EI, the 99%, the 1% and the widening gap

PV Commentary

As many activists have pointed out, the Occupy movement continues to have a huge political impact, even though most of the tent cities have been removed by the ruling class. Beyond the matter of who decides where poor people can live and protest, the issues posed by Occupy remain: what is the source of staggering inequality in our society, and what can be done to change this situation?

Claims by Canada’s right-wing politicians that “there are no serious problems” here are utterly false. A recent analysis from the OECD (a key institution of global capitalism) finds that the gap between Canada’s rich and poor is growing. The OECD says that income inequality is at a record high among industrialized (read “developed capitalist”) nations, and that the gap in both Canada and the U.S. is well above the 34‑country average.

In Canada, the chasm has been widening since the mid‑1990s, when the Chretien Liberals began slashing the social safety net. By 2008, the average income of the top 10 percent of Canadians was $103,500, compared to $10,260 for those in the bottom 10 percent. This ratio has widened to 10-to-1 from the 8-to-1 figure of the early 1990s. Moreover, the richest 1 per cent of Canadians saw their share of total income grow to 13.3% in 2007, up from 8.1% in 1980. At the same time, the top federal marginal income tax rates tumbled to 29% in 2010, from 43% in 1981.

The wider gap is largely due to deliberate steps by the ruling class to remove the redistributive impact of taxes and social benefits, which had previously cushioned the effect of unemployment. The growth of part‑time and temporary contract work is also eroding wage levels, as is the shift to “self-employment”.

As the OECD reports, before the mid‑1990s, Canada’s tax-benefit system offset more than 70% of the rise of market‑income inequality. Today, taxes and benefits offset less than 40% of the rise in inequality.

Similar findings emerge from other sources. A September 2011 study by the Conference Board of Canada said that income inequality has risen more rapidly in Canada than in the U.S. since the mid‑1990s, and that among 18 major countries, Canada had the fourth-largest increase in inequality since the mid‑1990s.

This is not just an abstract problem, it’s a matter of life and death. Montreal’s public health agency has found an 11‑year difference in life expectancy between men who live in the city’s poorest neighbourhood and those in its richest.

Instead of trying to reverse this deadly trend, the Harper Tories are consciously making things worse for working people. One scandalous example is the ruthless slashing of employees at Services Canada, those who are responsible for ensuring the flow of employment insurance benefits to jobless Canadians.

Just four years ago, in October 2007, 181,931 unemployed Canadians were waiting for EI claims to be processed, according to information published by the Globe and Mail last month. By October 2011, that number had skyrocketed to 360,481, which may seriously underestimate the real total. Some economists pin the actual figure by the end of 2011 at nearly 500,000.

This trend directly parallels a 13% decline in temporary and permanent staff in EI processing centres since October 2007. While hundreds of additional processing agents were hired during the economic crisis of 2008 and 2009, these employees and others have been let go without being replaced.

The result is catastrophic for jobless workers, many of whom are unable to find out why their benefits are delayed. Documents obtained by the Globe and Mail claim that telephone lines are so jammed that just one in three calls is answered. Claimants who have spoken to People’s Voice say it’s worse; one in Vancouver was unable to get a single phone call answered for an entire month, and could only get help by pressing Service Canada staff to bypass the regular procedures to give her access to a special line.

Are such policies the result of uncaring, thoughtless political decisions, or are they a deliberate strategy? Given that the negative impact of neoliberal policies on poor people is widely documented, it seems clear that pro-corporate governments like the Harper Tories know exactly what they are doing.

It seems equally clear that only massive political pressure by a highly united and mobilized working class – organized and unorganized, young and old, male and female, citizens and migrants, straight and gay – can force a shift to pro-people economic policies.

But as Miguel Figueroa told the recent Athens meeting of Communist and Workers’ Parties, “traditional bourgeois mechanisms of regulating and overcoming the crisis are increasingly ineffective… the resulting ruling class response to the crisis is more socially brutal, more militaristic, more dangerous to all humanity than during previous rounds of crisis…”

Our struggle begins with the fight to reverse neoliberal attacks such as the corporate drive to remove access to EI benefits. But our aim must be to topple the system which is based on maximizing corporate profits at the expense of working people. Capitalism is the source of the crisis, and socialism must be our goal.