What we should focus on is poverty, not inequality, writes William Watson in the Financial Post. Below is an excerpt from the article, which can be read in full here.
By William Watson, February 11, 2021
The COVID pandemic we’re all obsessed with isn’t our only pandemic these days. Inequality anxiety is also pandemic, in the sense of being talked and written about everywhere. If you google “inequality” and “laid bare,” you get 20 million hits. It’s a cliché of the real pandemic that it has revealed the true extent of inequality in Canada and around the world.
No it hasn’t! People have been tracking inequality for a long time. It has been laid bare, in exquisite digital detail, for a good three decades now. Reducing it has been the motivation of lots of innovative social policy, mainly revolving around child benefits and income supplements for working parents, with major reforms dating from finance minister Don Mazankowski in the early 1990s. And such policies have achieved their declared goals of big reductions in poverty rates among families with children, especially single-parent families.
The obvious hardship the current 100-year pandemic is causing many people proves only that pandemics cause hardship. It says precisely nothing about the more usual functioning of our society and economy.
The word “pandemic” not only includes the word “panic,” it also induces it. TD Economics has a new report out that suggests, citing IMF research, that pandemic-generated increases in inequality may even lead to social unrest. So: better do something about it.
But we have been doing lots about it, “we” in the sense of Canada but also “we” in the sense of most of the world. As is now well known — or should be — for the first quarters of the pandemic Canadian governments replaced more personal income than was lost as a result of the economic contraction. Lots of emergency programs weren’t very targeted but it will be shocking, after all the data are in, if it turns out they didn’t end up moving lots of resources from the middle and top of the income distribution to the bottom. As is certainly well known, roughly half of Americans who received special pandemic unemployment benefits saw their take-home “pay” increase as a result. People who worry that hardship will cause social unrest need to say something about all that has been done and is being done under the current social system to alleviate hardship.
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