Tuesday Morning Links

This and that for your Tuesday reading.

- Andrew Jackson writes that increases in Canadian inequality have been the result of deliberate policy choices:

In an important recent book, Inequality and the Fading of Redistributive Politics, Keith Banting and John Myles argue that, while rooted in the market, politics has also been a major force behind rising income inequality in Canada. They emphasize the impact of deep cuts to income transfer programs for working-age Canadians in Canada’s “neo-liberal moment” in the mid-1990s.

Their argument is reinforced by Statistics Canada research by Andrew Heisz and Brian Murphy presented to a recent Institute for Research on Public Policy conference on income inequality.

Rising market income inequality in Canada over the 1980s and continuing into the 1990s was broadly offset by redistributive government policies until the early 1990s. However, for a decade, from the early 1990s to the early 2000s, the redistributive impact of the personal income tax and income transfer system faded significantly, and then stabilized at a lower level.

This change was almost entirely due to changes in income transfer programs, as opposed to changes in the personal income tax system. And the big change was cuts to unemployment insurance (UI) and social assistance.
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The problem is that a rising percentage of working Canadians can find only insecure and part-time jobs at low wages. The major reduction of EI and social assistance income benefits has not been matched by other means of propping up low incomes from work, such as tax credits for the working poor and child benefits for low-income families. These remain relatively small programs.

Addressing rising income inequality will mean coming to terms not just with long-term trends in the market, but also with the political decisions we made some 20 years ago.

- And Rick Goldman agrees that we'll need a strong policy response to reduce inequality.

- Meanwhile, Carol Goar discusses the CLC's similar recognition that precarious work and underemployment represent growing problems for Canadian workers. And Kaylie Tiessen's CCPA study observes that the problem is particularly acute in Ontario.

- Tim Harford suggests that insularity and secrecy played a massive role in the 2008 economic meltdown - and offers some proposals to make sure the financial system is less vulnerable to both.

- Carol Linnitt comments on the oil industry's government-approved takeover of Alberta's educational curriculum.

- And finally, Matt Fairley's reporting on an increase in wireless rates across most of Canada makes it clear that there's only one type of competition which actually leads to more affordable basic services for consumers:

Canada’s big three wireless carriers have hiked the base prices for new plans by $5 in most markets over the past two months.

Rogers, Telus and Bell Mobility now all charge $80 per month for new smartphone plans with a new contract, $5 more than those same plans cost when they were introduced last year. The prices for other smartphone plans with more data cost upwards of $145.

The price hikes affect every province except Manitoba and Saskatchewan.
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Manitoba and Saskatchewan, however, have more competitive pricing. Due to strong regional competitors in SaskTel and MTS, Bell and Rogers plans start at $65 per month with five GB of data. An equivalent plan elsewhere in the country costs $55 more per month.