- Paul Krugman points out that workers are receiving less and less benefit from technological advancements - and offers a simple policy prescription to ensure workers of all skill levels don't suffer unduly based on forces far beyond their control:
- And Sarah Cooper and Lynne Fernandez concur in the conclusion that a more fair distribution of income is the best treatment for poverty (among other problems).I’ve noted before that the nature of rising inequality in America changed around 2000. Until then, it was all about worker versus worker; the distribution of income between labor and capital — between wages and profits, if you like — had been stable for decades. Since then, however, labor’s share of the pie has fallen sharply. As it turns out, this is not a uniquely American phenomenon. A new report from the International Labor Organization points out that the same thing has been happening in many other countries, which is what you’d expect to see if global technological trends were turning against workers.And some of those turns may well be sudden. The McKinsey Global Institute recently released a report on a dozen major new technologies that it considers likely to be “disruptive,” upsetting existing market and social arrangements. Even a quick scan of the report’s list suggests that some of the victims of disruption will be workers who are currently considered highly skilled, and who invested a lot of time and money in acquiring those skills. For example, the report suggests that we’re going to be seeing a lot of “automation of knowledge work,” with software doing things that used to require college graduates. Advanced robotics could further diminish employment in manufacturing, but it could also replace some medical professionals....
So what is the answer? If the picture I’ve drawn is at all right, the only way we could have anything resembling a middle-class society — a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules — would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income.
- Meanwhile, Chrystia Freeland highlights the reality that even the 1% can't avoid the detrimental effects of inequality - with a TED event in Edinburgh serving to bring the issue to the forefront:
I was a speaker, too. I talked about my chief obsession, soaring global income inequality, particularly at the very top of the pyramid, and the uncomfortable fact that the same forces that are enriching the global super-elite are hollowing out the middle class in the West’s developed economies. Making capitalism work for everyone, and not just the plutocrats, I argued, is our most pressing political and economic problem.- Colin Horgan writes that Stephen Harper's speech to the UK Parliament this week was more partisan than prime ministerial. Bruce Johnstone notes that it was predictably laden with falsehoods as well. And contrary to Harper's efforts to claim immunity from international economic conditions, Krugman points to Canada's rising household debt load and housing prices as offering a test case for the dangers of future deleveraging shocks.
Taken together, and given the gilded venue, all of these comments amount to a significant shift in tone. Charlie Robertson, the global chief economist for Renaissance Capital, the Russian-based investment bank, was moved to post on Twitter, in reaction to the TED lineup, that the “intellectual ascendancy of neo-liberalism since ’70s may be in retreat.”
That is probably going too far. But we do seem to be at a turning point, or the beginning of one. Judging by this week in Edinburgh, even the winners in the global economy are beginning to realize that there are a lot of losers, too, and that it’s a problem. You might see that as too little too late; you might also see it as, at long last, a start.
- Finally, Lana Payne proposes that we get serious in addressing tax avoidance and evasion, while recognizing that the Cons' anti-tax ideology is standing in the way of global action:
Given Mr. Harper’s opinion on taxes, it should come as no surprise that he is said to be the problem at the G8 table. Tax havens, of course, are a practice by which the very rich get to hide their money so they can avoid paying taxes.
After all, if, as the prime minister believes, all taxes are bad, why then the need to seriously crack down on those who avoid them?
According to Canadians for Tax Fairness, Canada has been withholding support for two key aspects of the G8 tax havens action plan. They include that financial institutions in tax havens be required to have a public registry of the ultimate beneficial owner of all accounts, trusts or corporations and that there be multilateral tax information sharing between governments.
The tax fairness folks say these measures are important to “lifting the veil of secrecy that allows wealthy individuals and corporate tax evaders and criminal organizations to hide their wealth offshore.”
But Stephen Harper, it appears, would rather protect the cheats. Yes, well, don’t be surprised; there was that Mike Duffy affair.
So let’s get this straight.
The government — bent on forcing unions to publish nearly every transaction on a public website, taking up the time and resources of Revenue Canada officials, creating a pile of red tape for labour organizations, violating privacy laws and in all likelihood the Constitution — is opposed to a public registry to catch tax evaders.