by John Richards
Keith Banting and John Myles have assembled 17 articles on trends in inequality within Canada over the last three decades, 1980–2010, including substantial introductory and concluding articles written by themselves. This is a serious attempt to grapple with a serious problem. With apologies to authors whose articles I ignore, this review bears primarily on the articles by the editors and the one by David Green and James Townsend, who analyze explanations for wage polarization.
The editors start with two undeniable generalizations about income distribution in Canada over the three decades:
First, the distribution of market incomes grew more unequal. By one measure, the Gini coefficient of individuals’ market incomes, the increase in inequality from 1980 to 2010 was roughly 20 per cent. Taxes and transfers completely offset rising market inequality until the mid-1990s. Since then, post-tax post-transfer inequality has risen by roughly 10 per cent.
Second, post-1980 market income increases have been concentrated in the top quintile of income earners. Inflation-adjusted market incomes of those at or below the median essentially stagnated over the three decades.
Canada’s “neoliberal moment”
Why did the tax-transfer system become less effective over the second half of the three decades? The editors’ underlying explanation is ideological: neoliberal ideas symbolized by Reagan in the United States and Thatcher in Britain seeped into Canada. In the mid-1990s Canada experienced