy?
So, basically, there's a she's session because women tend to be in the service industry, food, retail. This tends to be part time, tends to be more flexible type of employment, right, because it's not nine to five, and so it allows to manage taking care of the kids. When you look at the food industry, which has been the number one rising sector. So our economy is changing, manufacturing is declined, but everything that has to do with food and services, that is on the increase
Tend to see racialized groups working in food and accommodation industry and they’re really vulnerable to these economic trends.
SLIDE 21 - PERI COULD USE THIS AS AN EXAMPLE TO SHOW HOW POLICIES WERE IN PLACE TO PROTECT THOSE PEOPLE WHO COULD READILY SWITCH TO WORKING FROM HOME, HAD THINGS IN PLACE LIKE COMPUTERS, ETC. BUT THOSE WHO WERE PART OF THE FOOD AND ACCOMMODATION AS WELL AS THOSE WHO WERE DEEMED NECESSARY (NOT DOCTORS) WERE FAR MORE VULNERABLE AND HAD LESS PROTECTIONS.
28:40-29:16 Those people during the recession that could work from home tended to be those better jobs with more protections. Right? These are people that are in the public sector that have protections, and you see just an increase along the income. The better off you are, the more you were able during the pandemic as a family to work from home. But on the right, you see the percentage of dual earner couples in which at least one is employed in accommodations and food services, and you see the reverse relationship.
29:16
So those families that are working in food and services, they tend to be much more vulnerable and unable to work from home than those that are already well off.
29:16 SLIDES 23-24 AFFIRMATIVE ACTION
Affirmative Action is actually one of the initiatives that governments have been able to put in place to help women and to help racialized minorities.
33:45 But affirmative action is this umbrella concept that refers to policies that active actively seek to increase representation or access for historically disadvantaged groups
29:59 So, what is Affirmative Action: Student says that it’s like, reserving seats for giving preferential treatment to groups that have been disadvantaged in the past.
Prof: So giving some preferential treatment to marginalized to even up the like, a leg up to even up the the dynamic.
So you see that in employment, like, preference will be given to women, racialized minorities, LGBTQ plus. You'd see that often at least in academic jobs.
31:00 Now we use more of an informal mechanism where we encourage people from marginalized groups to apply. And then when you select someone that is not from a marginalized group, you have to explain your rationale for why you chose that candidate or why that candidate was had more merit than those that are in the marginalized group. So it forces a reflection, at least in the public sector, on the employer that in in in how they assess candidates. So so, you know, when you look at affirmative action, it's about hiring, but it's also about admissions into university pro programs. It's about reparation, repairing some of these inequities that are built into our program, ensuring that there's more diversity in our workforce.
Is Affirmative fair?
32:35 Some people will say it's unfair because you're not treating everyone equally. And so it's a form of positive discrimination, if you will, but it's still some form of direct discrimination.
Others argue that affirmative action is necessary to level the playing field and create opportunities for historically marginalized groups, ultimately leading to a more equitable society. This debate highlights the ongoing tensions between equality and equity, as well as the differing perspectives on how to achieve social justice.
The argument for affirmative action suggests that it provides opportunities to historically marginalized groups, allowing for a more equitable playing field.
Critics argue that it undermines meritocracy and can lead to resentment among those who feel overlooked in the hiring process.
There's also a debate about whether affirmative action addresses the root causes of inequality or merely serves as a band-aid solution.
Ultimately, the effectiveness of affirmative action programs can vary significantly depending on implementation and the specific context in which they are applied.
SLIDE 24 is a comparison chart between Ontario, Canada (Federal) and US 33:45 - KEEP IN MIND the federal government doesn't have jurisdiction over social policy
but it has put in place in its public sector, The Employment Equity Act. It has, you know, the Charter of Rights and Freedoms, which embeds legal treatment of individual rights.
34:38. It has a regulatory approach. And in the public sector, it can force or enforce, like, reporting requirements, audits to make sure that the different departments have some kind of balanced representation in the public sector.
In Ontario, it's the same thing. The type of policies that are put in place are put in place in the public sector. Government doesn't intervene in the market.
They can't force load laws to hire a more diverse labor force. It can only, again, preach for example. So in Ontario, they have employment equity. You might have special programs to encourage individuals. So Queens is part of the public sector.
35:26. We have the Promise Scholarships, and we give a scholarships to people that are first generation, the first people in their family to go to university. And often, this is indigenous groups or racialized groups, but first generation students
SLIDE 26 36:50. So I want you at your table to ask yourself and categorize whether these policies are
A. Neutral. They apply to everyone with no intended target.
B. Equity seeking, because they're attempting to level opportunity for different groups, seeks to have equal participation of your labour force, such as disability accommodation
C. Redistributive where ensuring you have a certain outcome. Example is setting aside resources for one particular group, trying to have an impace on the outcome.
a. A university removes names appearing on applications, from the applications during first round screening, so don’t know what ethnicity is: Equity Seeking Because the intent here is to reduce the to eliminate the bias that might come either through gender or ethnicity or even class as because names could be a marker of those things.
But could also be seen as neutral as just treating everyone equally. The point is that it removes a barrier which is why its equal opportunity, although it is purposeful because it could create an unfair advantage for some candidates and so that’s why it probably could fall within equity seeking.
b. 40:26. A government funds scholarships exclusively for Indigenous students: It is redistributive because you're setting aside resources specifically for that group. So remember, redistributive, you're trying to have an impact on the outcome and on kind of the results. So it's not like leveling opportunity. So it's not like leveling opportunity. It's really ensuring that you in terms of outcome, you have a certain percentage of indigenous students, and that's why it is under redistributive. is linked to obviously trying to redress some of the historical harms
But some can say that it is equity seeking because it allows to promote access to education and so forth. But the distinction really comes from the focus on outcomes in this particular case
c. 41:36 A company posts job ads only in mainstream newspapers: Yeah. So it's neutral because you're not targeting any groups. You're not giving any preference to anyone. It applies equally to all members of society at least in the wording
d. 42:49 A public agency sets a goal that 40% of management hires will be women: Redistributive It looks at the outcome because it defines 40% of the jobs will be dedicated to women. Right. So this is sort of similar to a quota approach. So because it's focused on these outcomes and that's gonna influence the final decisions.
Could also be equity seeking because not determining outcomes, they want 40% women where traditionally been far more men.
e. 44:08. A workplace introduces mandatory accessibility accommodations. Equity Seeking So this would be in the category of equity seeking because you're removing barriers. You're removing structural barriers, physical barriers in the case of handicap accommodation. Equity Seeking - This seeks to do is have equal participation of, you know, your labor force.
f. 46:29 A union seniority system determines promotions automatically - Neutral because everyone is treated equally, regardless.
g. 48:03 A mentorship program pairs racialized. youth with professionals - Equity seeking. It's not like you're giving money directly to influence the outcome, but you're pairing people together. So you're trying to create network opportunities to to segue to the labor market. So you're trying to give a leg up to individuals. There's no guarantee. There's no kind of impact on the outcome.
h. A tax credit for companies that hire persons with disabilities. Redistributive because it is a tax credit, its monetary and alters the outcomes because it means that these companies will hire more people with disability, so it’s shifting economic resouces to affect outcome.
50:34. BROADER ECONOMIC CONTEXT
How the labour market is changing and how the world of work is changing.
Ontario is investing in electric vehicles or is is trying to create new jobs for these skilled individuals that were working in the manufacturing sector to find new jobs for them. So, again, a lot of these jobs were concentrated in Ontario, so Ontario's economy was particularly hit with the decline of manufacturing job
The more unions that you have, the more protections that you have for the workforce. Now in Canada, the rate of unionization has fallen from 38% in 1981, and it's now 29%. So 10% drop in terms of unionization in the past thirty years. So that's noticeable, and that has an impact on working conditions.
It also has an impact on income shares for the top 10%. Those two things are co correlated. Right? If there's no unions, if there's no regulation, and businesses can skyrise their profit and they're not, you know, compensating employees, then, again, you have the stark contrast. And this really matters because it can lead to abuse, abuse of businesses.
So, again, just to reproduce this, you know, decline of our agriculture, decline of resources, decline of manufacturing, it construction is on the increase. Why do you think that is?
55:42. But every time a government goes through a recession, the best thing a government can do is invest in infrastructure. So right now, Carney, building Canada up, this is investing in infrastructure in the face of the slowing economy because of trade with the US
SLIDE 34 57:27 Now what I wanted to show you as well is the prevalence of types of employment by by types of industry.
So we see that those working the health care field, 20% are part time workers. In the retail trade, 35% are part time workers. Again, these are what we refer to as precarious forms of employment. In professional scientific technical service, you see temporary employees or prime time employees. They're fairly low in that context, but you have lots of, like, selfishness at 19%.
60:08. Again, these are precarious. Often, you'll see people in part time work that are taking two or three jobs because it's just not enough. One job isn't enough to to provide for your families. So, you know, they're more likely in that category, especially in the retail and in the service industry, to be holding down two temporary jobs, which we think would be quite difficult.
SLIDES 36-37. 60:55. Now when you look at the prevalence of forms of employment by demographic, here you see that immigrants are much more vulnerable, and this is, you know, women, and this is men. And, again, the number is below for immigrants and aging.
On Thursday, we'll take a look at what these kinds of jobs are, how they're linked to automation, how they're linked to the gig economy
Labor Market Statistics
60% of employment growth since the mid-1990s in OECD countries, including Canada, has been in non-standard or precarious work.
57% of job increases are in the service sector, concentrated in low-wage, part-time, and temporary offers.