It is a particular honour to have my paper, “Income Inequality, Equality of Opportunity, and Intergenerational Mobility,” chosen for the 2014 Doug Purvis Memorial Prize. The prize is awarded annually by the Canadian Economics Association “to the authors of a highly significant, written contribution to Canadian economic policy.”
That is certainly honour enough, but I’m particularly grateful for another reason.
“Employment is up by one million since the recession ended.”
A statement like this may indeed be a big talking point when Statistics Canada releases the results of its monthly Labour Force Survey on Friday.
While a million more people at work sounds like a lot, the Canadian population has also increased by roughly the same amount with the result that the fraction of Canadians working has been pretty well unchanged for the last five years, and has yet to return to rates before the recession.
A million is a big number, but it’s not enough to signal a complete recovery from the recession.
The Great Recession has disrupted the lives of families and their children in an unprecedented way.
It has changed everyday life in some ways that can be measured by money, but in others that cannot, and at the extreme it has even led to a six-fold increase in the risk children will be physically abused.
Lost jobs, falling incomes, and foreclosures will likely compromise the capacity of children to become all that they can be, with the effects of the recession echoing not just across years, but also across generations.
The suggestion that the middle class is stagnating, the linchpin of Justin Trudeau’s economic platform—to the extent it exists—is an idea shamelessly borrowed from the United States.
Shameless it may be, but it is, nonetheless, true.
Clearly there are some ways in which we are all better off not withstanding what President Obama tells the American public, and notwithstanding how closely Canadian political leaders listen to him.
In 1980, a cell phone was something carried in a brief case; and a Sony Walkman—you surely recall the portable cassette player the size of a thick paperback that strapped “conveniently” to your belt?—was the cutting edge musical accessory.
But shops filled with more variety, and more quality, make us and our kids better off only to a degree, and not only because the power to blow your ear drums out has increased exponentially.
In 1980 middle-income Canadian families reported a total of $57,000 on their tax returns, and 30 years later, … well exactly $57,000.
Arthur Cecil Pigou made lasting contributions to the science of economics, but for macro-economists of a certain generation he will always be considered a laughingstock.
Professor Pigou taught at Cambridge University during the first decades of the 1900s, and had the misfortune of making a cameo appearance in the opening chapters of what is arguably the most influential economics book of the 20th century, The General Theory of Employment, Interest, and Money, written with eloquence, and at times a very caustic pen, by his colleague at the same university, John Maynard Keynes (whose last name, by the way, sounds like “Canes”).
Pigou’s big mistake was to suggest that the unemployed themselves were to be blamed for their predicament. To Mr. Keynes, the notion that the persistently high unemployment rates of the Great Depression were in some sense voluntary was worthy of scorn and ridicule.