In a medical sense, COVID-19, as highly contagious as it is, can be thought of as the great leveller. No one has immunity, and we face the health risk of this virus with a sense of our common humanity.
But in a socio-economic sense, it is not as contagious. The jobs some of us hold give us an economic immunity, and we face the economic risk of this virus with a very different sense of our interconnectedness.
If this is the case for equality of outcomes, then it is surely also so for equality of opportunity; the significant differences in social mobility between the rich countries hinting at the role governments play in determining the degree to which family background is destiny, the rich raising the next generation of rich adults, the poor seeing their children face low chances of upward mobility.
The Canadian federal government should enhance the human and financial capital of children in less wealthy families, enhance market incomes of lower paid workers, and enhance the security of working incomes by adapting three existing programs to new realities: widening their scope, making them more flexible, and making them easier to obtain.
The changing world of work is also a changing world of pay, a world that will likely lean toward greater wage rate inequalities, lower or stagnating incomes for the bottom 40 percent, and greater income insecurity for the broad majority.
I suggest three changes to current public policies that take incremental, but important, steps toward fostering capital accumulation among children from less wealthy families, increasing market incomes earned from that capital for the working poor, and finally enhancing income security for the broad majority.
These policies lean toward encouraging inclusive growth, in which the benefits of the new world of work and pay are broadly shared.
In this post I discuss the first policy proposal, which is:
Enhance human and financial capital by making community colleges tuition-free, and making the Canada Learning Bond more flexible
There is a movement afoot, and there is an election in the offing. Always a great dance to watch, no matter what the issue.
The latest show is taking place in Ontario, where “$15 & Fairness” is the rallying call for raising the minimum wage, and has found a willing partner in the province’s Premier who will go to the polls in the spring, but in the meantime has legislated significant increases in the minimum price for an hour of work. The same dance plays out in the United States, and in many cities and states a minimum wage of $15 per hour is becoming a reality.
The big question in Ontario is exactly that raised by The New York Times during the 2015 primaries when Bernie Sanders was battling Hillary Clinton for the Democratic nomination: “As the campaign for a $15 minimum wage has gained strength this year, even supporters of large minimum-wage increases have wondered how high the wage floor can rise before it reduces employment and hurts the economy.”
Something to think about, but how would you think about it if you were an economist? Here are four rules of the road that might come in handy regardless of which dance you might be watching next time.
Intergenerational cycles of poverty vary across Canada, with low income children in some places facing a less than one-in-five chance of growing up to be poor adults, but in others the rate is more than double. The strong majority of children raised by lower income parents face a greater than one-in-four chance of growing up to be low income adults, and for many these odds were at least as high as one-in-three.
The chance that poverty will be passed on across the generations is 30 percent for the country as a whole, and the majority of children, 54 percent, live in 97 of a total of 266 municipalities where the chances of falling into an intergenerational cycle of low income are between 25 and 30 percent. A further 24 percent of poor live in a community where these chances are at least 0.30 but under 0.35.
There are 23 municipalities with a 40 percent or greater chance of an intergenerational cycle of low income. These communities are all small in population, and account for two percent of the total number of children.
There are only seven of 266 communities in which the probability of a cycle of low income is less than 20 percent, representing only 1.6 percent of all children.
The average parent income in these communities is below the national average. This raises the possibility that geographic mobility may be an important aspect of intergenerational mobility. The two Ontario communities listed in the above table are not areas in which there was significant economic growth, but the distances and costs associated with moving to nearby regions that were poles of growth—more specifically Toronto—were likely low.
[ The findings described in this post are drawn from my recently released research paper called “Divided Landscapes of Economic Opportunity: The Canadian Geography of Intergenerational Income Mobility.” You can learn more about this research, and download a copy of the paper and host of other information by reading the page devoted to this project at: MilesCorak.com/Equality-of-Opportunity . ]