BY BRADLEY NORTHCOTE
A rising gap in wealth between richer and poorer Canadians signals challenges ahead for students. While a recent study shows a small number of CEOs are wealthier than ever, students are still looking for good, stable jobs. Some believe this can be addressed by the market, while others see the right actions by governments as key. There are competing visions of what governments should do.
A group of organizations under the banner of Oxfam International recently released a report, An Economy for the 99%, which highlights a growing wealth gap in Canada and the world as a whole. The report finds Canada’s two wealthiest CEOs have wealth equal to the poorest third of Canadians, or 11 million people. It also finds women still face barriers to higher-paying jobs. It concludes that increased taxation and greater investment of that wealth into public services and opportunities for women would improve the economy for a majority of Canadians.
Canada’s two wealthiest CEOs have wealth equal to the poorest third of Canadians, or 11-million people.
Some politicians will likely not be on board with the report’s recommendations. On Wednesday, Jan. 18, Kevin O’Leary announced his candidacy for leadership of the federal Conservatives, a move which he had teased since the race began. The TV personality and businessman gained infamy for controversial remarks on his flagship CBC show Lang & O’Leary Exchange, such as that a previous Oxfam study revealing the world’s 85 richest people have as much wealth as the poorest 3.5 billion was “fantastic news.” Complaints prompted a review of his remark by CBC’s ombudsman.
Although this soundbite was played up for shock value, the perspective behind this thinking finds some support among advocates for market-based solutions to poverty.
“Having inequality, that’s just a natural byproduct of a market system. You want to have incentives for people to work hard, be innovative, and [be rewarded for this…A rising tide lifts all the boats,” says Jason Dean, a professor of economics who teaches courses in macro- and micro-economics at Sheridan College’s HMC campus.
Dean, however, has a more qualified enthusiasm for inequality.
“There are questions about how much inequality we actually need. Some people would argue that [rich people] work hard because that’s who they are and they’ll work hard anyway, so maybe taxing [the rich more] and giving it to the poor isn’t such a bad idea.”
The changing nature of jobs is one cause of students’ difficulties. “One of the main [reasons] for inequality is skill-biased technological change,” which Dean says means there is rising demand for higher-skilled jobs.
Some research supports this claim. According to the Mowat Centre, a public policy think-tank at the University of Toronto, “Millions of Canadians might lose their jobs to automation in the next decade. Hundreds of thousands of others could see their full-time positions replaced with short-term, temporary gigs.”
For now, though, even the 15 per cent of 15- to 24-year-olds who are working, according to a CIBC report, find most new jobs are low-paying, service sector work with little opportunity for advancement. Dean says this means, “Students should think more of themselves as their own business,” and colleges should invest in their students’ entrepreneurial efforts to enter industries in need of competition.
The increasing popularity of entrepreneurialism among millennials has, according to the magazine Canadian Business, led to a growing trend of freelance work. This Canadian trend resembles the U.S., where independent management service MBO Partners predicts freelancers will make up half of the workforce by 2020.
For those who don’t feel ready to enter the workforce, Dean encourages further education as a way to avoid getting into a “rut.”
“One thing I notice at Sheridan is, a lot of students are not just coming out of high school. Many of them went to university . . . and [later] found a better fit here, taking business courses,” Dean said. A Colleges Ontario study from 2014 shows other colleges are seeing this trend as enrolment by students with university degrees increased by 40 per cent from 2009 to 2014.
Female students entering the workforce face unique challenges. The Oxfam report found that among the top 10 per cent income-earners in Canada in 2013, 30 per cent are women. Meanwhile, the lowest-paid and most precarious jobs are predominantly held by women.
Dean says a pay gap between women and men cannot be reduced to gender discrimination by employers, because other factors such as prior education affect women’s income. Career counselling at colleges, he says, could encourage female students to pursue opportunities challenging the gender-driven expectations of friends and family.
This does not, however, account for what Oxfam calls “unpaid care work,” or child-care and other work performed mainly by women in Canadian households. A 2008 collaborative study by Oxfam Canada and the Canadian Centre for Policy Alternatives (CCPA) found, “women [in Canada perform] nearly twice as many hours of unpaid work as men.”
However students choose to react to this growing wealth gap and its impact on jobs, they may agree on one thing Dean was fond of repeating: “The market economy is not going to go away.”