The top 1% of income earners have taken a disproportionate share of overall income growth over the last 30 years, in Canada and in most Organization for Economic Co-Operation and Development countries, according to a study by OECD economists.
In Canada, the top percentile of earners captured about 37% of total growth in the last three decades, according to an analysis of tax filings by the OECD in 28 member countries with advanced economies.
That explains why economic growth is not leading to improved incomes for the rest of us – the 99% -- the study found.
The OECD paper urges governments to reconsider tax policies implemented in the past 30 years that have reduced the amount paid by the wealthiest income earners, as well as providing preferential treatment for capital gains and dividends, sources of income most likely to be held by the one per cent.
Canada is second only to the U.S. in its growing inequality. In the U.S., about 47% of total growth went to the wealthiest 1% between 1975 and 2007, compared to 37% in Canada, while in Australia and the U.K., about 20% of growth went to the wealthiest.
In Nordic countries and in France, Italy, Portugal and Spain, about 90% of growth went to the 99% of middle and low-income earners in the same period.
The growing gap between rich and poor was a focus of the Occupy movement, which resulted in mass protests and sit-ins in New York, Toronto and other cities in 2011 and 2012. It also became a flashpoint last year, during protests over the low U.S. minimum wage.
According to a recent Oxfam report, the wealthiest 85 people in the world hold as much wealth as the poorest half of the planet's population – or about 3.5 billion people. The issue of income inequality is being raised by the International Monetary Fund, by the Davos forum and by the Conference Board of Canada as a concern.
