Given the continuous stream of media stories highlighting growing income inequality, it’s understandable that Canadians are worried about the implications. Thankfully however, the story of rapidly rising income inequality in Canada is just that, a great fictional tale.
Given the debate over the past few years about income inequality and the fact that many people do not consider how the income of individuals change over time, our recent study Measuring Income Mobility in Canada provides fresh evidence on how the incomes of Canadians change over the course of their lives.
The perennial debate regarding income inequality ebbs and flows but never disappears. For a variety of reasons, including the backlash against corporate bailouts in 2009 (well deserved), the election and re-election of Barack Obama, and a deluge of reports spanning the political spectrum, income inequality has vaulted to the front of the publics concerns. Unfortunately, the discussion of inequality is almost always fundamentally misstated because it ignores income mobility.
Its hard to blame Canadians for believing the great myth of income stagnation given the continuous stream of reports pointing to the low growth in average incomes over the past several decades.