UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

The distribution of wealth in Canada : its existing pattern and changing trend Park, Jungwee 1987

Your browser doesn't seem to have a PDF viewer, please download the PDF to view this item.

Item Metadata


831-UBC_1987_A8 P37.pdf [ 5.03MB ]
JSON: 831-1.0097066.json
JSON-LD: 831-1.0097066-ld.json
RDF/XML (Pretty): 831-1.0097066-rdf.xml
RDF/JSON: 831-1.0097066-rdf.json
Turtle: 831-1.0097066-turtle.txt
N-Triples: 831-1.0097066-rdf-ntriples.txt
Original Record: 831-1.0097066-source.json
Full Text

Full Text

T H E DISTRIBUTION OF W E A L T H IN PATTERN  AND  CANADA  -  ITS  EXISTING  CHANGING TREND by  JUNGWEE  PARK  B . A . , Korea University,  A THESIS  1985  S U B M I T T E D I N P A R T I A L F U L F I L M E N T OF  THE REQUIREMENTS FOR THE DEGREE MASTER OF  OF  ARTS  in T H E F A C U L T Y OF G R A D U A T E Department of Anthropology and  We accept this thesis as to the  STUDIES Sociology  conforming  required standard  T H E UNIVERSITY OF BRITISH C O L U M B I A October  1987  © Jungwee Park,  1987  In  presenting  degree  this  at the  freely available copying  of  department publication  of  in  partial  fulfilment  University  of  British  Columbia,  for reference and study.  this or  thesis  thesis by  this  for  his thesis  or  scholarly her  of  purposes  may  representatives.  The University of British Columbia 1956 Main Mall Vancouver, Canada V6T 1Y3 Da  ,e  At  l«-.  be  It  'PI  ZclJjp  is  for  an  advanced  that the Library shall  I further agree  for financial gain shall not  A^ofM^p  requirements  I agree  permission.  Department of  the  make it  that permission  for extensive  granted  head  by the  understood  that  be allowed without  of  my  copying  or  my written  ABSTRACT  The aim of this thesis is to investigate the existing pattern and trend of the distribution of wealth in today's theoretical both  accounts  classical  Westergaard objective  of  (Marx,  this  came  review  unequal  was  from  gathered Osberg,  concerning such issues  wealth  Durkheim,  and  First, the  Weber)  and  theoretical  perspectives  contemporary  of  (Blumberg,  to  describe  the  sociological interpretations  and  of the distribution of wealth. Second, existing evidence was reviewed  and new data was  components  empirical evidence.  Canada. In doing so I explore both  and Resler, Porter, and Clement) social thinkers were discussed. The  explanations  data  and  changing  as  on the Hunter,  welfare  wealth distribution in Canada. The existing Vaillancourt,  Rashid,  and  state, income disparity, and  Oja.  New  important  data wealth  was examined to augment the previously existing data. The Canadian  distribution over  time.  proved The  to  be  unequal  concluding chapter  for this set of findings.  ii  and  to  have  briefly reviews  become possible  slightly  more  explanations  TABLE OF CONTENTS ABSTRACT  ii  LIST OF TABLES  :  ACKNOWLEDGEMENT  iv vii  I. I N T R O D U C T I O N  1  II. T H E O R E T I C A L A C C O U N T S OF T H E D I S T R I B U T I O N O F W E A L T H A . Classical Accounts of the Distribution of Wealth in Capitalist Societ}' 1. K a r l Marx 2. Emile Durkheim 3. Max Weber B. Contemporary Accounts of the Distribution of Wealth in Industrialized Societj^: A Canadian Focus 1. Paul Blumberg 2. John Westergaard and Henrietta Resler 3. John Porter 4. Wallace Clement »  7 7 8 13 17 22 23 30 35 38  III. E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H A . Current Evidence 1. Lars Osberg 2. Alfred A . Hunter 3. Francois Vaillancourt 4. Abdul Rashid 5. Gail Oja B. New Evidence 1. New Trend in Canadian Income 2. Canadian Welfare State 3. Income Disparitj' 4. The Family Home 5. Stock Ownership 6. Automobiles 7. Other Household Belongings  41 43 44 49 58 64 70 77 78 81 87 93 96 98 101  IV. CONCLUSION  108  BIBLIOGRAPHY  113  iii  LIST OF TABLES Table  Table  Table Table  Table  2.1 E x p e n d i t u r e s on B a s i c N e c e s s i t i e s a s a P e r c e n t a g e o f Net F a m i l y Income T e n t h , 1973-1974, U n i t e d S t a t e s  26  2.2 C l a s s D i v e r g e n c e i n Home B u y i n g : From Mass M a r k e t t o L u x u r y M a r k e t i n 10 y e a r s , United States •  28  2.3 C l a s s D i v e r g e n c e : 1975 D o m e s t i c Auto S a l e s as a P e r c e n t a g e o f 1974 S a l e s , U n i t e d S t a t e s  29  2.4 Long-Term T r e n d s i n D i s t r i b u t i o n o f P r i v a t e P r o p e r t y , 1911-60 and 1961-1971, U n i t e d Kingdom  32  2.5 C o n c e n t r a t i o n Property,  o f Main Types of P r i v a t e  1954, U n i t e d  Kingdom  34  Table  3.1 E s t i m a t e d  Table Table  3.2 Income S h a r e s o f C a n a d i a n s , 1951-1978 : 3.3 I n t e r n a t i o n a l Income I n e q u a l i t y  46 48  Table  3.4 C u m u l a t i v e D i s t r i b u t i o n o f W e a l t h o f F a m i l i e s and U n a t t a c h e d I n d i v i d u a l s , 1970 and 1977  50  3.5 E s t i m a t e s o f t h e D i s t r i b u t i o n o f W e a l t h i n Canada, t h e U.K. and t h e U.S.A.  51  3.6 E a r n i n g s o f Men and Women i n Canada i n C u r r e n t and C o n s t a n t (1981) D o l l a r s , S e l e c t e d Y e a r s  53  3.7 Home-Value o f F a m i l i e s and U n a t t a c h e d I n d i v i d u a l s by Income Groups I n C u r r e n t D o l l a r s , 1977  55  Table Table Table  Table Table  W e a l t h P e r C a n a d i a n A d u l t , 1980  3.8 P e r c e n t a g e o f I n d i v i d u a l Income Q u i n t I l e  Dividend  45  (1977)  Income by 57  3.9 P e r C a p i t a Income o f C a n a d i a n s , C u r r e n t and C o n s t a n t D o l l a r s  1951-81, 59  Table  3.10 Income I n e q u a l i t y i n Canada, 1951-81, Money Income, Q u i n t i l e S h a r e s and G i n i C o e f f i c i e n t s -- 61  Table  3.11 G i n i C o e f f i c i e n t , P r e - t a x F a m i l i e s , OECD C o u n t r i e s  iv  Income, f o r Economic 62  Table  3.12 G i n i C o e f f i c i e n t , P r e - t a x I n c o m e , f o r F a m i l i e s and I n d i v i d u a l s , Canada, U . K . and U . S . A 63  Table  3.13 S e l e c t e d F i n a n c i a l C h a r a c t e r i s t i c s o f i n c o m e E c o n o m i c F a m i l i e s , S p r i n g 1977  High 65  Table  3.14 i n c i d e n c e o f , a n d A v e r a g e I n c o m e f r o m , V a r i o u s S o u r c e s o f Income and C o m p o s i t i o n o f T o t a l I n c o m e , C e n s u s F a m i l i e s , 1980 67  Table  3.15 D w e l l i n g  Characteristic  1980 Table  Table  of Census  Families,  :  69  3.16 P e r c e n t a g e C o m p o s i t i o n o f W e a l t h o f a n d I n d i v i d u a l s , 1970, 1977, a n d 1984 3.17  Distribution  of Wealth  Families 71 1970,  of A l l U n i t s ,  1977, 1984 Table Table  72  3.18 P e r c e n t a g e C o m p o s i t i o n o f W e a l t h and U n a t t a c h e d I n d i v i d u a l s 3.19  Distribution  of Wealth  Components  of  Families •  by Wealth  1970, 1977, a n d 1984  Quintiles,  76  Table  3.20 A v e r a g e  Table  3.21  Shares  of Total  Table  3.22  Average  Income  Table  3.23  Shares  Table  3.24  Average  Distribution  Before  Table  T r a n s f e r P a y m e n t s f o r A l l U n i t s , 1981-85 3.25 G i n i C o e f f i c i e n t C a l c u l a t e d o n D i f f e r e n t Concepts for A l l U n i t s  Income  Table  3.26 A v e r a g e Dentists,  1951-84  Table Table  Income  of  for A l l Units, Income After  Income  Income  1980-85  by Q u i n t i l e s ,  79 1980-85 - 80 82  Tax f o r A l l U n i t s  After  83  Tax by Q u i n t i l e s  and Q u i n t i l e  85 86  Income o f S e l f - E m p l o y e d D o c t o r s , L a w y e r s , and A l l Taxpayers i n Canada,  3.27 A v e r a g e I n d i v i d u a l Wages & S a l a r i e s CEO S a l a r i e s o f C a n a d a , 1980-86  and  88  Average  3.28 F e d e r a l M i n i m u m Wage R a t e s f o r E x p e r i e n c e d A d u l t W o r k e r s a n d Y o u n g W o r k e r s , 1975-86  v,  74  90 92  Table Table  3.29 The V a l u e o f D w e l l i n g 1978 and 1982  by Q u i n t i l e s , • :  3.30 P e r c e n t a g e o f I n d i v i d u a l D i v i d e n d Income Group i n Canada, 1980-84  •  95  Income by 97  Table  3.31 N e w - R e g i s t e r e d U.S. L u x u r y and N o n - L u x u r y C a r s In Canada, 1983-84 99  Table  3.32 N e w - R e g i s t e r e d 1980-84  Table Table Table  Table  Imported  Luxury Cars  In Canada, 100  3.33 O w n e r s h i p o f A u t o m a t i c D i s h w a s h e r s H o u s e h o l d , 1980-84 3.34 O w n e r s h i p o f A i r - C o n d i t i o n e r s i n C a n a d i a n H o u s e h o l d , 1980-84  i n Canadian  (central  102 unit) 103  3.35 O w n e r s h i p o f Micro-Wave Ovens i n C a n a d i a n H o u s e h o l d , 1982-84  104  3.36 A v e r a g e Income and E x p e r i e n c e f o r A l l U n i t s , by Income Q u i n t i l e , 1969, 1978, and 1982  106  vi  ACKNOWLEDGEMENT  I make  am  deeply  this thesis  indebted  to  the  following  instructors  possible. First of all, I would  who have  like to thank  helped  me  Dr. Guppy who  have provided me with helpful advices and thoughtful suggestions at every stage of my thesis. I also want and warm encouragement.  to appreciate  D r . Chang for his insightful criticisms  Gratitude must also be expressed to Dr. Johnson who  kindly agreed to act as my supervisor and has supported me in many ways.  vii  I. INTRODUCTION  Equality of  a l l eras.  been and  a  h a s been  The  ideal  for m a n y  powerful and of a  rather  than  accurate  and morally  of the Golden  live  Ages,  of social thinkers, By  and  large,  right. E q u a l i t y  to the criteria  has often  about of how  the origins,  arguments  on  inequality  is a but  been  used  equally  from  equality  Plato has  thus  fairness,  to judge  has  the Utopias,  has been  of equity,  natural  on, been  a  very  a n d justice,  the m o r a l  a n d imposed  eliminated  through  overriding  a n d inevitable  social  alternate  arrangement,  social change. A l t h o u g h  it is obvious  concern  An  feature  that  social  of intellectuals.  1  be,  whereas  thinkers  a n d possible one  not i n deeds.  is to say, equality  should  is. Social  varied  only,  That  society  society  abolished.  unnatural  varied,  how  have  i n words  the reality.  meanings,  inequality  never  is realized  h a s been  value  description  finding  reduced  however,  equality,  deeply-held  been  Most  a l l people  people  authority  society.  Equality,  to  equality  intellectuals a n d ordinary  i n which  of equality.  connected  effort to achieve  world  i n the imagination  desirable  ideal, closely  for both  thinkers.  the principle  intrinsically  issue  of a  social  created  emphasized  considered  a  construction  the P a r a d i s e s  have  a major  have  remedies  from  inequality  devoted  One  is a n  much  position  o f society, something  an  is for m a n y  effort  of social inequality. T h e  another.  position  Inequality,  is that  injustice t h a t  scholars'  opinions  inequality  has  that  about a  that  might be  inequality can and  been  is  is a n  should  be  inequality  have  tenacious  and  INTRODUCTION / 2 Few  areas  of  sociology  are  as  contentious  inequality. Sociologists have tried to understand inequality  as  a  ubiquitous  sociology  as  founders  of American  essential  ingredient  constantly  a  feature  distinctive  asked  of the  social world  considered  understanding  such questions  the  as,  works  of  questions  element  of social life?".  authors  who  first  study  the  since the  of  of social  beginnings of  study  the  of inequality as  an  Sociologists have  "why does inequality exist?", "what  The  social  sociologists, including  workings of society.  it?", and "can it be eliminated altogether?", necessary  the  causes and effects  discipline. Moreover, many  sociology, have  for  the  as  causes  or "do we have to accept it as  very beginning of sociology lies in  attempted  to  give  sociological  answers  to  a the  these  ~ in particular, the French philosophes, the Scottish moral philosophers  and political economists,  and  the  thinkers  of the  German enlightenment  in  the  second half of the eighteenth century (Dahrendorf, 1972:92-3).  On structured  the  whole, sociologists have  differences  between  people  tried to find that  are  the  answers  built into  by examining  patterns  social interactions, because social inequality, to sociologists, refers social  dissimilarities that  sociologists  have  focused  1984).  Most  social  arrangements  characteristics structured affects  are upon  socially  sociologists believe rather  that  than  of individuals; they  inequality. In fact,  every  consequential  aspect  of the  they  for  structured  inequality seeing  focus  people's  not  it  is as  upon  social  inequality  random  hold that structured  recurrent  to any of the lives.  (see  primarily a inherent  of  That  e.g.,  is,  Grabb,  consequence  in  the  common  inequality but  inequality  of  upon  (stratification)  life of every individual and household today.  Social  inequality occupies the crucial place in the organization of society. It is believed  INTRODUCTION / 3 that the study of social inequality is one of the  most fascinating and  important  areas of sociology.  Most entirely  societies  on  today  economic  have  a  relationships.  pattern The  of  social  formation  structure  of  inequality  based  almost  in  society  a  depends largely upon the distribution of economic resources of the society. Wealth involves  all  kinds  of  results  from  all economic  sources:  earnings,  inheritance,  welfare, etc., rather than income only. Wealth is defined as the total amount of accumulated benefit  of  assets the  including anything  owner  savings, investments, a  person's  (for  example,  has  socio-economic  distributed, valuable  been the  to  about society  a  be  owner's  position, regardless  central  less  turned home,  the as  matter  distribution of wealth  distribution  well as  of class  or  into  the  to  sociology.  exists  The  status.  of wealth  since  it  tells  us  inequality  macroscopic  approach  is  by  summarized  a  extent of social inequality. In  existing distribution of wealth  changing  At  equally  is especially significant in capitalist society  for  business,  the  same  means in  wealth  in a given society. Therefore  but  also  of a  Figure  is  it is  great  deal  addition,  the  where  private  social ranking.  I will not only  analyze its changing  (toward more equal, inequal or stable distribution). In the account  the  and valid indicator of  I will deal with the distribution of wealth in this thesis. the  for  automobile,  more  ownership of wealth is the prevailing vehicle to determine  describe  cash  is the most believable key to social inequality  social inequality  research itself  the  can  etc.). Hence, wealth is an important  time, its distribution, of necessity, which  that  trend  1960s, Lenski tried to  socio-historical perspective. 1.1. According  to  His  him, social  INTRODUCTION / 4 Figure  1.1 Degree of Social Inequality by Type of Society  Maximal  Degree of social inequality  Minimal  Hunting and gathering S o u r c e : Lenski, inequality the  had  tended  to  tendency and  increase keeps  advanced  designates the  apex of the  small  of  number  Advanced horticultural  Agrarian  Industrial  1966.  increasing  horticultural,  Simple horticultural  since primitive times. going  through  horticultural  hunting  societies.  curve. In agrarian  individuals with  power,  As Figure and  such  as  gathering,  Agrarian  society, as the  a  king  1.1 shows, simple  society,  matter and  then,  of fact, the  a  nobility,  enjoyed immense luxury, consuming in a single day goods and services sufficient to support a  large numbers  considerable  necessities  of  portion life  and  of the common people for a year. A t the same time, of was  the  population,  marked  out  like by  the  serfs, > was social  denied  system  for  the a  basic speedy  demise. Extreme inequalities of wealth existed in that social system (c.f., Lenski, 1966:210-219, 295).  The trend  of increasing social inequality, however, was  reversed  with  the  INTRODUCTION / 5 rise  of  advanced  improvements  industrial  in technology,  societies. the  spread  Lenski  believed  of democratic  public property, public ownership, and public enterprise redistribute  both privilege and  power to more  that  ideas,  the  and  significant  the  growth of  would make it possible to  and more  citizens in the  modern  era (Lenski, 1966:308-317, 338-345, 428-430).  While Lenski took into account  all types of societies and their historically  changing social inequalities, my thesis is focused upon only one industrial society (that of Canada)  and  the  distribution of wealth in the  that society. While influenced by Lenski's approach,  last  two decades within  this thesis  concerns  a much  more recent period and deals with a much more limited area. In short, the aim of the thesis is to investigate the distribution of wealth in Canada  today.  In order to investigate the distribution of wealth, I will begin, in the chapter,  to examine  a  variety  of theoretical  explanations  on the  next  distribution of  wealth. Initially, I will review the classical works of M a r x , Durkheim, and Weber as the three Founding ensue from  their  Fathers  theoretical  of modern sociology to see what predictions might  orientations  as  to what  would happen  to emergent  capitalist society: more equal or less equal distribution of wealth. Following that, I  will  deal with more  Westergaard  contemporary  and Resler, Porter,  theorists  focusing particularly on Blumberg,  and Clement. Through an examination of these  theoretical accounts, I intend to emphasize  their ideas  about how the distribution  of wealth will change in contemporary industrialized society.  After  the review of theoretical accounts  on the wealth distribution both in  INTRODUCTION / 6 capitalist and industrialized societies, I will turn Canada.  For  employ  a  the  purpose  variety  of understanding  of empirical evidence  to the distribution of wealth in  Canadian wealth  in Chapter  distribution, I  III. First, I will  show  will the  data that already exists in the current social science literature. The data include the  findings of Osberg, Hunter,  offer  us  important  contemporary  empirical evidence  Canada.  evidence of the  Vaillancourt, Rashid, and  I  will  then  existing pattern  Both currently published and  to  identify  present  the  more  can be  data  will  distribution of wealth in  data  and changing trend  new data  Oja. These  as  of the  new  and  different  wealth distribution.  used to compare  the  theoretical  accounts of the distribution of wealth.  The between chapter  the will  distribution brings  thesis  forth  generates.  will  finally  theoretical attempt  of wealth the  to  conclude  accounts show  and  which  in contemporary  wealth  with the  an  examination  empirical  perspectives Canada,  distribution of today's  evidence.  are  and  plausible  thereby  Canada  and  of  the  The to  will what  linkage  concluding explain  examine it,  in  the what turn,  II. THEORETICAL ACCOUNTS OF THE DISTRIBUTION OF WEALTH  The focal chapter,  I  approach  contemporary accounts the  point of this the  theoretical  thesis  lies in the  focal  point  accounts.  I  of classical social thinkers  by  briefly  start  with  who were  newly emerging capitalist society of the  some  theoretical  views  on  the  distribution of wealth. In  wealth  reviewing a  both  discussion  interested  nineteenth  classical  of the  this and  theoretical  in wealth inequality in century.  distribution  in  Then, I  today's  discuss advanced  industrialized societies such as American, British, and Canadian societies.  A. CLASSICAL  ACCOUNTS  CAPITALIST  OF THE DISTRIBUTION  OF WEALTH  SOCIETY  In this section, I will review the theoretical accounts and  Weber.  IN  They not only occupy the  three Founding Fathers,  central  positions  of Marx, Durkheim,  in modern  sociology as  but  also focus mostly upon social inequality and wealth  distribution in the nineteenth  century. They were among the first social scientists  interested  in  wealth  inequality  as  a  key  aspect  of  social  inequality,  when  confronted with the emerging capitalism of the century. I present their viewpoints of  the  newly  emergent  class  structure  of  capitalism,  new  forms  inequality, recipes for its alleviation, and the distribution of wealth.  7  of  social  THEORETICAL  ACCOUNTS  OF  THE  DISTRIBUTION  OF  WEALTH  /  8  1. Karl Marx  Marx, sociology  the  the  inequality  concept  of  through  the  inequality,  social of  all past  of  him,  whatever  earliest  societies where  are  ownership  distinct  production  -  capitalism.  In  actual  fact,  relations is  they  society. economic feudalism general  is,  classes or or  classes  between  the  predominant  class  the  to  of  the  the  lies means  of  the  the  class  of social  the  of  most in  production  but  classes  means  and  of  capital  in  propertyless.  In  Always  class  (the  sharpened  history  mode  of  class  minority)  and and  In  in  are  such  as  production,  Sanders,  conflict.  capitalists  occurred, major  class.  of production,  and  the  is alienated.  the  the  Social  for  of  the  owning  conflicts  modes  (Fried  between  and  ~  subordinate  (except  two  of  social  capitalist  and  in feudalism,  propertied  becomes  era,  the  future.  ownership  development  advanced  conflict  the  majority)  the  property  historical  conflictual;  and  society  private  forefront  explain  predict  each  to  the  dominant  times, land  the  specific  more  culmination tension  that  nor  respect  classes  argues  to  in  every  class (the  the  The  are  to  pre-capitalist  basis,  value  denote  spurs  both  exist  ancient  classes  working  universal  owners  and  corresponding  presupposes  represent  two  capitalism.  called,  with  bringing  inequality, and  prevailed). In other  Marx  this  surplus  property  the  conflict  That  land  sense, two  exploitative and  on  for  1984:13), strives to  societies -  be  neither  in tribal  the  Grabb,  and  might  slaves  private  responsible  class-based  each  a  (c.f.,  class,  from  between  The  of  most  present  means  classes,  common  class  and  concept  for  thinker  1964).  capitalist  wage  conflicts  of  slavery  or  the  more  Capitalism society,  laborers.  employers  capitalist  the  Capitalists  of wage  labor.  THEORETICAL ACCOUNTS OF T H E DISTRIBUTION OF W E A L T H / 9 They  own  the  factories  and  machines  primary means of production. On the propertyless  which increasingly other  hand, wage  replace  laborers  land  are  as  a class of  workers who have no means of production of their own, are  to selling their labor-power  to the  owners  of capital in order  could enjoy  most  of the  economic wealth  and  reduced  to survive. Thus,  the class relations in capitalism is those between the powerful and the The former  the  powerless.  political power while  the latter is forced to toil only to survive.  Although system  of  conceding  economic  that  capitalism  organization  in  is  the  most  generating  successful  wealth,  Marx  and  efficient  points  out  its  internal contradictions concerning the  wealth distribution. The growth of industry  in  and  capitalist  society promises  wealth  abundance for  wealth, for him, is monopolized by one class, while the are  made  dominant the  poorer,  not  richer,  by  the  advances  class possess a disproportionately  unfairly comfortable  position of the  all, but  the  new-found  mass of working people  in production.  Members  share of the  wealth.  large  capitalist vis a  vis the  of  the  A s well,  worker in  the  market helps that asymmetrical distribution of wealth.  To be more the  value of the  noted.  In  capitalists  labor and  Marx's as  a  specific,  view, profit,  first,  resources,  surplus then  surplus  and  value,  becomes  value, which is the the  value  ironically the  of the  enough,  source  of  the  difference product,  between must  be  goes  to  the  accumulation  of  the  always  capitalists' wealth, though the workers are primarily responsible for generating through bigger  their profit  labor. In at  the  addition, for  expense of the  Marx, laborers.  the  capitalists  tirelessly  Labor-power has  try  a value  to  it get  like all  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 10 marketable by  the  amount  Marx, have can  commodities  1967).  in the  capitalist economy,  of socially necessary This  amount  of labor  and  labor  time  time  represents  this  needed  for  how  to pay the workers. However, according to Marx, require  lengthening  the the  workers  to  working  labor  day,  longer  reducing  than  its  the  determined  production  much  socially  wages,  value is  the  (c.f.,  capitalists  capitalists in power necessary  speeding  up  the  — through process  of  production, rationalizing the social organization of work, and introducing new and more efficient machinery (Marx, the  bourgeoisie's  wealth  1967). Accordingly, surplus value as a source of  increases.  A t the  same time,  the  workers  who put  in  surplus labor time are exploited. Surplus value, Marx argues, brings a profit to the capitalists and exploitation to the  proletariat.  The division of labor plays an important role in the distribution of wealth. As  capitalism  evolves  and  develops,  the  simple  division  owner and the worker becomes more and more elaborate. more quickly and cheaply if all the  tasks are  of labor  efficiency  only benefits  wages in spite  the  of their  increase  the  profits  of  workers,  but  it  has  That  is, the  also  workers  few  divided into special jobs, each of (Grabb,  1984:24). A  highly efficient production possible. However, this capitalists  because  workers  are  greater production. Not only does the the  the  Goods can be produced  which is done by a particular worker on a continual basis detailed division of labor makes  between  capitalist,  negative  lose enjoyable  and  effects and  thus  on the  the  rate  worker's  meaningful  quality  paid the  same  division of labor of  exploitation  orientation of labor,  of  to work. for  they  work for quite simple, partial and meaningless chores routinely and repetitively -in that situation, the workers become alienated from their own labor. The minute  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 11 division  of labor  creates  a  become  easily  market,  then their market power against the capitalists weakens. The division of  set  makes  of  the  unskilled  replaceable  jobs  of individual  laborers by  as  large  labor in capitalist society increases  well.  numbers  the  workers As  a  of  easy  and  simple,  consequence,  potential  the  workers  competitors  power and wealth of the  and  in  the  capitalist, and  thus results in the more uneven wealth distribution.  In surplus  addition, the  value. The  capitalists  use  introduce  of increasingly sophisticated  the requiring skills or physical strength more substitutable  machines  not  to  augment  only dilutes  of jobs and thereby makes workers even  -- even children and women supersede men by low wages --  Braverman,  1974)  and  thus  makes  capitalists  attenuated. A s workers' skills are  and more  replaceable,  their power  in the  argues  that  capitalism  itself  army of labor (see  workers'  bargaining  levelled and  market  power of the worker helps wealth become more  Marx  workshops  machinery  but it also swells the ranks of the industrial reserve 1967;  to  is  as  erodes.  they  Marx,  power  with  become  more  The weakened  market  concentrated.  such  an  internally  contradictory  system of production that it cannot operate in a stable fashion and is prone recurrent  cycles  of  boom  and  conditions  of overproduction  bust.  resulting  Depression from  the  or  crisis  takes  competition among  accumulating wealth. Overproduction is typically followed by higher reduced demand, depression save  and slow economic growth (Marx,  by the  money.  After  capitalist is to lay-off each  crisis,  there  workers  comes  a  place  to  under  capitalists  in  unemployment,  1975). A common reaction to in order period  in  to reduce which  the  costs  and  economy  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 12 stabilizes and the Nevertheless, differences  proletariat may once again  workers  between  are  hurt  themselves  by  and  periods the  find of  owners  work -  boom (Marx,  crisis  and  thereby  become  ever  more  1975).  the  basic  apparent.  In  short, the recurrent economic cycles of capitalism makes it easy for the capitalist to accumulate wealth.  As  capitalism  goes  through  its  periodic  slumps,  Marx  accumulation and the centralization of wealth takes place because  predicts,  the  the larger and  wealthier capitalists become better able to consume or bankrupt the smaller and the poorer of their kind. This kind of concentration of capital goes together  with  the merging of already formed capitals (Hardach et al. 1978:38). That is, small capitalists increasingly are forced to sell their businesses or else go bankrupt and are taken over by larger ones. For instance, the decline of the petty bourgeoisie in economic crises means hands  of  Communist  an  ever  a concentration and centralization of ownership in the  smaller  pool  of  large-scale  capitalists.  In  Manifesto  of  the  Party, Marx describes:  The lower strata of middle class the small tradespeople, shopkeepers, and retired tradesmen generally, the handicraftsmen and peasants -- all these sink gradually into the proletariat, partly because their diminutive capital does not suffice for the scale on which Modern Industry is carried on, and is swamped in the competition with the large capitalists, partly because their specialized skill is rendered worthless by new methods of production. Thus the proletariat is recruited from all classes of population (Marx and Engels, 1977:43-44).  Therefore,  Marx  bourgeoisie  and  asserts that class polarization, the widening separation proletariat,  emerges  in  capitalist  society.  His concept  polarization truely reflects the widening gap of wealth holding.  between of  class  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 13 It seems that Marx essentially believes the rich get richer and the get  poorer  in capitalist  expropriated (the  by  the  bourgeoisie  in  non-holders  society,  capitalists, Marx's  (the proletariat)  not but  term)  only because the also because the becomes  situation and  value of  more  become increasingly disadvantaged.  of wealth in capitalist society is aggravated overthrow the  more  surplus  is  poor  always  wealth-holders  powerful  while  The maldistribution  over time. Meanwhile, the  power to  system builds with the working class, and the capitalist society is  replaced by a socialist society, transcending the contradictions of capitalism. It is within the very capitalist society that its demise is generated. Change, for Marx, is a necessary wealth  historical process of dialectical development.  distribution  inequality. opposition  Its  in  solution  between  the  capitalist cannot  society be  is  found  in  the  within  accumulation of wealth and  pushes towards the overthrow of the  According to him, the  direction  of  the  extreme  the  capitalist  system.  The  the  accumulation of poverty  system:  The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with and under it. Centralization of the means of production and socialization of labor at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated (Marx, 1967:929).  2. Emile Durkheim  Durkheim's (especially Therefore to  be  the  focus  modern  is  on  capitalist  the  cohesiveness  society)  rather  his capitalist society is an integrated  distributed  fairly.  His  strong  interest  or than  solidarity on  of  society  or  struggle.  one in which wealth is  supposed  in integration  conflict  a  as  such  makes  his  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 14 theory the prototype of contemporary  Structural Functionalism (e.g., Grabb,  He  does not  unconditionally believe, however,  He  thinks  morality, a  a  set  of rules  the  of norms  1984).  solidarity of capitalist society. guiding and  governing  human  conduct is essential to the social solidarity. The morality of capitalist society, for him,  is very different from that of predecessors.  modern and  capitalist  religious  mainly  from  society  morality the  is more  in  which  individualized and  primitive  expanding  That is to say, the morality of  society  division  of labor.  Giddens,  1972:1-9).  According  derives  Durkheim,  modern  Therefore  the wealth in capitalist soceity also must be fairly distributed.  Durkheim capitalist  seems  society  interdependence  to  under  in the  portray organic  too  in  labor  integration  positively  solidarity  brought  division of labor. But it must  is  guided  rather  the  rigid  It  and  is  of  to  the  morality,  society  division  to  society  the  the  compared  capitalist  hence,  experienced  (see  free  than  image about  in  of by  be noted  by  conflict.  the a  new  modern functional  that he divides  the division of labor into three kinds: normal, anomic, and forced. For him, the normal division of labor is moral and just, where each individual person's special aptitudes and natural of  modern  normal  society  is possible  division  of  ones,  result  abnormal  talents are  labor.  allowed to develop. Therefore  only on condition that  The  anomic  and  forced  the  his positive view  society  divisions  of  is  under  labor,  the being  from insufficient morality and justice respectively. Namely  only the normal division of labor guarantee his positive view of modern capitalist society.  The  anomic  state,  for  him, represents  a  situation  where  the  traditional  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 15 moral forms have been dissolved but have prescriptions. economic  Hence, the  funtions  anomic division  has  temporarily  not yet been replaced by new moral  of labor happens when  outstripped  the  the  division of  of  appropriate  development  moral regulation. It is reflected both in the occurrence of industrial crises and in class conflict (c.f., Giddens, 1972:10). That is to say, under of  labor,  mutual  contributions  and  obligations  between  denied or overlooked and a lawless, unconstrained groups  normlessly search only for their interests.  between  the  two classes  as  the  owners  struggle  anomic division  and  workers  are  ensues, because both  Thus, a sharper line is drawn  Marx's class polarization means. In such a society,  wealth inequality between the two groups is marked.  On  the  other  hand,  the  forced  division  of  labor  occurs  when  social  relations are determined by the imposition of coercive power. Therefore, under forced  division  implementing society  and  of  labor,  rules  people  that  that contains  terms,  transmission  -  act  out  protect that  of  their  are  self-interest favored  unsuitable  or  egoism,  positions and  unfair  in  a  given  There exists only an imperfect and troubled solidarity kind  of division  of property  — inequalities from outside  status, etc.  and  others in roles  1964:376). This  hereditary  power  monopolize  their abilities and interests. (Durkheim,  in  the  are eradicated.  is ended, forces  of labor  can  be  abolished  if  the  i.e., if external inequalities, in his  such as  inheritance  of wealth,  ascribed  The existence of external inequalities exactly  mean  the source of the unequal wealth distribution.  Durkheim with the  further  thinks  that external  development  of the  inequalities can  and  will become dissolved  division of labor, while internal  inequalities  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 16 of  capacity  and  aptitude  are  ineradicable.  contains anomic or forced elements,  As  long  as  the  division  of  labor  external inequalities cannot be eliminated. He  believes, however, finally, the normal division of labor is accomplished in modern society, and also believes, the transitional inequality which  as  well  deviant.  of opportunity  accompanies  External  as  inequality,  Thus,  ('external  the in  anomic and the  growth fact,  he  argues,  inequality')  of  has  the  forced divisions of labor are  is  division  gradually  been  the  progressive  a  definite  of  labor  obliterated  labor and its need for special individual talents in modern because capitalism  special make  faculties  required  for  it increasingly difficult  filling to  important  obtain  inherited class privilege (Durkheim, 1964:312).  decline  historical (Giddens, by  tendency  division of  society. It  these positions  of  1971:81).  the  positions  just  is partly  in  modern  solely  through  That is, he strongly believes  that  in primitive society, where solidarity is based primarily upon community of belief and sentiment,  there is neither  the  means nor the  opportunity. B y the individualizing effects faculties  which  actualization,  previously  and  thus  remained  create  a  need for the  equalization of  of the division of labor, specific human latent,  become  increasingly  pressure  towards  individual  capable  of  self-fulfilment  (Giddens, 1971:81): We may thus say that the division of labor produces solidarity only if it is spontaneous and to the degree that it is spontaneous. But by spontaneity we must understand not simply the absence of express and overt violence, but of anything that might, even indirectly, shackle the free employment of the social force that each person carries in himself. This not only suppose that individuals are not relegated to particular functions by force, but also that no sort of obstacle whatsoever presents the from occupying in the social framework the position which records with their capacities (Durkheim, 1967:377).  In addition, he expects that the state and occupational groups as moral agencies,  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H I 11 contribute  to the  construction of the  Durkheim,  modern  guaranteed  equal  capitalist  society of equal opportunity.  society  opportunity.  Thus,  should wealth  be  equal  and  could become  In short, for  fair  the  because  of  criterion of one's  capacity in capitalist society.  In force  modern capitalist society, inequality should not arise  such  as  differences where  ascribed  and  inherited  wealth  but  instead  any  outside  should  reflect  in individual merit. For Durkheim, it is in a modern capitalist society  external  realized  status  from  ~  inequality  and  politically just  only  and  would  internal  be  inequality  economically fair.  opportunity positively affects  eliminated  --  would  This fair  equal  opportunity  would  be  Thus  society  is  remain. starting  the  line provided by  equal  the wealth distribution. That is, equal opportunity in  accumulating wealth should contribute considerably to equal distribution of wealth. Moreover  the  difference  of  remaining capacity.  difference Therefore,  of  wealth  holding  Durkheim's  thoughts  must on  be  the  due  to  distribution  the of  wealth in modern capitalist society, in contrast to Marx's, might be optimistic.  3. Max Weber  Weber's alternative  thoughts  a  inequality  are  usually  regarded  to, and a positive critique of M a r x ' s (e.g., Grabb,  he makes a number has  on  more  as  a  distinct  1984:67). In  fact,  of modifications to the Marxist view. Thus, his explanation  complex,  pluralistic nature.  tendency  of economic determinism  structure  is economic)  For  example,  (i.e., that the  in Marxism,  and  replaces  he  strongly  denies  the  real and unique basis of social it  with a  pluralistic view in  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 18 which  the  non-economic  sphere  (politics,  economic sphere is taken into account. society depends upon the  concept  religion,  of power  rather  struggle  to  for power  obtain  and  is inherent  exert  one's  status  honor  and  1968). The three major  influences  than just  for numerous  power.  in social  only through one's control of market  as  well  that  for  extent  staking  In  contests among social  other  words,  action; one's power  the  contest  is determined,  of one's  economic styles  goods  of life  power and  and  to  deriving from  in  material the  services.  are  are  and  economic Status  delineated  party  association  (see  symbolic rewards. order.  groups  within  power  in  the  unions, professional political  order.  It  are  the  groups  Therefore  it  members  of dominant classes, status groups  to have  power  have  power  (domination)  hold  larger  not  concerns the  social  the  groups order.  Each of  a  different  Class denotes  the  distribution  sharing  of  distinctive  A n d parties,  such as political  which parties,  and  the  like,  relate to one's social  can  be  said  that  and parties  those  also.  These  who  are  are able, on the whole,  over the remaining population. No doubt,  shares of wealth  Weber,  class, status, and party.  consist of systematically organized voluntary associations pressure groups,  or  capacity discussed above, but also, through  bases for power  claims  the  of class. For  these represents a distinct aspect of power insofar as each constitutes basis  as  the distribution of wealth.  Weber thinks of society as an arena attempting  etc)  His explanation of inequality in capitalist  Weber, the distribution of power determines  actors  law,  those who  three bases overlap  one  another in some cases, but not in others.  Weber  sees  the  historical  development  of  societies  as  a  steady  trend  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 19 toward  a predominance of both rationalized social actions  structures.  Capitalist  society,  according  to  rationality. He also thinks that the tendency system its  of formal organization known as  impersonality, hierarchy  him,  is  and  rationalized social  advanced  in  terms  of  to rationalization culminates in the  bureaucracy,  of rational-legal authority,  which  is characterized by  written  system  of rules,  clear division of labor, and career systems. Bureaucracy is a system of laws not of men, so that, it is technically more perfect than other methods of organization and is the most efficient. For him, bureaucracy and capitalism are characteristics of the contemporary modern society.  In modern societies, power struggles gradually happen within with  their  bureaucracy  formal has  structure  become  a  of regular key  arena  patterned in the  domination. That  power  struggle.  In  bureaucracies is the  to  say,  light of  Weber's account, bureaucracy is generally looked upon as an immense source of power, potential or actual (c.f., Parkin,  1982). Accordingly, bureaucracy must be  an important variable of the wealth distribution in modern capitalist society. To wit,  those who occupy the higher positions of bureaucracy could own, accumulate  and keep wealth easily. It provides the means by which social action is governed on  a  regular  basis,  through  which  a  system  of inequality  is established  sustained. Bureaucracy, on the one hand, is the only organizational form of keeping modern complex societies operating, but on the to  human  freedom  or  equality. According  to  Weber, it  other, was  a  and  capable  it is a threat necessary  evil:  necessary because it is the only practical means for organizing human conduct in the  present day, yet evil because it is an iron cage, that restricts  and threatens democracy (cf., Weber, 1958:181-183).  individualism  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 20 Weber  appears  worried by  the  threat  posed by  bureaucratic  officials  whom the means of administration seem to be increasingly concentrated bureaucracies supposed  as  to  act  well  as  without  irrespective of differences not  always  behave  understandable push  their  have  a  prejudice  organizations.  or  passion,  Although  applying the  the same  in state  officials rules  are  to all  in social rank or condition, the trouble is that they do  in  human  economical  by  the  way  tendency  own private  are  supposed  to.  They  have  to try and accrue power for themselves,  interests  telling advantage  they  (Parkin, 1982:88).  over others in that  they  Moreover, for hold  an  and to  Weber,  they  close control over  the  means of information. That is, secrecy and monopoly of the files are their strong weapon  for  economic  power.  and  Bureaucratic  all other  possess advantageous  spheres.  officials They  low levels  not  extending  their  only hold  power  wealth  to  already  political, but  also  conditions to make it.  Bureaucracy, for Weber, forms the  are  in bureaucratic  such a steel-hard  organizations  cage that individuals at  inevitably lose  the  control of  the  work they do, which is determined by those in the higher echelons (Giddens and Held,  1982:11). That iron cage makes inequality an inherent feature of capitalist  society.  Accordingly,  alienation pessimistic  and  for  him,  impersonality but  about  the  prospects  future see for  society the  the  would  not  enhancement wealth  see  of them.  the  removal  Weber  distribution of modern  of  remains capitalist  society. Furthermore, unlike M a r x , he never has any hope about socialist society. Because his pessimism results from bureaucracy, intensified  bureaucratic  Weber's thoughts  organization  on the  can  not  distribution of wealth  socialist society which has  alter  any  situation.  in capitalist society  more  According seem  to  to be  THEORETICAL ACCOUNTS OF T H E DISTRIBUTION OF WEALTH / 21 very  unfair.  It  is  because  in  capitalist  established in bureaucratic organizations, including economic officials. the  resources) is  society,  social  and that power  concentrated  in the  inequality (as  hands  is  firmly  a general concept of few  bureaucratic  That is the small number of bureaucrats would control most wealth of  society while  the remaining population would be forced to obey within the  bureaucratic  iron  generates  number  a  cage: of  unfairly  hierarchical  healthy  and  structure.  wealthy  salaried  Although middle  bureaucracy  class  who  he  believes, exist and continue to expand in modern society, they have very weak power. The ultimate cause of this is that they lack the means of administration. If they have the means of administration, they are not middle class any more; they would be the members of the upper class. After all, the expanded middle class does not  seem to affect  the  wealth distribution. Even if bureaucracy  is  believed to be an inevitable organization in rationalized capitalist society, it is by its  very nature,  occupy  the  hierarchical rather than equal or democratic.  higher  advantages in both bring extremely  position  in  that  hierarchial  political and economic  unequal  wealth distribution  ladder  could  spheres. In sum, as  well  as  Thus, those who have  enormous  bureaucracy would  considerabley  restrained  individual freedom to the modern capitalist society. For Weber, it is due mainly to the higher bureaucrat's holding a disproportiontely large share of wealth and power. Bureaucratization in capitalist society implies that political organization as well as economic arrangement is controlled by only a few of the powerful.  In its modern guise, bureaucracy can be seen in the form of corporations. Private corporations, with massive bureaucracies,  have become central features of  capitalist society. Although Weber does not address the issue, it is the ownership  THEORETICAL of  these new  As  I will  bureaucratic  present in the  contemporary  In  ACCOUNTS forms next  O F T H E D I S T R I B U T I O N O F W E A L T H / 22 which is important  to the  wealth distribution.  section, these new bureaucratic  elites'  control of  industrialized society is discussed by Porter and Clement.  this  section, I have  discussed  classical accounts  on the  distribution of  wealth in capitalist society. I have dealt with three Founding Fathers of sociology who are Marx, Durkheim, and Weber. A l l of them were keenly interested social inequality and  the  in the  wealth distribution in newly emergent capitalism. Each  of them, however, has a different view of those topics: M a r x views capitalism as a  benefit  only to  the  capitalist:  one-sidedly  advantageous  distribution  becomes  society due  to normal division  capitalist's  position  more  unequal.  in  a result,  and  reveals  bureaucratic  capitalist  Durkheim  power  officials  is  draws  unevenly  a  Thus,  value the  solidarity  that external  of  and  wealth capitalist  inequality is  comes true in modern capitalist society.  the wealth distribution is seen that  of surplus  market.  of labor. He believes  eliminated and thereby equal opportunity As  expropriation  as fair. Weber focuses  concertrated  by  the  small  upon  power  numbers  of  in capitalist society. Thus, wealth is also unequally held by  the higher bureaucrats.  B. CONTEMPORARY  ACCOUNTS  IN INDUSTRIALIZED  In  this  section,  I  OF THE DISTRIBUTION  SOCIETY:  will  present  A CANADIAN  FOCUS  contemporary  theoretical  wealth distribution in industrialized society. M y presentation of  Blumberg; Westergaard  and  OF  Resler; Porter  and  WEALTH  views  includes the  Clement. They either  on  the  accounts directly  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 23 provide the picture of the wealth distribution or indirectly offer many on the  distribution of wealth  and Canadian societies  in advanced  capitalist  societies:  suggestions  American, British,  respectively.  1. Paul Blumberg  For  the  purpose  of  explaining  the  wealth  inequality  in  contemporary  American society, we can depend on Blumberg's concise summation of social class theories  describing  stability,  and  three  class  prominent  divergence.  post-war  His  main  positions:  question  is  class  convergence,  this:  have  the  class classes  converged, stabilized, or diverged?  The class convergence more affluent, of  the  wealth  gap  of  becoming  the lower strata are moving upward faster. It implies a narrowing between  distribution  narrowing  model assumes that while all strata are  classes becomes  inequality  is  and  as  fairer.  well The  primarily  reducing convergence  due  to  major  social inequality. theorists  hold  occupational  and  Thus  the  that  this  industrial  changes, including the movement away from the production of goods into services, the  expansion  from property  of white-collar jobs,  and  the  shift  in the  and toward capacity. Briefly, they portray  basis the  of control  away  world in which all  people are equally wealthy.  Class strata  stability,  the  second  have been advancing at  the  perspective  Blumberg  cites,  same rate, thus maintaining  argues the  that  all  pattern of  inequality and the structure of the wealth distribution. That is, although  agreeing  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 24 that the general standard of living has risen for all social classes, the adherents of this perspective between  classes,  see little or no reduction in the amount of relative inequality as  shown  in  the  distribution  of  income  and  housing,  the  *  establishment of distinctive class subcultures, etc. In this view, the class  structure  has not changed, and the wealth inequality is stable over time as well.  Contrary  to  the  assumptions  of both  previous  models,  however,  in  the  recent period the living standards of the American people considered as a whole have  stagnated  or  even  declined  (1980:174).  Blumberg argues  convergence and the stability perspectives cannot be tenable now  be  supplanted  Blumberg favours,  by  class  divergence.  In  "the  upper  strata  generally  are  the  class  that  both  any more, and  divergence  holding their  the must  view,  which  own while  the  lower strata decline, thus increasing actual inequality."(1980:175) He suggests that the main cause of class divergence is today's inflation  and  its  highly  differential  effects  (especially in the upon  social  1970s)  classes.  For  prevalent him,  the  wealth distribution becomes badly de-equalized in an inflationary situation.  Blumberg largely in the  finds  a  cause  of  the  economic  incessantly rising level of inflation.  decline  since  the  late  Contemporary inflation  1960s derives  from the cartelization of the earth's shrinking energy supplies, the rising demand for  U . S . grain in a  generated context  in of  part  by  shortages  more the of  populous increasing desirable  and  affluent  demand land  world,  of a  (Blumberg,  and  housing  shortages  growing population 1980:176).  But  in he  the also  emphasizes, in accord with Marx, the role of the concentration of economic power in  the  exacerbating  inflationary  trends.  In  fact,  the  American  economy  is  THEORETICAL ACCOUNTS OF THE DISTRIBUTION OF WEALTH / 25 dominated by a few hundred corporations  (.001 percent  manufacturing (Blumberg,  corporate giants: the largest  of the total)  control  about  200 manufacturing 60  percent  assets and employ nearly two thirds of all manufacturing  1980:176). Such  few firms in an oligopolistic  enormous number of unorganized  buyers  of  all  workers  industry confront an  and easily gain control over prices. In  markets where oligopolies prevail, decreasing demand yields not lower prices but higher unemployment. To wit, during a recession, capitalists do not bring down the prices of products (conversely, they raise them in order to offset declining sales) but lay-off their workers. Therefore, high unemployment coexists with high inflation: stagflation. On the one hand, competition is displaced by concentration, while market prices are, on the other hand, replaced by administered prices. For Blumberg, the unequally  concentrated  wealth  and power  make chronic today's  inflation which results in class divergence.  Blumberg singles out the differential effects of contemporary inflation upon various classes. Those effects are the bases of the theory of class divergence. First of all, because necessities, which make up a greater share  of household  budgets of the poor than they do for those with higher incomes, have been hit harder  by inflation  than  have other goods and services, inflation  has had  its  effect on living standards especially for the lower class. As a matter of fact, low income families must spend more of their income on the faster rising cost of food, shelter, energy, medical care, etc., as shown in Table they  have less  discretionary  income and so that, their  2.1. As a result,  standard  of living is  reduced. The majority of people have trouble in purchasing basic necessities and even the middle class has difficulty in affording the purchase of a home. Table  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 26  Table 2.1 Expenditures on Basic Necessities as a Percentage of Net Family Income, by Income Tenth, 1973-1974, United States Expenditure as % of Net Income  Food  Energy  Shelter  Medical Care  All Necessities  Bottom 10% Second 10% Third 10% Fourth 10% Fifth 10% Sixth 10% Seventh 10% Eighth 10% Ninth 10% Highest 10%  107.6% 44.2% 32.8% 28.2% 26.1% 24.7% 22.2% 19.1% 17.6% 15.5%  41.7 17.7 14.1 12.2 10.6 10.5 9.6 8.2 7.4 6.1  105.2 37.0 23.1 19.0 18.4 16.6 14.6 11.4 10.9 12.2  29.4 12.7 9.8 7.9 7.0 6.2 5.6 4.3 4.0 4.6  284% 111.6% 79.8% 67.3% 62.2% 58.0% 52.1% 42.9% 39.9% 38.4%  Source: Blumberg, 1980.  THEORETICAL ACCOUNTS OF  THE  DISTRIBUTION OF  WEALTH / 27  2.2 expresses class divergence in home buying. Those in the upper class do not have such difficulties ~  they have fared reasonably well through rapid inflation  all, more-or-less maintaining their bundle of economic privileges. Inflation is not an  equal  debacle for all, but  makes the gap  between the lower  and  upper  classes widen: class divergence. In short, the existing wealth inequality aggravates today's inflation and the inflation, in turn, generates even more unequal wealth distribution as identified in purchasing power.  Other consumption  evidence of class divergence, for him, rests on the different class patterns for non-necessities that inflation brings. That is, the upper  class can be insensitive to the inflated costs of non-necessities (the rich still can buy luxury cars despite their highly inflated price thus, under inflation, Cadillacs or Lincolns are sold more, whereas sales of Chevrolets or Fords are reduced: see Table 2.3), while the lower class is very sensitive to them. In other words, the consumption  pattern of the lower class is much more demand-elastic: the lower  class' demand  for goods is easily expanded or reduced by  the change of the  price of goods. In short, the inflationary situation prevents them from affording something  that they could buy  before. Thus the existing inequality between the  living standards of the lower and distribution  that  inflation  upper  brings also  classes is exacerbated. Uneven wealth  affects  consumption  patterns, so  that it  yields inequality in the standard of life.  According to Blumberg, contemporary of  the  decline  of American  economy,  inflation, which is a significant cause  results  mainly  from  the concentrated  economic structure, and its effect is class divergence. Class divergence means a  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 28  Table 2.2 Class Divergence in Home Buying: From Mass Market to Luxury Market in 10 Years, United States  Share of A l l New Houses Bought Income Group  1965-1966  1975-1976  Top Quarter Middle Income Lower Third TOTAL  31% 53 17 100%  58% 38 4 100%  Source: Blumberg, 1980.  T H E O R E T I C A L A C C O U N T S OF T H E D I S T R I B U T I O N  O F W E A L T H / 29  Table 2.3 Class Divergence: 1975 Domestic Auto Sales as a Percentage of 1974 Sales, United States 1975/1974 Model Year General Motors; Chevrolet Cadillac Ford Motor; Ford Lincoln  -28.6 +8.4  A l l U.S. Luxury Cars All U.S. Non-Luxury Cars TOTAL DOMESTIC SALES  +7.0 -20.9 -19.7  Source: Blumberg, 1980.  -23.8 +9.3  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 30 widening gap between the lower and upper classes in terms of not only economic resource more  holding, but  unequal  also life-style. The  concept of class  distibution of wealth. If Blumberg's class  most versatile concept to explain contemporary  divergence divergence  suggests a can be  the  capitalist society, wealth is being  unfairly distributed in the society. In addition, unevenly distributed wealth in an inflationary  situation  results  in  inequality  in  purchasing  power,  consumption  patterns, and quality of life.  2. John Westergaard and Henrietta Resler  Westergaard capitalist  society  inequality  is  and (Britain)  rooted  in  Possession of property accumulation  Resler from  the is the  of wealth  analyze a  class  Marxist  private  inequality  position.  ownership  of  incomes  from  They  capital  crucial means of the  requires  a argue  in  contemporary that  capitalist  social society.  accumulation of wealth. The  property  incomes from earnings. Property ownership is the  in  ownership  as  well  as  most significant income source  only for the upper class, while it is not for the lower class at all, for they own no private property. For example, six out of seven taxpayers have no investment income whatever, income.  Within  while 10 per that,  1 per  cent  cent  of taxpayers  of taxpayers  share  gain  two-thirds  one-third  of all such  of all  unearned  income. The great majority of population, in contrast, have to work to earn their living.  Therefore,  they  suggest  that  the  propertied  classes  are  at  there  has  a  great  advantage for wealth-holding in a capitalist society like Britain.  Superficially,  statistical  evidence  seems  to  show  that  been  a  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 31 long-term trend toward a greater reduction in the  degree  spread  of property ownership, in other words,  of inequality. However, as  nothing but the richest 1 percent's  seen  from  2.4, it is  Table  yielding to the next 2-5 or 6-10 percent. To  be more specific, though the share of the richest 1 per cent has fallen from per  69  cent of total personal wealth in 1911-13 to 42 per cent in 1960, that of  the next 2-5 per cent actually increased from  18 per cent of all wealth to  33  per cent of wealth, and the share of the next 6-10 per cent also grew from 5 per  cent  to  8  per  cent  in  the  same  yielding, in their interpretation, becomes wealth  against  transferred  to  taxation relatives,  -  for  period.  the  a tactic of the  example,  or others,  Also  some  some  rich  property  time before  the  owners in order not to be liable to death duty. In the be  avoided if wealth  is  passed  to  others  richest  through  1 per  cent's  to safeguard of  the  death  their  richest  of the  is  original  U . K . , death duties can  gifts  at  least  seven  years  before the death of the donors. Thus, their kin can become richer earlier. Hence, the change in the statistics should be merely quantitative rather than qualitative. The unequal class structure worsens,  and  the  in capitalist societies always remains  system  of  property  ownership  remains  the  same,  very  or  strongly  concentrated at the top.  In  capitalist  society,  those  who  already  have  property  can  make  and  maintain their wealth via inheritance. In so far as inheritance continues, equality of opportunity cannot be achieved (while Marxist in orientation, this inheritance is one of Durkheim's chief worries about the continuity of external inequality). The competition different  of  wealth-gathering  starting  lines. The  with  inheritance  maintenance  is  compared  of inheritance  to  reflects,  a for  race them,  with the  THEORETICAL ACCOUNTS OF THE DISTRIBUTION OF WEALTH / 32  Table 2.4 Long-Term Trends in Distribution of Private Property, 1911-1960 and 1961-1971, United Kingdom Groups within Adult Population (aged 25+)  Estimated Proportion of Agregate Personal Wealth 1911 /13  1924 /30  1936 %  %  %  %  %  Richest 1% owned Richest 5% owned Richest 10% owned  69 87 92  62 84 91  56 79 88  43 71 79  42 75 83  32 55 n/a  26 47 n/a  Richest 1% owned Next 2-5% owned Next 6-10% owned 9 5 % owned only 90% owned only  69 18 5 13 8  62 22 7 16 9  56 23 9 21 12  43 28 8 29 21  42 33 8 25 17  32 23 n/a 45 n/a  26 21 n/a 53 n/a  %  Hence:  %  Source: Wetergaard and Resler, 1975.  1954  1960  1961  /38  1971  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 33 interests and influences of those  who already  position to acquire it. In fact, it continues state  of property  welfare  have property, or are in a good  to play a major role in keeping the  concentration. Also, according  state and taxation always  fail  to limit  to them, such  policies  as the  the role of inheritance ~ the  welfare state does redistribute some income, but mostly within classes at different stages  in the life cycle. A n d indirect  taxes  are highly regressive while  taxes are slightly progressive. Since inheritance unequally or  opportunity  to those  who  already  have a good  direct  gives a better condition  one, it makes  an unequal  society even more unequal.  The conception  concentration  of property  of power: power to preserve  society. Westergaard  municipal  concentrated land,  of private capital  securities  or  property  company  by data  trade  enterprises provides  assets.  In  also  fact,  presented  such as the property  stocks  by the rich relative to the property  buildings,  -  involves a  or change the shape of the economy and  and Resler explain this  They point out that power-related and  ~  share  and  shares  in Table 2.5. of government  is more  highly  of cash and bank deposit or holding  in private  economic  potential power over policy especially in capitalist economies  where private enterprises dominate. Hence the rich owners have influential power over  the social  policies  of governments,  including taxation  and social  welfare  systems. Accordingly, social policies do not play their part in reducing inequality.  Private  ownership, according  to Westergaard and Resler, is in the hands  of a tiny minority group with massive wealth is  and power, and this concentration  making capitalist society more unequal. They think that radical redistribution  THEORETICAL ACCOUNTS OF T H E DISTRIBUTION  Table 2.5 Concentration of Main Types of Private Property, Kingdom  Groups within adult population  Richest 1% owned Richest 5% owned Richest 10% owned  Source:  Wetergaard  A l l net private capital  Cash and bank deposits  Land, bldgs, trade assets  %  %  %  43 68 79  23 48 64  28 58 74  and Resler, 1975.  O F W E A L T H / 34  1954, United  Govt. and municipal security %  42 71 83  Company stocks and shares %  81 96 98  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 35 would require capitalist  the  mode  dissolution of private  of production itself.  property  and  As long as  thus the  private  abolition of the  ownership  continues,  a  precondition of capitalism exists and the unequal distribution of wealth cannot be remedied. Their standpoint of the distribution is very near to Marx's.  3. John Porter  In with  the  1950s John Porter  a primary interest  nation.  The  without  pervasive  very  rich  or  in understanding  10  estimates  per as  Analyzing an wealth  the  of  that  Canada  very  poor  groups  array  Canadian  and the  only a  is  a  and  families  even  in  for  uniformly without  middle  class  established  1959  earned  middle majority  greater  by  small group.  Canada is analogous  of Canadian society  shape of social inequality in  of statistics, he also outlines the  of institutions, directed  safety)  study  the  society  barriers  to  is more a myth than a social fact. Indeed, no more  minimum necessary  in Canada  handful and  cent  a major  the  view  opportunity, Porter argues, than  undertook  and  concentration profitting  His explanation  to Gabriel Kolko's accounts  the life  $8,000  style  enormous  (1965:132).  concentration of  of economic power  (in income, power, on the  Porter  wealth  on those of the  in a  deference,  distribution of United  States  in the same decade. Kolko also argued the maldistribution of wealth mainly due to  the  enormous  concentration  by  ownership the  by  American  major economic  corporations elite;  in  and 1955,  nonfinancial corporations owned 43 per cent of all corporate cent  of the  controlled  by  national some  reproducible 2,500  men  tangible who  were  assets. the  These owners  the the  overwhelming 200  wealth and corporate and  largest 18.3 per  giants  managers  were (Kolko,  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 36  1962).  According to Porter, of  various  a complex society in the  institutional systems,  each  of which  modern world is composed  is hierarchically organized.  The  hierarchy in each system depends upon power rather than property. Like Weber, he  suggests  that  the  structure  of  power  reflects  the  structure  of inequality.  Therefore, power, which means the recognized right to make effective decisions on behalf of a group of people, is the him,  the  class  system  is  twofold:  independent those  who  variable of class structure. have  power  to  make  the  For major  decisions for the society, and those who do not have such power. Hence, power is often used to perpetuate a given structure of class by the  His focal point rests on the diverse interrelated system,  systems  elites exist — for  holders  of power, elites. In modern society,  of power exist and at instance,  former.  political  elites  the  top of each hierarchical  in political  parties,  economic  elites in corporations, and military elites in the army. According to Porter, each elite not only has  the  task  of directing a functional power system, but also is  able to direct social change. The elites in different institutions co-operate as  compete  with  one  another.  He  adopts  what  might be  called  a  as well  plural  elite  model.  Because elite decisions are taken either each other,  they enter into a scheme  degree of social homogeneity regards  elites  as  more  than  which  in co-operation or in conflict with  of social relationships, and thus acquire a  the  statistical  masses, classes  non-elites (1965:230).  do not In  fact,  have. they  Porter share  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 37 common educational backgrounds,  kinship links,  present and  former  partnerships,  common membership in clubs, trade associations, positions on advisory bodies, and philanthropic groups.  A l l of these help  elite. That is to say, career entry  and the  a  social homogeneity  and social background eventually come to  into an elite. In general, the  system  to produce  of the  determine  increasing complexity of a society's internal  increasing complexity of its relation with other  the elite highly co-ordinated one another.  societies  makes  This co-ordination within the elite leads  to an aggrandizement  of power, the creation of a power elite or a ruling  Therefore,  out,  he  points  although  elite  groups  present  arguments  which will improve their relative positions, they never make demands in  the  foundations  substitute  for  instruments  of the  corporate  (1965:212).  economic order, and  private  Accordingly,  their power to preserve,  that  is, for  ownership  social  of  for  changes  for  changes  public ownership the  society's  inequality increases  promote, and protect their inerests,  center.  as  a  productive  for the  elite  use  not the interests of  the society as a whole.  More  than  anything else,  concentrated  in  modern  corporations  dominate  Canadian  the  are  linked together through  the  economic  elite  in Porter's  which  society.  Canadian  view, A  economy.  relatively Again,  a group of men; the occupies  the  major  economic  power  is strikingly  small number  the  dominant  of  large  corporations  economic elite. Thus, for him,  decision-making positions  in  the  corporate institutions (Porter suggests 985 Canadian residents, holding directorships in  170  economic  dominant elite)  is  corporations,  banks,  composed  the  of  and  most  insurance influential  companies industrial  compose  and  the  commercial  leaders in Canada. Economic power is the basis of political power as many social  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 38 scientists  have  stressed  --  such  as  Mills  (1959),  Miliband  (1969),  Anderson  (1973). A n economic elite within a ruling class not only controls the economy but also influences government that  985  and the nature of a society. Therefore, Porter  individuals dominate  and  control  Canada.  Furthermore,  the  elite  virtually so closed in terms of the family or social background, that its extends  across generations.  Canadian wealth, therefore,  argues is  structure  is concentrated in the elite  and the consequent maldistribution of wealth and power is hard to change.  4. Wallace C l e m e n t  Using  more  confirms  Porter's  Clement  argues the  up-dated  explanation  data,  but  similar  of Canadian  procedures,  society in terms  economic elite of 1972  is more  Wallace of an  Clement  elite  theory.  exclusive in social origins,  more upper class, more clearly knit by family ties than in 1952. Nor has there been  any  sizable  entry  Canadians who are to change  from the  cent  1972;  slightly; per  cent  the  board-rooms  and the in  upper  the  of  the  major  corporations  not British in their ethnic origin. Social structures  (1975). He shows that the  recruited in  into  proportion of the  class increased,  proportion  recruited  the  middle  class  1951 to 59 per increased  proportion recruited from the working class decreased  1951  to  6  per  cent  in  1972.  For him,  are slow  Canadian economic elite  from 50 per cent in from  of  the  economic  from elite  only 18 has  become more closed.  Similar  to Porter,  positions on the  boards  Clement defines of directors  the  economic elite  of dominant  corporations  as  people  who  fill  at  the top of the  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 39 economic system. He finds an economic elite of 946 people holding directorship in 113 dominant in  170  corporations  dominant  in 1972, like Porter's  corporations,  banks,  and  However, Clement goes one step further foreign the  sections  of the  Canadian economy  Canadian  elite, the  and the parastic of  firms  (Clement,  of  life-insurance  and  companies  in  is, he  elite who serve  as  dollars  in  assets  1974:25). Moreover, he anticipates  increases in the  or  and  stresses foreign control over  by distinguishing three groups  million  1951.  attempts to separate national  economic elite. That  comprador  holding directorship  of the  the  elite; the  indigious  agent of foreign  elite, the foreign owners. He finds 62 per cent of the  25  Clement  985 people  more  to  be  outside  owners, directors  of  Canada  that the invasion by foreign  owners  future.  confirms  Porter's  study  on  the  powerful  and  the  privileged in  Canada by using more recent data. He argues that the Canadian economic elite has  become  more exclusive and difficult  foreign owners  to join. In addition, he emphasizes  that  (especially from the U.S.) occupy more portfolios of the elite. For  him, this small number controls most of the wealth and power in Canada.  Porter with  power.  economic official.  elite  and  Power  is  elite  see  that  considerably  — especially  Moreover  exclusiveness  Clement  the  society  concentrated  corporate  circulation  of a co-ordinated  Canadian  is  elite  very  by  is the  similar limited  to  governed tiny  by  number  Weber's  because  elite. The distribution of wealth  of  elite and the  limited opportunity  elite  in  the  bureaucratic the  strong  is already  unequal and becomes more unequal over time, due to the concentrated the  an  to get into the elite. That is, the  very  power by economic  T H E O R E T I C A L A C C O U N T S O F T H E D I S T R I B U T I O N O F W E A L T H / 40 elite  hold  a  advantage  large  share  of their  of wealth,  power,  and  try  make to  their  pass  share  their  even  profitable  larger  by  positions  taking  to  their  families or relatives.  I have discussed some contemporary of wealth  in industrialized society.  theoretical accounts of the distribution  On the  whole, contemporary  sociologists take  pessimistic views of the wealth distribution; Blumberg argues that the impact  of inflation  on  the  lower  class  makes  even  more  unequal  differential the  wealth  distribution and points out that the unevenly distributed wealth finally brings inequality  of people's  Westergaard  consumption  society  Clement reveal exclusive  and life-style in industrialized  society.  and Resler also advocate that the existence of private property  the permission of its inheritance industrialized  pattern  to  that the  economic  elites  become  an  and  make it impossible for the wealth distribution in fair.  Likewise,  economic power in  the  Canadian  is concentrated  industrialized  society:  authors,  by a Canadian  Porter  small number society  -  and of that  concentration causes maldistribution of wealth. In following chapter, I will show a more concrete  and vivid picture of today's Canadian wealth distribution not only  by presenting current data but also by anayzing new statistics. In doing so, each theoretical account could be confirmed in the Canadian reality.  ffl. EMPIRICAL EVIDENCE OF THE DISTRIBUTION OF WEALTH  In  this  chapter, I concern myself with the  Two kinds of empirical evidence by  Canadian  Then  I  authors  present  contemporary  such  and  Canada  as  Canadian  wealth  distribution.  follow. First, I show the current data Osberg,  analyze  new  which includes  Hunter,  data  on  reported  Vaillancourt, Rashid, and the  distribution  information on such  wealth  in  components  as  must be answered.  To  wealth  of  Oja.  income, home ownership, stocks, and other belongings.  Before presenting  the data,  several basic questions  begin with, I have to make clear what is meant by wealth. Wealth is the stock of  accumulated  assets  measured  anything that can be turned wealth  includes residential  trucks,  and  recreational  in dollars. Thus  this  stock  into money for the benefit  homes, vehicles  Canada Savings Bonds, etc.)  vacation plus  homes,  liquid  of assets  of the owner. That is,  investments,  financial  includes  businesses,  assets  (cash,  cars,  deposits,  and non-liquid financial assets (stocks, RRSP's,  and  so on).  Secondly, it is important  to distinguish between  there is a tendency  in daily conversation to use the  Wealth,  above,  as  expressible such as  defined as  property  wages and  involves the  fixed  and  income and wealth, since two terms  accumulated  while income is a flow of disposable  salaries.  It  is useful  stock of  (spendable)  to conceive of wealth  owned assets, whereas income is a flow of money (Osberg,  interchangeably.  as  money  a stock of  1981). Therefore, on  the one hand, income is an important way of accumulating wealth. On the  41  assets  other  EMPIRICAL EVIDENCE hand, wealth  O F T H E D I S T R I B U T I O N O F W E A L T H / 42  also generates income (e.g., investment  income, rent, capital gains,  etc.). Even if we took for granted three types of income: employment (wages and salaries),  non-employment  (receipts  from  investments,  dividends), and social income (social welfare benefits), of  what  we  might  like  to  know  about  flowing in, but it would not tell us  the  rate  rents,  interests,  and  income would tell us much at  which  anything in itself  about  new  wealth  was  wealth already in  hand (Henretta and Campbell, 1978).  What purposes  actually  counts  of measurement.  as  That  income is  to  gambling, settlements from insurance higher education, on? Typically  the  inheritances, above  are  is  rather  difficult  say,  should  income  policies, government  all manner not  to  define  include profits  social  wealth  researchers the  is  tend former  a to  wealth  since  is  wealth,  mainly relying upon  income. This is because the  more deal more  inclusive  concept  frequently  easily  properties,  from  of gifts, bribes, income-in-kind and  included in income data  more  the  support for students in  than with  quantifiable is ever  values of properties  harder are  manner.  income. measured  than to  so  (Vaillancourt, 1985),  chiefly because they are so difficult to measure in any systematic  Hence,  for  the  income  latter.  measure  sometimes  Nevertheless,  In  than  than fact, is in  very difficult  to  determine, especially for consumer durables and collectables, and it usually has to depend on book-value resulting from an owner's  guess rather than  market-value  determined by the forces of supply and demand. For example, the exact value of art  paintings  or old stamps is very hard  to determine  without actually  the  item in question. Although wealth is hard to measure,  selling  the concept explicitly  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 43 tells  us  many  more  things  about  social  reality than  the  narrower  concept of  income.  The  correlation between wealth and income is not perfect. Since income is  an important component of wealth, and since wealth generates income, a strong positive  correlation  society,  the  is  not  correlation  surprising.  is  not  Nevertheless,  substantial.  The  for  certain  elderly  sub-groups  constitute  a  in  notable  example. Many old people are asset rich but cash poor in that they own a home (wealth)  but  have  little  cash  flow  (income). Therefore,  to  examine  the  wealth  distribution, the data presented here deal not only with income statistics but also with some information about other wealth components.  Finally, consider  in  whether  examining data the  proper  on  unit  income  of analysis  and is  wealth,  the  it  is  individual  important  or  the  to  family.  When most families had only one major earner, it made little difference  whether  one  families  consider  composed  the  individual  or  of multiple earners,  the it  family.  is  Now, however,  important  to  examine  with both  most  individual  family distributions of income and wealth. Therefore I analyze the units, rather the  A.  than  for only the  individual or the family,  in the  data  and  for all  second part of  chapter.  CURRENT  In distribution  EVIDENCE  this section, I consider of wealth  in  Canada.  previously published empirical evidence Knowledge of the  wealth  distribution  of the comes  EMPIRICAL EVIDENCE OF from  examining  data  about the key  THE  to  present  an  overview  WEALTH / 44  components of wealth: the distribution of  income, real estate, stock ownership, and therefore  DISTRIBUTION OF  so forth. The  of existing  aim  Canadian  of this section is  data  on  the  wealth  distribution, reviewing especially any evidence of change.  1. Lars Osberg  Osberg (1981) argues that wealth is very unequally distributed in Canada. He  reports that the top 10 per cent of Canadian adults own  57.1  per cent of  all wealth, but of that roughly a third (18.8 per cent) is owned by the top 1 per cent of adults and  over two-thirds (42.9  per cent) by  the top 5 per cent  (see Table 3.1).  He  also pays attention to income distribution which considerably affects the  wealth distribution. To measure the distribution of income, Osberg depends upon quintile data which is generated income, from  by  arraying the whole population in order of  poorest to richest, and  then dividing this ranking into five equal  groups. Table 3.2 gives the share of different quintiles of Canadian family units in the total income of Canadian families for various years between 1978.  During  that period, the share of the poorest 20  1951  and  per cent has remained  roughly constant at around 4 per cent of total income while the share of the richest 20 per cent of family units has remained roughly constant at around  42  per cent of total income (1981:10). If any perceptible change has occurred, there has been some tendency  to a decline in the share of the poorest quintile. This  relatively stable inequality over past 30 years should be something of a surprise  EMPIRICAL E V I D E N C E OF  THE  D I S T R I B U T I O N OF  W E A L T H / 45  T a b l e 3.1 Estimated Wealth Per Canadian Adult* -- 1980  top 1 % next 4% next 5 % (total top 10%) next 1 0 % (total top 20%) next 4 0 % bottom 4 0 % Totals  Number (1) 165,000 661,000 826,000 (1,653,000)  Total Net Worth (Assets-Debts) (2) $146,361M $187,623M $110,549M ($444,534M)  Share (3) 18.8% 24.1% 14.2% (57.1%)  Per Adult (2)/(l) $887,040 $283,847 $133,837 ($268,925)  1,653,000 (3,306,000)  $126,120M ($570,654M)  16.2% (73.3%)  $76,297 ($172,611)  6,612,000 6,612,000  $200,857M $6,228M  25.8% 0.8%  $30,377 $1,002  16,530,000  $778,519M  100.0%  $47,097  *i.e., wealth per household/number of adults in household; M=million. Source: Osberg, 1981.  EMPIRICAL EVIDENCE OF THE DISTRIBUTION OF WEALTH / 46  Table 3.2 Income Shares of Canadians (families and individuals) 1951-1978 Year  Lowest  Second  Third  Fourth  Top 20%  1951 1957 1961 1965 1967 1971 1975 1976 1977 1978  4.4 4.2 4.2 4.4 4.2 3.6 4.0 4.3 3.8 4.1  11.2 11.9 11.9 11.8 11.4 10.6 10.6 10.7 10.7 10.4  18.3 18.0 18.3 18.0 17.8 17.6 17.6 17.4 17.9 17.6  23.3 24.5 24.5 24.5 24.6 24.9 25.1 24.7 25.6 25.2  42.8 41.4 41.1 41.4 42.0 43.3 42.6 42.9 42.0 42.7  Source: Osberg, 1981.  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 47 because,  during  the same  period,  Canada  growth, the average income more than of married  women more than  experienced  doubled,  considerable  economic  and the labor-force participation  tripled. In addition, the welfare state, which came  into existence during this time, has brought a considerable increase in government transfer payments.  To Osberg  see whether presents  problematic  due  structures, Table are  the degree of income  international  comparison  Spain  3.3 clearly  (as measured  approximately  data.  sources  shows that the Netherlands,  by  is a lot, or a little,  Although  to the differences in statistical  the most equal of the O E C D  and  inequality  these  data  and existing  are social  Sweden, and Norway  nations, while the most unequal are France  the Gini  coefficient).  Canada  appears  to rank  mid-way, not as unequal as the United States but more unequal  than the United Kingdom (1981:24).  Osberg argues that the Canadian industrial structure is, to a very large degree, dominated by a small number of rich families. Some foreign-owned and great Canadian family firms control the Canadian economy even though they are easily  excluded  from  Canadian  points out the restricted  sample statistics. As one piece of evidence, he  stock ownership. That is, i n 1970, 87.7 per cent of  Canadian family units reported owning no publicly traded stock at all, while only 3.2 per cent reported owning $5,000 or more. Stock approximately  9 per cent  of the total  assets  ownership constitutes only  of Canadian  families  (1981:36).  Thus direct stock ownership is restricted to a few hands of the very rich. As a result, for most Canadians, tangible assets  such  as houses, other  real estate,  EMPIRICAL EVIDENCE OF THE DISTRIBUTION OF WEALTH / 48  Table 3.3 International Income Inequality ~ Post Tax Standardized Household Size Share of Income Recieved by Income Quintiles  Year  Australia France Germany Japan Neth. Norway Spain Sweden U.K. U.S.A. Canada  1966/67 1970 1973 1969 1967 1970 1971 1972 1973 1972 1972  Average Source: Osberg, 1981.  1st  2nd  3rd  4th  5th  Gini  4.8 4.2 6.5 5.1 9.1 6.6 4.2 7.3 6.1 4.9 5.2  12.2 9.7 10.3 12.4 14.5 13.0 10.2 14.1 12.2 10.9 12.0  17.8 16.2 14.9 16.8 17.5 18.9 16.8 19.0 18.4 17.5 18.0  24.1 22.8 21.9 21.7 22.5 24.7 24.0 24.7 24.0 24.6 24.2  40.9 47.1 46.3 41.9 36.3 36.9 45.0 35.0 39.3 42.1 40.5  .354 .417 .386 .336 .264 .301 .397 .271 .327 .369 .348  6.0  12.0  17.5  23.5  41.0  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 49 automobiles, and consumer durables are the main form of wealth holdings.  According to the data which distributed (even more unequal of wealth, shows consistently  Osberg presented, wealth  is very  unequally  than income). Income, as an important component  unequal distribution since World  the development of Canadian economy. Stock ownership,  War H, i n spite of  also proves  to be very  restricted to the small number of the rich.  2.  A l f r e d  A.  H u n t e r  Hunter emphasizes the importance  of the analysis of wealth rather than  income only. According to his data on wealth, its distributional inequality  looks  more extreme than income inequality. Almost 95 per cent of all assets were held by  the most wealthy  the least wealthy  50 per cent, leaving about 5 per cent distributed  50 per cent i n 1970 and 1977 as Table 3.4 shows. In other  words, the average holders is almost  value  twenty  of assets held by the top 50 per cent  details  of wealth  times the average asset value held by the bottom 50  per cent. In contrast to Osberg's internationally comparative presents  among  on the distribution  of wealth  which  income data, Hunter  shows  a more  unequal  distribution in Britain than i n Canada or the United States (Table 3.5).  Hunter period  believes that Canada  since World  is wealthy,  War II. The Canadian  relative terms, but it has improved  and has been  economy  throughout the  has improved  not only in  in absolute terms as well. This improvement  accompanies increases in the earnings of Canadians as shown in Table  3.6. In  E M P I R I C A L E V I D E N C E OF  THE  D I S T R I B U T I O N OF  W E A L T H / 50  Table 3.4 Cumulative Distribution of Wealth of Families and Unattached Individuals, 1970 and 1977 Percentage of Total Assets Held by:  1970  1977  most most most most most  53.3% 70.9 82.7 91.0 96.4  50.6% 68.1 80.1 88.7 94.7  wealthy wealthy wealthy wealthy wealthy  10 20 30 40 50  per per per per per  cent cent cent cent cent  Source: Hunter, 1986.  EMPIRICAL E V I D E N C E OF THE DISTRIBUTION  OF W E A L T H  Table 3.5 Estimates of the Distribution of Wealth, in Canada, the U.K. and the U.S.A.  Canada U.K. U.S.A. Source: Hunter, 1986.  1%  1969-70 Share of Top 5%  10%  19.6 33.8 25.1  43.4 56.8 43.7  58.0 69.1 53.0  / 51  E M P I R I C A L E V I D E N C E OF  THE  D I S T R I B U T I O N OF  W E A L T H / 52  current dollars, Canadians' incomes have shown about an eight-fold increase since 1951,  although  much  of this  inflation, however, average  has  been  in the late  to  incomes more than  most of the increase occurred prior dropped  due  1970s ~  inflation.  doubled  to 1975,  and  Even  allowing for  in this period, although  men's real incomes  the first time this had  actually  happened in the  post-war  period (1986:61).  Even if Table about  income  inequalities  3.6  inequalities.  is informative, it does not tell us anything in itself Hunter  demonstrates  in the distribution of incomes,  doubled in the period surveyed. The individuals top over  quintile never the  tendency  period for the  received less than of top  1951-81. two  He  also  quintiles  to 65.9  large  and  persistent  real incomes more than  quintile of families  and  unattached  per cent of the total income, while the  41.4  per cent of the total family  argues  that  there  to increase their  income at the expense of the bottom two quintiles received 66.1  even though  bottom  never received more than 4.6  the  has  hold upon  been the  income a  slight  available  three quintiles (1986:63). In 1951, the top  per cent of the total income. This decreased in  per cent, rose in 1971  to 68.2  per cent, and  then dropped  to 67  1961 per  cent in 1981.  Hunter  claims the home is the uniquely important family possession. It is  the major component of both assets and the  net  worth  of  percentage of families  all families  debts, and  taken  together  living in owner-occupied  percentage living in rental accomodation  it makes up (1986:75).  well over  half  Nevertheless  the  dwellings has decreased, while the  has increased. In 1981, 62.1 per cent of  EMPIRICAL EVIDENCE  OF T H E DISTRIBUTION OF W E A L T H  / 53  Table 3.6 Earnings of M e n and Women in Canada i n Current and Constant (1981) Dollars, Selected Years, 1951-81 Current Dollars  Constant Dollars  year  men  women  men  women  1951 1954 1957 1959 1961 1965 1967 1971 1973 1975 1977 1979 1981  $2,575 2,922 3,381 3,556 3,869 4,612 5,322 7,056 8,402 10,815 12,690 14,981 18,159  $1,061 1,161 1,441 1,599 1,692 1,870 2,454 3,307 3,887 5,200 6,442 7,673 9,653  $9,229 10,253 11,308 11,467 12,244 13,565 14,581 16,720 17,651 18,487 18,689 18,564 18,159  $3,803 4,074 4,819 5,158 5,354 5,500 6,723 7,836 8,166 8,889 9,487 9,508 9,653  Source: Hunter, 1986.  E M P I R I C A L E V I D E N C E OF T H E D I S T R I B U T I O N O F W E A L T H all dwellings in the country were owner-occupied  - down from  / 54  63.6 per cent in  1971, 66.2 per cent in 1966, and 67.6 per cent in 1956. Along with this has come  a drop  Canadians  i n the percentage  favor  of the single  housing  and a corresponding rise in the percentage  dwelling units: single attached (e.g., town mobile  detached  which  most  of other kinds of  houses, maisonettes), apartments and  homes. In 1951, 66.7 per cent of all dwelling  units  i n Canada  were  single detached. This decreased to 65.4 per cent in 1961, 59.4 per cent i n 1971 and  57.1 per cent in 1981. Single attached units rose from  per cent in this same period, while apartments to  30.1 per cent.  owner-occupied,  What  single  is occurring  detached  housing  7 per cent to 10.1  and flats rose from 26 per cent  is a  trend  and increasing  over  time  of decreasing  rented, single  attached  units and apartments.  This tendency of  owning  a  is associated with rising housing prices. Today, the dream  single  detached  (especially) lower-income home  buying  home  is just  a  dream  for many  middle- and  Canadians (1986:75) - similar to Blumberg's diagnosis in  i n American  society.  This tendency  is, for Hunter,  making the  distribution of wealth more unequal. That is, to the extent that home is decreasing, therefore, this  suggests an increase in inequalities  addition  to decreasing  inequality  to inequality  due  among owners exists.  A s Table  positive relationship between income group  home 3.7  ownership,  ownership  in wealth. In  for Hunter,  shows, there is a very  an clear  and equity in the home. To wit, the  higher the income group, the higher the estimated home, equity.  Hunter also believes that in an economic system such as Canada's, which  EMPIRICAL EVIDENCE  OF THE  DISTRIBUTION OF WEALTH / 55  Table 3.7 Home-Value of Families and Unattached Individuals by Income Groups in Current (1977) Dollars, 1977 Income Group  Home-Value  under $3,000 $3,000-$6,999 7,000-10,999 11,000-14,999 15,000-19,999 20,000-24,999 25,000-34,999 35,000 and over  $26,911 28,513 31,684 28,988 29,850 31,914 39,267 59,350  Total  33,968  Source: Hunter, 1986.  E M P I R I C A L E V I D E N C E OF is dominated  by  the ownership  family-owned  of private  firms  however,  about  ownership  of stocks in 1980  shows  the  Canada  income  percentage  since  1950.  recipient  corporations, participation in  important source of income and  in  ~ down from  these  W E A L T H / 56  form  is a significant wealth source. According to him,  of dividend income As  D I S T R I B U T I O N OF  and joint-stock  enterprise is an  of wealth. Thus stock ownership one  THE  data  fifteen  received  income  from  the  about one in ten in 1970. Table of individuals  for each  show, dividend income  distributed - much more so than income generally, and  3.8  quintile in  is very  unequally  more so even than total  wealth. In fact, it is almost totally monopolized by the highest quintile. Even the dividend income of the second (5.6,  6.9, 8.8, 6.5%). The  among them  richest quintile is consistently  $616,720,000 in dividend income ~  his data, the  increasing  about  in  the  as much  distribution  of  been  of the  bottom  three quintiles  highest quintile held more than 9 0 %  According Canada  is  ownership,  to  the  data  moving  in  the  home-value,  and  has  shared  the lower  dividend  income.  In  even  been  direction four  direction  provides, the of  inequality.  decreasing. In  stock ownership,  which  distribution Annual are  major  of  years  while the small 1980,  whereas the lowest held less than  Hunter  wealth, are unequally distributed and over time.  as  in the  surveyed, the share of the highest quintile has been increasing, share  per cent  taken together (1986:77). Over time, according  concentrating trend seems to have  inequality  10  top 7,742 income recipients in Canada in 1980  four quintiles of income recipients to  below  the  1%.  of wealth in  income,  housing  components  of  the distributions have become more unequal  EMPIRICAL EVIDENCE OF THE DISTRIBUTION OF W E A L T H / 57  Table 3.8 Percentage of Individual Dividend Income by Income Quintile Quintile  1950  1960  1970  1980  lowest second third fourth highest  5.1% 5.8 5.4 5.6 78.1  3.5% 4.7 5.1 6.9 79.8  2.1% 5.5 4.5 8.8 79.1  0.3% 1.1 2.5 4.7 91.4  Source: Hunter, 1986.  EMPIRICAL EVIDENCE OF  THE  DISTRIBUTION OF  WEALTH / 58  3. Francois Vaillancourt  In  his  Vaillancourt Accounts,  research  on  the  introduces varied  the  Survey  income  sources  of Consumer  distribution  of income Finance,  and  and  data  such  the  economic as  security,  the National  Census. As  Table  3.9  shows, these three sources of data all indicate an increase of income between 1951 the  and  1981. The  average real income of Canadians more than doubled over  period. According  to  him,  various factors  can  explain this  change. For  example, changes in workers' schooling, in the capital stock per worker, and in technology  are  some of the determinants  of increased labor productivity. This  increase leads to higher real wages and thus higher real income ~ wages being the most important component of income in Canada (1985:4).  To  represent the degree of inequality, Vaillancourt draws upon quintile  shares and  the Gini coefficient, both of which are readily available for Canada  since 1951  and  Finance. Even  are widely used. He if SCF  data are used  uses data from  the Survey  of Consumer  extensively in the discussion of income  distribution, it omits several types of income ~ capital gains or losses, gambling gains and losses, and income in-kind such as free meals or living accomodations. Also  the  SCF  sample  excludes  residents of the Yukon  and  the  North  West  Territories, members of households on Indian reserves, and inmates of institutions ~ for example, prisons and long-term-care hospitals (1985:7). This omission tends to decrease measured inequality. For instance, capital gains, which are excluded from per  SCF,  are highly concentrated in the upper income brackets: in 1981,  cent of capital gains was  declared by  individuals with  an  61.2  income above  EMPIRICAL  EVIDENCE  O F T H E D I S T R I B U T I O N O F W E A L T H / 59  Table 3.9 Per Capita Income of Canadians, 1951-81, Current and Constant Dollars Data Source/ Income Concept  1951  1961  1971  1981  1981/ 1961  1981/ 1951  *  National Accounts/ GNP current constant (1951$)  1,545 1,545  2,174 1,913  4,379 2,890  13,959 3,889  6.42 2.03  9.03 2.51  SCF/ money income current constant (1951$)  989* 989*  1,459* 1,284*  2,891 1,908  9,636 2,685  6.60 2.09  9.74 2.71  Census/ money income current constant (1951$)  -  -  2,705** 1,785  8,542** 2,380  * non-agricultural population only. " i n c o m e for the year preceding the census (1970 and 1980). Source: Vaillancourt, 1985.  E M P I R I C A L E V I D E N C E OF  THE  D I S T R I B U T I O N OF  W E A L T H / 60  $50,000 (1985:59).  Table  3.10  presents  includes transfers and indicates the group, 40  distribution  of money  income in Canada  is not corrected for taxes paid between 1951  existence  of a  4  - 40  rule: 4  per  and  which  1981. It  cent of income to the  lowest  to the highest (1985:11). Although there were a number of changes in  demographic factors and consistently cancelled  the  existed  out.  and  This  these  changing  rule looks  such as inflation and  Vaillancourt  in labor force participation rates, the factors  insensitive even  taken to  4-40  together  the  major  rule  seem  to  has have  cyclical variables,  unemployment.  also  contrasts  the  distribution  of  money  income  in  Canada  with the distribution in other industrialized nations. Such comparisons are difficult since there  are differences in the  given type of unit, and in  a  manner  appears  to  Osberg's  approximately  data,  mid-way  that in  among terms  distribution of income. Table 3.12  provides  data  Kingdom, and  among  coverage of a  in the definition of income. However, Table 3.11  similar to  rank  type of units surveyed, in the  Canada, the  United  the other  OECD of  the  shows,  countries,  Canada  inequality  of  the  internationally comparative  the  United  States.  The  data  States  and  least  indicates overall inequality of income is greatest in the  United  in the  differences, however, are  United  quite small and  In  sum,  Canadians has  Kingdom, with  Canada in between. The  perhaps insignificant (1985:15).  Vaillancourt's data more than  doubled  makes clear that the since World  War  mean real  II and  in 1980  income  of  compared  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 61  Table 3.10 Income Inequality in Canada, 1951-81, Money Income, Quintile Shares and Gini Coefficients, A l l Units Quintile  Shares  first (lowest)  second  third  fourth  year  fifth (highest)  1951* 1961* 1971 1981  4.4 4.2 3.6 4.6  11.3 11.9 10.6 10.9  18.3 18.3 17.6 17.6  23.3 24.5 24.9 25.2  42.8 41.1 43.3 41.8  *non-farm units only. Source: Vaillancourt, 1985.  Gini coefficient 0.390 0.368 0.400 0.377  EMPIRICAL EVIDENCE  OF T H E DISTRIBUTION  OF W E A L T H / 62  Table 3.11 Gini Coefficient, Pre-tax Income, for Economic Families, O E C D Countries Economic Families Country Canada Australia France Germany Japan Netherlands Norway Sweden U.K. U.S.A. Source: Vaillancourt, 1985.  Year  Rank  1969 1966/67 1970 1973 1969 1967 1970 1972 1973 1972  5 10 1 3 9 4 6 7 8 2  Gini 0.382 0.313 0.416 0.396 0.335 0.385 0.354 0.346 0.344 0.404  EMPIRICAL EVIDENCE OF THE DISTRIBUTION OF WEALTH / 63  Table 3.12 Gini Coefficient, Pre-tax Income, for Families and Individuals, Canada, the U.K. and the U.S.A. Families  Individuals  country  year  rank  Canada U.K. U.S.A.  1975 1975 1975  2 3 1  Source: Vaillancourt, 1985.  Gini 0.379 0.355 0.423  year  rank  1974 1972-73 1974  2 3 1  Gini 0.472 0.462 0.501  EMPIRICAL EVIDENCE OF T H E DISTRIBUTION OF WEALTH / 64 quite favorably with the income of residents of other industrialized countries, and that the distribution of income, nevertheless, remained relatively stable in Canada between 1951 and 1981. This may seem surprising but can be explained by the interplay of various forces, such as the increase in the number of unattached individuals and the number of working women (1985:57).  4. Abdul Rashid  Rashid income data  deals with he reports  income as a major constituent factor of wealth. The is based  upon  the 1981 Census  of Canada. He is  particularly interested in one end of income spectrum; the top one per cent of all families. It is valuable to examine the top 1 per cent families because that group is easily omitted in sample surveys in spite of the considerable amount of wealth held by that group. This group must be very rich. In fact, the top one per cent of all census families recieved an income of $93,200 or more in 1980; their  average income was $143,061,. over five times  the national average of  $26,748 (1986:15).  He and  shows that there is a very strong positive relationship between income  wealth. The top 2.17 per cent  of families (those  having  an income of  $50,000 or more) received not only 9 per cent of the aggregate income of all families, they also owned about 28 per cent of all financial assets and 22 per cent of the aggregate business equity in 1977 as shown in Table  3.13. In this  group, about 3 out of 5 families had a business/professional interest, while 3 out of  4 families with  an income  of $75,000  or over  reported  such interests  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 65  Table 3.13  Selected Financial Characteristics of High Income Economic Families, Spring 1977  Characteristic Average income financial assets equity in busi./farm/prof. net worth  Family Income $50,000 +  Source: Rashid, 1986.  All Families  119,294 369,797 262,617 796,066  19,010 12,439 13,413 56,122  0.73 4.6 21.7 14.3 10.4 72.5  100.0 100.0 100.0 100.0 100.0 16.4  Dollars 80,132 163,463 135,890 413,848 Per  all families aggregate income aggregate financ. assets aggregate busi./farm/prof. aggregate net worth incidence of busi./farm/prof.  Family Income $75,000 +  Cent 2.17 9.1 28.5 22.0 16.0 61.3  EMPIRICAL  EVIDENCE  OF  T H E DISTRIBUTION  OF  WEALTH  /  66  very  large  (1986:45).  The  distribution  proportion is  of a l l profits  generally  securities income  they  large  i) m u c h  composition  Table  families  compared  of, a n d iv) higher  investment  whereas  investment  income  composed  22.9  p e r cent  Furthermore,  composed cent  income 4.1  family  that 6.4  income  there  income  79.8  large  shares,  per cent from, iii)  o f investment  income  reported  of the top  1  $4,155.  By  of a l l f a m i l y income,  income;  a n d the top percentile  that  per cent  of the top percentile is  it  investment  income  per cent  in  to him,  portfolios of  of  of a l l families  investment  a  the top 1  average  per cent  o f a l l families  hold  families,  p e r cent  is as  Rashid's  data,  b u t it composed held  19.17  per  1980.  is a tendency  that  o f a l l f a m i l y income  while  that  the distribution  percentage  h a d increased substantially  p e r cent  in  who  of, ii) higher  from  o f the top f a m i l y  cent of a l l investment  of total  while  income  $41,046  Therefore  1980, 41.1  income,  did; the average  incomes  to a l l other  incidence  is, i n  skewed  large corporations. A c c o r d i n g  high  corporations.  as  much  is highly  very  higher  3.14). T h a t  gained  with  be checked,  have  higher (see  in these  profits  go to a few v e r y  the families  should  families  of  the counterparts  investment  over  income  time. In 1970,  a n d 14.0 i n 1980  6.4  component  investment  per cent were  as a  income  o f the top 1 p e r p e r cent  and  22.9  per cent respectively (1986:80).  Rashid's the  data  top percentile  also  income  demonstrates families  the extreme  a n d other  inequality  families.  As  i n housing  Table  between  3.15 presents,  EMPIRICAL EVIDENCE OF T H E DISTRIBUTION  O F W E A L T H / 67  Table 3.14 Incidence of, and Average Income from, Various Sources of Income and Composition of Total Income, Census Families, 1980 Aver.  Incid. source  wage & sal. n-farm sf-employ. farm sf-employ. invest, income other income Source: Rashid, 1986.  Income  Compo.  all top 1% all top 1% all top 1% families families families families families families %  %  $  $  %  %  84.6 9.3 4.8 41.1  88.7 36.7 10.6 79.8  24,520 14,701 8,737 4,155 15,766  79,660 80,914 58,787 41,046 26,486  77.6 5.1 1.6 6.4 9.3  49.4 20.7 4.4 22.9 2.6  -  EMPIRICAL EVIDENCE compared to about  O F T H E D I S T R I B U T I O N O F W E A L T H / 68  65 per cent of all families,  86 per cent of the high income  families owned their homes -- single detached. A n average estimated value of the top percentile family home is about $208,000 in 1981 while the average for the typical  family  home  is  $76,000.  The  difference  of  average  annual  mortgage  top  per  payment between two groups is also striking.  Although families  as  Rashid  such  characteristics  region, occupation, education, number  however, emphasizes earned  examines  of  the  1  of income recipients, etc.,  the contribution of working wives. In  cent he,  1980, working wives  20.6 per cent of all family income and 15.3 per cent of the rich families  by means of earning on average that the  $8,528 and $26,801 respectively. He also notes  increasing participation of wives in the v/ork force between  1970 and  1980 was more pronounced among the well-to-do. In 1970, only 36 per cent of the wives in the highest income families worked, compared with 44 per cent in all  families.  But in  1980,  59  per  cent  wives  in  the  top  percentile  families  worked, compared with 56 per cent of all families.  In families they are  short, control  Rashid's a  data  considerable  tells  us  amount  that  the  top  1  per  cent  of income, especially from  of income investments;  also living in large and expensive homes; and working wives in their  families contribute to earning high income.  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 69  T a b l e  3.15  Dwelling Characteristic of Census Families, 1980  Single Detached Dwelling Value of Dwelling Annual Mortgage  Source:  Rashid, 1986.  % $ $  A l l Families  Top 1% Families  65.4 75,810 4,719  85.6 207,863 7,673  E M P I R I C A L E V I D E N C E OF  THE  D I S T R I B U T I O N OF  W E A L T H / 70  5. G a i l O j a  Oja undertaken  reports  wealth  data  relying  upon  sample  surveys  of  households  occasionally by Statistics Canada. The 3 published household  surveys  were taken in 1970, 1977, and 1984. Her data focuses upon drawing conclusions about the degree of inequality present in the wealth distribution and how changed from  1970 to 1984.  First of all, the growth mean  wealth  per family  in wealth is impressive. As Table  and unattached  individual  was  $104,222 and $38,146 respectively. For all units, this 4.7 times the $18,189 1970 average same period the Consumer dealing  here  that average  it has  with real  estimated averaged  in 1984 at  to $85,344 --  - measured in current dollars. During the  Price Index  growth  3.16 shows,  rose by  a factor of 2.98, so we are  that is not negligible  (1987:7).  wealth in real terms continued to grow; average  She  emphasizes  wealth in constant  dollars(1984) was $44,363, $68,149, and $85,344 in the three successive periods.  By  examining  median  wealth  and  the Gini  coefficient,  Oja shows the  changing trend of wealth inequality. That is, her data displays increasing median wealth  but a  decreasing  Gini  coefficient  over  time, which  implies  a  possible  reduction in wealth inequality. As shown in Table 3.16, median wealth increased from $7,575 i n 1970 to $39,876 in 1984.  The Gini coefficient has declined from in  the same  period as reported in Table  0.716 to 0.686 for all family units 3.17  -  from  0.681  to 0.641 for  EMPIRICAL EVIDENCE OF THE DISTRIBUTION OF WEALTH / 71  Table 3.16 Percentage Composition of Wealth of Families and Unattached Individuals, 1970, 1977, and 1984 1977 1970  Average wealth current $ Average wealth constant(1984) $ Median wealth Source: Oja, 1987.  1984  $  $  $  18,189 44,363 7,575  46,273 68,149 21,754  85,344 85,344 39,876  EMPIRICAL EVIDENCE OF T H E DISTRIBUTION OF WEALTH / 72  Table 3.17 Distribution of Wealth of All Units 1970, 1977, 1984 Decile  1970  1977  1984  Poorest 2 3 4 5 6 7 8 9 Richest  -1.0 0.0 0.3 1.3 3.0 5.4 8.3 11.8 17.6 53.3  -0.6 0.1 0.5 1.6 3.5 5.9 8.6 12.1 17.6 50.7  -0.4 0.1 0.6 1.8 3.6 5.7 8.2 11.6 17.5 51.3  Source: Oja, 1987.  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 73 families and from has  individuals. Wealth  distribution  somewhat changed towards equality, and the change i n the period between  1970 and  0.811 to 0.782 for unattached  and 1977 looks more remarkable 1984.  The change between  than  that i n the period between 1977  1977 and 1984 seems to be a continuation i n  the equalizing trend. However Table  3.17 also shows that i n the three years,  the poorest wealth decile was always  negative sum of wealth. The richest owned  more  than  unequal over has  50 per cent. Therefore, the distribution  - much more unequal  than  of wealth  still  looks  very  income ~ despite a slight mitigating trend  time. Compared to the great growth in wealth, the distribution of wealth not experienced any profound  change. There seems to have been very little  redistribution via a trickle-down effect.  Wealth composition over the same period of time had changed somewhat with non-liquid assets becoming more important show  signs  of levelling  off or even  and home-ownership starting to  declining  -  according  to Table  3.18  (1987:21). Estimated market value of home i n 1984 was 45.3 per cent of total wealth  instead of 49.8 per cent in 1977 and 46.9 per cent  however, equity i n owner-occupied of wealth financial  On  homes remains the most important component  (both assets and debts) for Canadian families. Increases i n non-liquid assets  are due mainly  composition of wealth percentage  in 1970. Still,  to the growth  seems to be stable over  i n RRSP's.  Generally, the  time. Among the three periods,  differences of the wealth composition are not clear.  the whole,  real  assets  (e.g., homes, cars)  are far more equally  distributed than financial assets and equity i n business as shown i n Table 3.19.  EMPIRICAL EVIDENCE  O F T H E D I S T R I B U T I O N O F W E A L T H / 74  T a b l e 3.18 Percentage Composition of Wealth of Families and Unattached Individuals Assets equity in business estimated market value of home* equity in other real estate cars other vehicles financial assets liquid assets other financial assets total assets Debts mortgage debt on home* consumer debt other personal debt total debt wealth * includes vacation homes, n/a - not available. Source: Oja, 1987.  1970 20.4 46.9 6.4 4.0 n/a  1977 19.3 49.8 6.5 4.3 n/a  1984 21.3 45.3 5.8 4.6 0.9  14.7 7.6 100.0  12.9 7.2 100.0  13.3 8.6 100.0  10.1 3.6 1.3 15.0 85.0  10.9 3.4 0.8 15.2 84.8  8.7 2.9 0.9 12.5 87.5  EMPIRICAL EVIDENCE OF THE DISTRIBUTION OF WEALTH / 75 The  richest quintile has held about  50 per cent of total equity in the home  while it has held 80-90 per cent in such wealth components as business equity or financial assets. Except for cars, all wealth components are very unequally distributed. Over the fourteen year period (1970-84) the pattern of the wealth distribution is found to have remained  quite stable rather than changeable. The  percentage structure of the wealth distribution in each year looks very similar to other years. However, the stability is on the high level of inequality. In the three years, the richest wealth quintile held about 79 per cent of total wealth (see Table 3.19).  In short, according to Oja's data, in spite of a near doubling of average wealth in real terms over the 14 year period, the patterns of both composition and  distribution of wealth  are observed  to be stable. The wealth  distribution  among Canadian families and unattached individuals has become somewhat more equal, but as Oja reported, the change is only minor.  On  balance, as discussed above, the data concerning wealth as reported by  several Canadian specific,  authors, shows wealth to be very unequally distributed. To be  despite a more  than  doubling of average  Canadian  incomes,  income  distribution has been unequally stable; the value of home, the most important wealth component, also has been unevenly distributed and de-equalized over time, due  mainly  income fragment  from  to increasing  housing  stock ownership  costs and decreasing home  has been  extremely  of the super rich in recent decades.  restricted  ownership; and  to a very small  Over time, the pattern of the  distribution of wealth has not shown any significant change, even though some  E M P I R I C A L E V I D E N C E OF T H E D I S T R I B U T I O N  Table 3.19 Distribution of Wealth Components by Wealth 1970, 1977, and 1984 Component  1Q %  OF W E A L T H / 76  Quintiles,  5Q  Total  %  %  %  %  %  2Q  3Q  4Q  1970 equity i n business equity i n home equity i n other real estate cars net financial assets total wealth  -0.1 0.2 0.4 8.1 -7.1 -1.0  0.2 1.2 0.5 16.0 1.2 1.6  1.8 12.6 3.8 19.6 6.6 8.4  5.0 31.8 11.2 22.8 15.4 20.1  93.1 54.2 84.0 33.5 83.9 70.8  100.0 100.0 100.0 100.0 100.0 100.0  1977 equity i n business equity i n home equity i n other real estate cars net financial assets total wealth  0.1 -0.1 0.3 6.4 -4.6 -0.6  0.3 1.8 1.0 17.3 1.8 2.2  2.1 13.3 6.3 20.1 7.8 9.4  4.6 32.2 15.0 23.2 15.8 20.7  92.9 52.8 77.5 33.0 79.3 68.3  100.0 100.0 100.0 100.0 100.0 100.0  1984 equity i n business equity i n home equity i n other real estate vehicles net financial assets total wealth  0.3 0.1 0.1 4.0 -3.5 -0.3  0.3 2.0 1.3 15.0 2.2 2.4  1.5 14.0 8.2 19.0 7.3 9.3  4.0 30.0 16.1 23.7 19.3 19.8  94.0 53.9 74.4 38.3 74.7 68.9  100.0 100.0 100.0 100.0 100.0 100.0  Source: Oja, 1987.  EMPIRICAL E V I D E N C E O F T H E DISTRIBUTION authors say there is a tiny equalizing (or de-equalizing) some  wealth  differences  components.  such  as  This  different  disagreement  definitions  is  due  of concepts,  O F W E A L T H / 77  trend of distributions in mainly  to  different  methodological  sample  size,  and  different  data source. In sum, the published data on the distribution of wealth in  Canada  reveals  that  wealth  is  very  lopsidedly  wealth inequality is considerably greater than the  allocated  ~  the  remained  very  unequal.  In  following  of  the  that of income inequality. That is,  wealth distribution in Canada appears to have maintained  and  extent  its stable pattern  section, I examine  the  distribution of  wealth in Canada by means of new empirical evidence.  B. NEW  EVIDENCE  In  this section, I deal with new and different  wealth in Canada. To draw only  renew  several  data  a vivid  picture  patterns  shown  present some data not covered in the offers  new  Canada  and  different  whereas the  evidence  previous  of today's wealth distribution, I not in  the  previous  on the  section  data on the distribution of  previous  section  I  also  section. Thus the present section  distribution of wealth  aimed  but  to review the  in  contemporary  existing literature  of  empirical accounts of the wealth distribution.  I Canada  update, in this which  section,  significantly  the  affect  data  wealth  of income and  income distribution in  distribution.  also  I  present  post-tax  income data and pre-transfer income data to see the effect of government policies on  the  payment  income  redistribution:  policies function  to  to  see  redistribute  how  adequately  income.  taxation  I provide  the  and data  transfer concerning  EMPIRICAL EVIDENCE income  disparity  between  O F T H E D I S T R I B U T I O N O F W E A L T H / 78  occupations  by  comparing  average  incomes  of  all  individuals with those of such highly paid occupations as chief executive officers, lawyers, wealth  doctors,  and  components.  considered.  In  dentists.  That  addition,  is, I  Then, the  I  home,  investigate  concern stock  some  myself  with  ownership,  expensive  the  and  household  representative  automobiles  are  belongings  (air  conditioners, microwave ovens, and dish-washers) to examine the wealth inequality appearing in modern Canada.  1. N e w T r e n d i n C a n a d i a n Income  As  discovered  determinants The  Canadian  income,  one  of  the  of wealth, had continuously increased since the  average  between  before,  real  income of Canadians  had  more  than  most  important  Second World War.  doubled in the  period  1951 and 1981. However, this trend seems not to have persisted in the  1980's. As Table 3.20 provides, the Canadian average income (in current dollars) increased, but this was mainly due to inflationary effect. In fact, average income in constant dollars (1985) tended to decrease between tendency  was  specially marked  between  1981  and  1980 and  1984.  That  1985. This new is, compared  to  $32,615 in 1981, the average real income was only $31,205 in 1984. This fact is likely to result from early  late  1970s and  the  1980s.  The As  the recession occurring between the  distribution of income, nevertheless,  shown in T a b l e 3.21, the  augmentation  appears to have remained  stable.  4 - 40 rule was unbroken. Except for the tiny  of the first quintile (0.6 per cent), income shares by quintiles had  E M P I R I C A L E V I D E N C E OF  THE  DISTRIBUTION  OF  W E A L T H / 79  Table 3.20 Average Income for A l l Units, 1980-85  Current Constant (1985 $)  1980  1981  1982  1983  1984  1985  22,708 32,494  25,641 32,615  27,746 31,852  29,113 31,597  30,002 31,205  31,959 31,959  Source: Statistics Canada (1985), CAT. 13-207.  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 80  Table 3.21 Shares of Total Income by Quintiles, 1980-85  1980 1981 1982 1983 1984 1985  iQ  2Q  3Q  4Q  5Q  Total  4.1% 4.6% 4.5% 4.4% 4.5% 4.7%  10.5 10.9 10.7 10.3 10.3 10.4  17.7 17.6 17.3 17.1 17.1 17.0  25.3 25.2 25.0 25.0 25.0 25.0  42.4 41.8 42.5 43.2 43.0 43.0  100.0 100.0 100.0 100.0 100.0 100.0  Source: Statistics Canada (1985), CAT. 13-207.  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 81 not changed in the first half of 1980s. The richest quintile, without fail, owned more  than  40  distribution decrease  per  cent  in 1980s in  distribution  of  total  income  was as unequal  1980s  due  maintains  to  the  (43 per  as before,  recession.  its 4 - 4 0  rule  cent  in  regardless  In  short,  in recent  years  1985).  Income  of average  income  Canadian  income  the even  if the economic  recession brought a decrease in real income.  2. Canadian Welfare State  Table  3.22 and 3.23 present  the data  about income after tax. Just  like  income before tax, income after tax, generally, was declining from the end of the last  decade  $26,985  (see Table  3.22).  Average families and unattached  in 1979, while receiving $26,780  individuals got  in 1985 (in 1985 constant  dollars).  This decrement too is presumably due to the recession. A s shown in Table 3.23, the  quintile distribution of income after  that of income before  tax. Even  tax does not look  if the poorest  very different  quintile slightly  increased  share of total income, the richest quintile still controlled more than of total income even after  from their  40 per cent  taxation in the last fifteen years. Over the first half  of the 1980s, the post tax income shares of the poorest quintile were only 0.7 per  cent  larger  than  their  income  share  before  tax  (see Table  3.23). The  taxation system is actually regressive at the lower end of the income scale, and neither  particularly regressive  1986:65).  In short,  nor progressive  the Canadian  taxation  through  system  remainder  in the recent  practically did not play any significant role in redistributing income.  of it (Hunter, two decades  E M P I R I C A L E V I D E N C E OF  THE  DISTRIBUTION  OF  W E A L T H / 82  Table 3.22 Average Income After Tax for A l l Units, Selected Years  Current Constant (1985 $)  1973  1975  1977  1979  1981  1983  1985  9,076 24,255  11,786 25,603  14,334 26,858  17,123 26,985  21,718 27,625  24,489 26,578  26,780 26,780  Source: Statistics Canada (1985), CAT. 13-210.  EMPIRICAL E V I D E N C E OF  THE  DISTRIBUTION OF  W E A L T H / 83  T a b l e 3.23 Shares of Income After Tax by Quintiles, Selected Years  1971 1973 1975 1977 1979 1981 1983 1984 1985  IQ  2Q  3Q  4Q  5Q  Total  4.2% 4.4% 4.6% 4.4% 4.8% 5.3% 5.1% 5.2% 5.4%  11.5 11.6 11.5 11.6 11.5 11.8 11.3 11.4 11.4  18.2 18.2 18.2 18.4 18.1 18.0 17.7 17.7 17.6  25.0 25.1 25.1 25.5 25.2 24.9 24.9 24.8 24.8  41.1 40.8 40.6 40.2 40.3 40.0 41.0 40.8 40.8  100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0  Source: Statistics Canada (1985), CAT. 13-210.  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 84 Table  3.24  refers  to  income data  table, we can find that average its  quintile  distribution  is  very  before  income before much  transfer  transfers  unequal.  By  payments.  From  the  increased overtime, but  subtracting  income  before  transfers  from average income (Table 3.20), we can also find that the amount of  transfer  payments  $3,715  in  change  unequal  increased  in  1985. However, the income  the  recent  increased  years  — from  amount  $2,305  of transfers  distribution. Comparison between  is  Table  in  1981  to  not  likely  to  3.20  and  3.24  reveals that the richest quintile can control more than 40% of total income both before and after just  a  little  transfer  mounted government transfers,  bit  by  payments  transfer  payments  (less  and the poorest quintile benefited than  4 per  cent  increases).  The  seem at most to have a only small redistribution effect  with  regard to wealth. This is because most beneficiaries of transfer  payments  (71.4%)  are those who are above low income cut-off (Vaillancourt, 1985:33). In fact, even if they do form a significant component of the incomes of those who receive no salary or wage, they are of little benefit to those who are employed, regardless of  their  wage  transfer  salary  level.  That  is, the  employed poor  are  excluded  from  presenting  Gini  payments, while the unemployed rich are enjoying them.  Table coefficients in  or  Gini  3.25  summarizes  of pre-transfers coefficients  of  Canadian  welfare  state,  by  income, total income and post-tax pre-transfers  redistributive effect of transfers  income  and  total  income. Differences income  means  the  while differences in Gini coeffients of total income  and post-tax income means the redistributive effect of tax. Accordingly, the bigger both Table  differences 3.25,  the  are  the  income  greater  the  effects  redistribution  effect  of the of  welfare state.  transfers  are  As shown in  getting  stronger  E M P I R I C A L E V I D E N C E OF T H E  DISTRIBUTION  OF  W E A L T H / 85  Table 3.24 Average Income and Quintile Distribution Before Transfer Payments for A l l Units, 1981-1985 Average($) 1981 1982 1983 1984 1985  23,336 24,727 25,798 26,422 28,244  Quintile Distribution(%) 1.4 1.1 0.9 0.9 1.0  9.6 8.9 8.2 8.1 8.3  Source: Statistics Canada (1981-5), CAT. 13-210.  17.8 17.3 17.0 17.1 17.0  26.4 26.4 26.5 26.5 26.5  44.9 46.3 47.5 47.4 47.3  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N OF W E A L T H / 86  Table 3.25 Gini Coefficient Calculated Units, Selected Years  1971 1973 1975 1977 1979 1981 1982 1983 1984 1985  on Different Income Concepts for A l l  Pre-Transf. (1)  Total Income (2)  Post-Tax (3)  (D-(2)  (2)-(3)  0.477 0.445 0.451 0.445 0.444 0.439 0.457 0.473 0.473 0.470  0.400 0.392 0.392 0.388 0.387 0.377 0.384 0.394 0.390 0.389  0.371 0.368 0.364 0.362 0.359 0.351 0.355 0.363 0.360 0.358  0.047 0.053 0.059 0.057 0.057 0.062 0.073 0.079 0.083 0.081  0.029 0.024 0.028 0.026 0.028 0.026 0.029 0.031 0.030 0.031  Source: Statistics Canada (1985), CAT. 13-210.  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 87 while  that  of tax  could  not  bring  very  slowly  income  increasing.  equality  These  (even  post-tax  distributed shown in Table 3.23). In general, the had  too  little  government is the  impact  alter  income  of increment,  income  is  tax-transfer  inequality.  In  very  unequally  system  other  however,  in Canada  words,  Canadian  is not successfully taking a role of income redistribution. In fact,  very hard majority  to  see  offices  Marchchak,  the  as  an  independent  institution  It is because political parties  are  it  representing financed  by  groups such as large corporations, and because the majority of  are  1981).  parliamentarians  held  by  upper-middle  and  A recent empirical research  coming from the  professionals,  professionals,  to  cent between  87.9 per  government  of population today.  particular interest political  to  levels  upper  class  tells  us  that the  top two S E S categories  and middle managers) has 1965 and  1984  representatives  (owners,  (c.f.,  percentage of self-employed  grown from 77.3 per cent  (Guppy et  al, 1987).  After  all, the  government intends to maintain or change income structure for the benefit of the rich rather than the poor.  3. Income D i s p a r i t y  Along  with  the  general  trend  of income growth  and  income distribution,  we must note income inequality between different occupations. The data regarding annual  incomes  of  several  occupations  in  recent  years  provides  more  visible  evidence of the changing distribution of income nowadays.  Table lawyers  3.26  (typical  gives information of average net high  income  earners)  and  all  incomes of doctors,  taxpayers.  These  high  dentists, income  E M P I R I C A L E V I D E N C E OF  THE  DISTRIBUTION  OF  W E A L T H / 88  Table 3.26 Average Income of Self-Employed Doctors, Dentists, Lawyers, and A l l Taxpayers in Canada, 1951-84 Year  Doctors  Dentists  Lawyers  A l l Taxpayers  1951 1961 1971 1980 1981 1982 1983 1984  $9,975 17,006 39,555 62,273 66,722 75,175 89,124 95,797  $6,287 14,692 27,862 55,328 60,139 66,151 76,690 74,665  $10,214 15,718 25,828 45,921 53,123 57,882 61,457 65,167  $3,149 4,348 7,237 13,716 15,415 16,825 17,333 18,240  1984/1951 1984/1980  9.60 1.54  11.88 1.35  6.38 1.42  5.79 1.33  Source: Revenue Canada, 1982-86.  EMPIRICAL EVIDENCE OF THE DISTRIBUTION OF WEALTH / 89 earners held much greater income than all taxpayers. In fact, doctors earned 5.3 times, dentists earned  4.1 times, and lawyers 3.6 times as much as incomes of  all taxpayers in 1984. The average 1951  income of each occupation had grown from  to 1984. It is, however, found that the growth rate of incomes of doctors,  dentists, and lawyers was much greater than that of all taxpayers in the same period. To be precise, percentage  changes between  1951 and 1984 are +860,  + 1088, and +538 for doctors, dentists, and lawyers respectively while percentage change for all taxpayers dentists,  and  lawyers  respectively, compared  is +479 in the same period. During gained  to +33  +54,  +35,  and  +42  per  1980s, doctors, cent  of growth  per cent increase for all taxpayers. Earners of  those occupations gain much more income than average earners, and that income difference becomes marked over time.  We Chief  can see an even more extreme case by comparing average  Executive  Officers  (CEO, the top active  operation of the company) and average in Table  3.27, the income inequality  executive  salaries of  responsible for the  individual wages and salaries. As given between CEOs  and average  earners has  been intensified over time; CEOs earn 6.3 times as much as average earners in 1980  and the former  earn 7.2 times as much as the latter in 1984. In other  words, wages and salaries of the majority of individual earners increased by 30 per cent while salaries of CEOs increased by 49 per cent. Moreover, the period between 1980 and 1986, the salary increment of CEOs was 72 per cent (53 per cent between 1981 and 1986). This rate of increment  is surprising because at  the similar period (1981-86), total wages and salaries of Canada increased at 35 per cent (from  178,318.1 million dollars to 241,265.1 million dollars) and total  E M P I R I C A L E V I D E N C E OF  Table 3.27 Average Individual Wages & of Canada, 1980-86  THE  DISTRIBUTION  OF  W E A L T H / 90  Salaries* and Average C E O  Salaries**  Year  Ave. Ind.  CEO  CEO/Ind.  1980 1981 1982 1983 1984 1985 1986  10,040 11,129 11,927 12,307 13,070 n/a n/a  62,493 71,000 80,230 86,167 93,491 100,877 108,544  6.3 6.4 6.7 7.0 7.2 n/a n/a  1984/1980 1986/1980  1.30 n/a  1.49 1.53  Source: *Derived from Revenue Canada, 1982-86. **Derived from Sobeco, 1986.  EMPIRICAL EVIDENCE OF labor income ~ benefits  wages and  of  DISTRIBUTION OF  salaries plus payments by  employees,  such  unemployment-insurance and per cent (from  THE  as  W E A L T H / 91  employers for the future  pension-plan  contributions  and  workmen's-compensation premiums ~ increased at 36  196,002 million dollars to 267,277 million dollars), as reported by  Statistics Canada (1986:9-12).  Additionally, CEOs options, and tell  the  can  obtain  great  profit  so on. Although CEOs receive very  entire story; one  must  from high  also consider  matter  average  of fact, average  base  salary was  total  compensation  $108,544 in  1986  salaries, salaries do  bonuses  calculating the total compensation package (Anisef and a  bonuses, perks,  and  average earners, let alone  CEOs and  options in  was  $128,564  1986). If one  include CEOs' bonuses, perks, stock options, etc., the gap CEOs and  not  Baichman, 1984:113). As  of CEOs (Sobeco,  stock  stock  while  were to  of incomes (between  the poor or the  unemployed)  becomes much more pronounced.  On very  the opposite side, the augmentation of minimum wage rates have been  slow  experienced  and  tenuous. Table  3.28  shows federal minimum  workers and young workers, from 1975  wage rates for  until today. For twelve years  (1975-86), in spite of great inflation, the minimum wage rate has small as  54  per  between 1981  cent for adults and  and  increase; when  the  1986,  38  per  when total wages and  total labor income showed  grown at as  cent for youths. At  the period  salaries showed a 35 a  36  per  cent  per cent  increase; when  CEO's salaries 53 per cent increase; the minimum wage rates crept up by only 14  per  cent  for adults and  showed absolutely no  increase at all for youths.  E M P I R I C A L E V I D E N C E OF T H E D I S T R I B U T I O N  OF W E A L T H /  Table 3.28 Federal Minimum Wage Rates for Experienced Adult Workers and Young Workers (under 17), 1975-86 Adult Workers  Young Workers  rate  effective date  rate  $2.60 2.90 3.25 3.50 4.00  J u l . 23 1975 Apr. 1 1976 Dec. 1 1980 M a y 1 1981 M a y 1986  $2.35 2.65 3.00 3.25 3.25  Source: Labor Canada, 1976-86.  EMPIRICAL Briefly,  the  great  E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 93  income  inequality between  occupations  becomes  even  greater  over time. That is, compared to average  earners, the well-to-do, such as doctors,  dentists,  enjoyed  lawyers,  Furthermore  and  especially CEOs,  high rates  of income  increase.  the increasing rate of minimum wage is almost invisible. Such facts  tell us,  after  all, that the  become  more  unfair  income structure  despite  superficial  of  is very unequal continuance  of  and is tending  4  -  40  rule.  to  This  superficial stability of income distribution is seen as the result of increased labor force participation. This unequal trend of income, an important determining factor of  wealth,  also  affects  the  distribution  of  wealth;  toward  the  more  skewed  distribution.  4. T h e F a m i l y  Home  As confirmed before, the family home has consistently been overwhelmingly important in wealth holding regardless of time. The family home is a particularly important wealth component to the middle and the lower classes rather than  the  upper  the  only  class. As a matter way  becomes  to  difficult  to the data  possess  any  for the  Statistics Canada reported,  of 1956,  detached 59.4,  enduring  home  57.1 per  1966,  in  and  Canadians, owning a home  wealth.  middle and the  dropped to 63.2 per cent years  of fact, for many  As  Hunter  lower classes  to  the percentage of home-owned  1984 from  cent in  1951,  56.5  per  1961,  however,  to own homes.  57.6, 66.2, and  1972 respectively. As well, the  decreased  argued,  cent  in  1971, and  1984,  is  it  According households  63.6 per cent  in the  percentage of single  compared  to  66.7,  65.4,  1981, while that of apartment  increased from 26 per cent in 1951 to 32.3 per cent in 1984 (Statistics Canada,  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 94 1986).  These  facts  testify  that  it is not  as  available  as  before  for  Canadian  families to own their home, which used to be the main wealth component.  The distribution of family showed in the can  be  from  by  different  the  Family  Home-value  means  the  years,  lowest  home-value  quintile  the has  home-value  no at  value is quite  unequal  as  existing  data  previous section. This trend of unequal distribution in home-value  confirmed  calculated  home  home,  kind  Expenditure  current  expected quintile  while the  $117,037.  of data.  Because  The  figures  Survey  data  price of one's owned  highest  no  homes.  in Table  for  1978  1982,  quintile families have,  of highly inflated  and  occupied home. In  housing cost,  1982. In  the  on  are  3.29  both  second  average,  not  only  a the  home-value of the lower class families but also that of the middle class families (the  third quintile), as  Blumberg singled out,  quintile families, however, families 1982. the  had Family  almost  had  same  more  amount  Expenditure data  decreased  share of total  of home-value  over  The  fourth  and  the  richest  home-value  (more  than  exhibits that first, it becomes  lower and the middle class to own a family  time.  50  per  more  cent)  difficult  home over time, second,  in for that  the home-value is very unequally distributed (more than total income); third, that there is a tendency To  for inequality to become more intensified as  sum up, home-ownership  has  recently become  has become more unequally distributed over time.  more  difficult  time goes by. and  home-value  EMPIRICAL EVIDENCE OF THE DISTRIBUTION OF WEALTH / 95  Table 3.29 The Value of Dwelling by Quintiles,* 1978 and 1982 1978  1982  Quintile  Mean $  Comp. %  Mean $  Comp. %  1 2 3 4 5  0 10,499 31,666 48674 78,901  0.0 1.4 21.6 24.9 52.1  0 0 32,067 60,880 117,037  0.0 0.0 16.0 32.5 51.5  Total  32,144  100.0  40,769  100.0  *home-value quintile. Source: Derived from Statistics Canada, 1978 and 1982.  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 96 5. Stock O w n e r s h i p  As  mentioned  before,  stock  ownership  is  a  very  important  source  of  wealth in such an advanced capitalist country as Canada. But the distribution of stock ownership is more unequally distributed than of wealth. In fact,  any of the other  stock ownership is believed to be concentrated  components  in the  hands  Shareowners  study  of a small number of rich families.  The  data  of the  shows that in 1984, corporations.  Toronto  11 per  Stock Exchange's  Canadian  cent of Canadians owned shares in publicly-traded  This incidence of owning shares  in Canada  is one  half  the  New  York Stock Exchange estimate of the share ownership in the United States (TSE, 1984:31).  The  level  of  stock  ownership,  however,  substantially  increased  time; the proportion of the adult population owning stocks increased to cent in 1986 (TSE, 1986). This rising rate, nevertheless,  over  17.5 per  remained below 26 per  cent in U . S . , 21 per cent in Sweden, and 35 per cent in Hong Kong. Despite the that  substantial four  rise  adult  corporations.  of stock  Canadians  This  means  market  in five that  participation, the  more  own no capital, at  least  Canada  is  still  far  from  a  significant fact no publicly  is  traded  capitalism of  the  masses.  In the direction shares  1980s, the percentage distribution of dividend income is also in the  of equality. while  the  By  rest  and gain,  large, as  the shown  highest in  quintile  Table  loses  3.30.  some  of  Nevertheless,  their the  distribution seems extremely unequal; in 5 years (1980-84), while the top quintile  EMPIRICAL EVIDENCE O F T H E D I S T R I B U T I O N O F W E A L T H / 97  Table 3.30 Percentage of Individual Dividend Income by Income Group i n Canada, 1980-84 Quintile  1  2  3  4  5  Total  1980 1981 1982 1983 1984  0.2 0.2 0.2 0.1 0.2  1.0 0.9 0.8 0.8 1.2  2.4 2.5 2.2 2.4 3.2  5.5 6.3 5.6 6.1 7.5  90.8 90.0 91.2 90.6 87.9  100.0 100.0 100.0 100.0 100.0  Source: Derived from Revenue Canada, 1982-86.  Top  1%  51.4 44.3 44.6 43.9 44.0  EMPIRICAL EVIDENCE OF  THE  DISTRIBUTION OF  WEALTH / 98  controlled about 90 per cent, the top percentile controlled about 45 per cent of all stocks.  To sum  up, even if the level of the stock market participation rises, and  individual dividend income distribution shows only a slight change toward equality, most people are still excluded from stock ownership and a few of the super rich control most of income from  stock ownership. This strongly contributes to the  unequal distribution of wealth.  6. Automobiles  As  Oja  reported, automobiles  are  the  most  equally  distributed  wealth  components for Canadian families. Inequality, however, exists within the ownership of the automobiles; the rich assumed  to  own  non-luxury  are assumed cars.  to own  Therefore  one  luxury cars and measure  of  the  others are changing  distribution of wealth examines the trend in the sale of luxury and non-luxury automobiles. That particularly  in the  is, if luxury cars early  1980s  were  sold  more  in which  real  income  than  non-luxury  decreased,  then  cars, the  distribution of wealth became more unequal.  As  presented in Table 3.31, such U.S. luxury cars as Lincoln, Corvette,  and Cadillac were sold much more in 1984 as  large  as  +30.7. At  the same  non-luxury car sales is +2.8,  than in 1983. Percentage change is  period, the percentage  change of all U.S.  which is lower than total percentage change,  +3.2.  Likewise, the number of new-registered imported luxury cars increased in 1980s  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 99  Table 3.31 New-Registered U.S. Luxury and Non-Luxury Cars i n Canada, 1983-84 1983  1984  1984/1983  Lincoln Corvette Cadillac A l l U.S. L u x u r y A l l U.S. Non-Luxury  3,177 827 4,681 8,685 608,443  4,588 1,011 5,754 11,353 625,362  + 44.4% + 22.2 + 22.9 + 30.7 + 2.8  Total  617,118  636,715  3.2  Source: Derived from M V M A , 1986.  EMPIRICAL EVIDENCE  OF  THE  DISTRIBUTION  OF W E A L T H / 100  \  Table 3.32 New-Registered Imported Luxury Cars in Canada, 1980-84  Jaguar Mercedes-Benz BMW Audi/Porche/VW Total Imports  1984  1984/ 1980  1984/ 1981  856 2,749 3,157 27,453  2.95 1.36 1.38 1.14  1.11 1.21  185,479 237,860 216,563 213,328 214,084  1.15  0.90  1980  1981  1982  290 2,021 2,286 24,024  n/a 2,467 2,617 n/a  n/a 2,339 2,738 n/a  Source: Derived from M V M A , 1984 and 1986.  1983 590 2,664 3,136 23,860  -  E M P I R I C A L E V I D E N C E OF as Table new  3.32  motor  vehicles  showed  +4  times as much as in 1980.  imported  total imported  car  per  occurred  sale  As  frequently  real  than  90  income  expensive unit), and  the  1980  greater. In  1984,  Jaguar  was  per  cent  period. Compared  but  same  household  sold three  Mercedez-Benz  to and  early  decreased,  1980s, in which  luxury cars were  ones. This  fact  reflects  the  being  sold  change  total  BMW  sale  much  of the  more wealth  Belongings  to the  ownership  of automobiles,  belongings as automatic  the  ownership  wealth  number of household  distribution.  As  Table  of  dishwashers, air-conditioners  expensive  3.33,  3.34,  and  (central  belongings  the evidence of  3.35  provide, the  owning of those belongings increased. Compared to 28.6  per cent in 1980,  35.2  families owned automatic dishwashers  per cent and and  7.5  such  distribution  household  grew in the recent years of economic recession, that would be  5.3  1981,  economic recession  micro-wave ovens are also good measures of the changing  de-equalizing  1984  1984.  of wealth. That is to say, i f the sale of such  cent and  and  inequality.  7. Other H o u s e h o l d  All  between  well sales of other imported luxury cars grows  above, in the  non-luxury  distribution toward  increment  cars at the same  dropped  discussed and  cent  much  mounted to 110-120 per cent in  As  W E A L T H / 101  971,210 in 1984). At the same period, the increment rate of  luxury car sale was  faster than  D I S T R I B U T I O N OF  shows. According to Statistics Canada (1986:2), annual sales of  (932,060 in 1980, imported  THE  per cent of  per  Canadian  air conditioners respectively. Likewise,  EMPIRICAL E V I D E N C E OF T H E  DISTRIBUTION  O F W E A L T H / 102  Table 3.33 Ownership of Automatic Dishwashers i n Canadian Household, 1980-84  Total hse. Owning hse. Owning %  1980  1981  1982  1983  1984  7,787 2,228 28.6  8,026 2,509 31.3  8,254 2,747 33.3  8,460 2,882 34.1  8,857 3,116 35.2  Source: Statistics Canada (1984-86), CAT. 63-224.  EMPIRICAL EVIDENCE  OF THE DISTRIBUTION OF W E A L T H / 103  T a b l e 3.34 Ownership of Air-Conditioners (central unit) in Canadian Household, 1980-84  Total hse. Owning hse. Owning %  1980  1981  1982  1983  1984  7,787 411 5.3  8,026 459 5.7  8,254 503 6.1  8,460 596 7.0  8,857 663 7.5  Source: Statistics Canada (1984-86), CAT. 63-224.  E M P I R I C A L E V I D E N C E OF T H E  Table 3.35  DISTRIBUTION  OF  W E A L T H / 104  Ownership of Micro-Wave Ovens in Canadian Household, 1982-84  Total hse. Owning hse. Owning %  1982  1983  1984  8,254 843 10.2  8,460 1,055 12.5  8,857 1,430 16.1  Source: Statistics Canada (1986), CAT. 63-224.  E M P I R I C A L E V I D E N C E OF the owning percentage  per cent in 1984.  wealth  distribution  on  wealth  the life  D I S T R I B U T I O N OF  of micro-wave ovens increased from  to 16.1  distributed  THE  per cent in  more  unequal  strongly affects people's  but  also  purchasing  the quality of their  means  that  unequally  power, thereby, influences  lives. Likewise, inequality exists in  every part of expenditure. According to the family expenditure data in 1982, richest  quintile  spent,  1982  This fact not only means that, in some sense, the  became  styles and  10.2  W E A L T H / 105  on  average,  $867.1  for health care  recreation while the poorest quintile spent $218.4 and  and  the  $2616.2 for  $311.1 respectively. Even  if the rich much more consume than the poor, the net incomes (total income total expenditure) of theirs, ironically enough, always  bring surplus value whereas  the poor constanly consume more than they earn, despite their weak consumption (Canada,  1978  and  (current consumption only  the  fifth  1982). +  quintile  $8,200 in 1982.  Table  3.36  shows  taxes) in 1969, held  the  However, the  average income  1978,  large amount poor  quintiles  income, piled debts. Therefore, the wealthy  and  1982.  of net  and  expenditure  In the three years,  income  -  have consistently  as  much  gained  have become more wealthy  no  as net  while the  poor have got poorer in today's Canada.  In this section, I have examined new  trends and  of the wealth distribution by means of providing new  confirmed old tendencies  data and  updating existing  data. In the recent years, the Canadian income distribution is, in general, stable in  spite  of  an  absolute  decrease  in  real  income.  Income  inequality  among  different occupations became pronounced. Nevertheless, the redistributive effect of transfer payments and taxation looks insignificant. Home-value is slightly toward  inequality whereas stock ownership  changing  is more slightly going to equality. In  E M P I R I C A L E V I D E N C E OF T H E  D I S T R I B U T I O N OF W E A L T H / 106  Table 3.36 Average Income and Expenditure for A l l Units, by Income Quintile, 1969, 1978, and 1982 1Q  2Q  3Q  4Q  5Q  Total  1969 (1) (2) (D-(2)  2116.1 2848.0 -731.9  4907.3 5470.1 -562.8  7330.2 7758.1 -427.9  9835.7 9963.9 -128.2  16207.0 15079.0 + 1128  8079.2 8223.8 -144.6  1978 (1) (2) (D-(2)  5688.1 6505.0 -816.9  12057.2 12723.7 -666.5  17821.9 17774.4 + 47.5  24094.3 22929.0 + 1165.3  38251.0 33707.5 + 4543.5  19582.6 18727.8 + 854.8  1982 (1) (2) (D-(2)  8118.0 8998.3 -880.3  16944.6 17328.3 -383.7  25728.8 24877.8 + 851.0  35686.4 33357.3 + 2329.1  58961.0 50749.9 + 8211.1  29087.8 27062.3 + 2025.5  (1) ; average income (2) ; average expenditure Source: Statistics Canada (1978, 1982), CAT. 63-007.  E M P I R I C A L E V I D E N C E O F T H E D I S T R I B U T I O N O F W E A L T H / 107 any  case,  Even  these  in the  wealth  early  components  1980s,  the  recessional  rich has strengthened. As a result, household On  belongings  balance,  this  grew.  section  offered  wealth  distribution  general  income  distrubution  evidence  of  de-equalizing  in  wealth  doubt,  period,  a  reflects  the  very  the  unequally  purchasing  unequal  preponderance  today's  and  no  distributed.  power  of  the  the sales of luxury cars and other expensive  This fact  skewed  are,  Canada.  wealth  of  The  average working population in the recent years.  lies  evidence reason  distribution  distribution,  distribution of wealth.  look  largely  toward  why stable, in  the  the  a  more  data  despite increase  of  such of  IV. CONCLUSION  This thesis has concerned itself with the distribution of wealth in Canada. The aim of the thesis has been to investigate distribution of wealth thesis,  in Canada. In doing so, I have, in the  discussed theoretical accounts  have  presented  the pattern and the trend in the  and  analyzed  of the  first half of the  wealth distribution. Following this,  empirical evidence  of  the  wealth  distribution  I in  Canada.  Confronted such  by the  surging forces  classical social thinkers  as  of capitalism in the  Marx,  Durkheim, and  nineteenth  Weber  raised  century, questions  about social inequality and the wealth distribution. According to Marx, capitalism, by  its  very  nature,  unfairly  profits  the  capitalist;  capitalism  provides  the  bourgeoisie with all of surplus value and a powerful position in labor market. As a result, the unequal wealth distribution in capitalist society gets worse until proletariat Durkheim not  by  lead  revolution  to  replace  believed equal opportunity an  normal  a  anomic  division  more just  or  forced  of labor.  distribution in future  with  a  would evolve in modern  division  He also  capitalism  of labor,  thought  society.  but  by  the  socialist capitalist  hands  of  top-level bureaucratic  a  guaranteed  a  contrast,  believing that  officials,  which curb  societies, of  opportunity  grows as capitalism develops, Weber worried about the concentration the  society.  development  that equal  In  individual  the  bureaucracy of power in wealth  and  freedom.  Concerning  the  wealth  distribution  108  in  industrialized society,  as  a  whole,  C O N C L U S I O N / 109 contemporary  sociologists are  more pessimistic, emphasizing the  dark  side of the  wealth distribution. In general, they foresee a more uneven distribution of wealth in  the  future  impact  of  industrialized  of inflation  on  the  lower class  distribution of wealth even more wealth  causes  society.  Westergaard  freeze  unequal  society.  Resler  argues  vis  the  unequal.  consumption  and  Blumberg a  vis  believe  upper  Furthermore,  patterns that  and the  that  the  the  differential  class  makes  unequally  life-styles  existence  in  of  the  distributed  industrialized  private  property  the asymmetrical pattern of the wealth distribution in industrialized society,  making  any  more  equitable  arrangement  possible  only  if  private  eliminated. Porter and Clement focus on the more concentrated  property  is  economic power of  a small economic elite in Canada. This concentration of power and the  limits to  get into it results in a maldistribution of wealth in Canadian society.  By  and  large,  distribution, reported  the  current  empirical evidence  by Canadian authors such as  on  of growing wealth, its distribution appears to have  greater  remained than  home-value, supplement  unequal ~ the extent of the  that and  the  of  income  stock-ownership  concentrated  government  policies maintain  more  rich  rather  pronounced.  than  in  the  the  maintained its stable  Every  of  or change the poor.  For example,  Income CEOs  a  wealth  few  component  pattern  — income, gathered  select  people.  higher  between  is,  the  benefit of  occupations  rates of salary  to  becoming  That  income structure for the  disparity  enjoy  spite  wealth inequality is considerably  -is lopsidedly distributed. New data  hands  wealth  in Canada. In  previously published findings suggests that wealth may  increasingly  the  inequality.  Canadian  Osberg, Hunter, Vaillancourt,  Rashid, and Oja, shows that wealth is unevenly distributed  and has  the  becomes  increase  as  C O N C L U S I O N / 110 compared to the minimum wage where change is almost invisible. Inequalities in home-value  and  stock-ownership  expensive automobiles and reveal  more  unequal  look  still  great.  Also,  increasing  sales  of  other house belongings even in an economic recession  distribution  of wealth  in contemporary  Canada.  In other  words, the inequality of wealth brings unequal purchasing powers and  differential  life-styles.  In  terms of the  Canadian  wealth  distribution, it is hard  theoretical account is the most plausible. Rather, each  to say  theoretical account  which has  a  certain validity for understanding a part of the distribution of wealth in Canada. Marx's account wealth  distribution  guarantees  mainly  unfairly  Westergaard which  is useful to explain the  and  due  strong  unequal  to the nature  power  of  the  perhaps  increasingly disparate  of capitalist system  capitalist  in the  Resler's argument of private property and  the wealth  holders could keep their wealth  and  itself  which  market. Likewise, inheritance, through  transfer it to the  next  generation, also helps to explain the fact that the wealth distribution gets even worse today. Weber's point concerning the concentration of power by bureaucratic officials  is a  very  wealth  distribution.  contemporary power  and  divergence income  and  important One  Canadian large as  purchasing  of  managerial  wealth  outlined  Table 3.36). As  piece  key  by  in  to explaining evidence class  Canadian  Blumberg  power  such  in the  can as  economy.  Canadian be  inequalities  found  CEO  in  the  increasingly  and  the  fact  that  get strong  Also  the  concept  of  is consistent with  the  enlarging gap  recent recession period in Canada  such, to explain Canadian  class of (see  wealth distribution, it is necessary to  consider various theoretical accounts rather than to rely on only one perspective.  C O N C L U S I O N / 111 Nevertheless, Durkheimian optimistic view of the wealth distribution resulting from equal  opportunity  does  not  look reliable  Durkheim's dream of a society integrated  to  explain today's  wealth distribution.  by a normal division of labor,  where  external inequalities abated, has not materialized yet.  Finally  it  is  important  to  consider  why  the  wealth  distribution  is  so  unequal and appears to have become even more unequal in today's Canada. The answer is first found in that government transfer  payments  and taxation  systems  have too little impact on the redistribution of wealth, as discussed in Chapter III (see  Table 3.25).  the rich to the super  The welfare  not  acted  to redistribute  poor. It is mainly because political parties  large corporations  (Marchak,  state has  and  1981). A second  most  political offices  answer  is found  are  in the  are  money  from  financed by  held by the  upper  widening income  the class  disparity  between the upper and the lower classes. This was discussed in Chapter III too. It  takes  money  to  make  money.  Compared  to  income  increase  of  average  earners, that of the well-to-do, such as doctors, dentists, lawyers, and CEOs, flies up much faster.  The widening gap of income as an important source of wealth  results in the more unequal distribution of wealth. Also unequal and de-equalized wealth distribution partly results from the inheritance system as Westergaard and Resler pointed out in Chapter II. The existence of inheritence means an  unequal  starting  external  line  inequality, society  still  in  which  the  wealth-holding  Durkheim believed,  remains.  The  riches  can  race.  In  would be  other  words,  it  be  eliminated  in  passed  through  the  means modern  capitalist  generations  family and the well-to-do have a head start in the acqusitions race.  of a  The  CONCLUSION  / 112  that money  begets  question can be answered, finally, by the fact  money -- wealth begets wealth. That is, those who are wealthy can control their wealth for the purpose of making the wealth bigger by savings, investments, or any  other ways of making big money  money than  and have no wealth  while the poor always  to control. Even  i f the rich  use up all their  much  more consume  the poor, the net incomes (total income - total expenditure) of the rich,  ironically  enough, always  constantly  bring surplus value  consume more than  they  to themselves  earn, despite their  whereas  weak  the poor  consumption (see  Table 3.36). The wealthy can afford to hire tax lawyers and financial managers, while  the poor  continue  wealth resulting from affects people's  to stand  in food  bank  lines.  The  maldistribution of  the above reasons, in turn, affects people's social life. It  purchasing  power. Therefore, different consumption patterns and  different life styles result. In the end, it brings unequally differential quality of life.  As  well,  these  differences will  pass  to the next  generation  and the  differences will be, then, more pronounced. This is a cycle of poverty or cycle of wealth into which people are born.  On  balance, the unequal  de-equalized  trend of changing  pattern of existing wealth  distribution  wealth  distribution  i n today's  Canada  and the ultimately  results from  the fact that the Canadian society is a capitalist society in which  the wealthy  can do anything to enlarge and maintain their wealth; from  to  saving  lobbying. Many would argue, especially Marxists, that in Canada, an advanced  capitalist country, i f you are not wealthy rich.  at birth, you are not likely to become  BIBLIOGRAPHY  Anderson, Charles 1974  The Political Economy of Social Class. Englewood Cliffs. N . J . : Prentice-Hall.  Anisef, Paul and Etta Baichman 1984 What Jobs Pay: The Complete Guide to Careers and in Canada. Edmonton: Hurtig. Blumberg, Paul 1972  1980  The Impact of Social Class: A Book of New York: Crowell.  Salaries  Reading.  Inequality in an Age of Decline. New York: Oxford University Press.  Bottomore, Tom ed. 1983 A Dictionary' of Marxist Thought. Cambridge: Harvard University Press. Bottomore, Tom and Robert Nisbet, eds. 1978 A History of Sociological Analysis.  New York: Basic Books.  Braverman, H a r r y 1974 Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century. New York: Monthly Review Press. Canada, Labor Canada 1976-86 Labor Standards in Canada. Canada, Statistics Canada 1978-82 Family Expenditure  Ottawa: Labor Canada.  in Canada  Ottawa: Statistics Canada.  Canada, Statistics Canada 1986 Annual Sales of New Motor Vehicles, Catalogue no. 73-007. Ottawa: Statistics Canada. Canada, Statistics Canada 1986 Estimates of Labor Income, Catalogue no. 72-005. Ottawa: Statistics Canada. Canada, Statistics Canada 1985 Income After Tax, Distribution by Size in Canada, Catalogue no. 13-210. Ottawa: Statistics Canada. Canada, Statistics Canada 113  / 114 1985  Income Distribution by Size, Catalogue no. 13-207. Ottawa: Statistics Canada.  Canada, Statistics Canada 1984-86 Market Research Handbook, Catalogue no. Ottawa: Statistics Canada. Canada, Statistics Canada 1978,82 Survey of Family Expenditure, Ottawa: Statistics Canada. Canada, Revenue Canada 1978-86 Taxation Statistics. Clement, Wallace 1975  1983 Dahrendorf, Ralf 1972  Durkheim, Emile 1964 1972 Forcese, Dennis 1986  Catlogue no. 63-007.  Ottawa: Revenue Canada.  The Canadian Corporate Elite: An Analysis of Economic Power. Toronto: McClelland and Stewart. Class, Power and Property: Essays on Canadian Society. Toronto: Methuen. "On the origin of social inequality." In P. Laslett and W . G . Runciman, eds. Philosophy, Politics, and Society (second series). Oxford: Basil Blackwell. The Division of Labor in Society. New York: The Free Press. In Anthony Giddens, ed. Emile Durkheim: Selected Writings. New York: Cambridge University Press. The Canadian  Class Structure.  McGraw-Hill Ryerson Ltd.  Fried, Albert and Ronald Sanders 1964 Socialist Thought: A Documentary New York: Anchor Books. Giddens, Anthony 1971  63-224.  History.  Capitalism and Modern Social Theory; An Analysis the Writings of Marx, Durkheim and Weber. New York: Cambridge University Press.  Giddens, Anthony and David Held 1982 Classes, Power and Conflict. Berkeley: University of California  Press.  of  / 115 Gilbert, Sid 1982  "The Canadian class structure in the sociological conscionsness." In Dennis Forcese and Stephen Richer, eds. Social Issues: Sociological Views of Canada. Scarborough: Prentice-Hall Canada Inc.  Goldthorpe, John H . and Fred Hirsh, eds. 1978 The Political Economy of Inflation. Cambridge: Harvard University Press. Grabb, Edward G . 1984 Social Inequality: Classical and Contemporary Theorists. Toronto: Holt, Rinehart and Winston of Canada. Guppy, Neil, Sabrina Freeman, and Shari Buchan 1987 "Representing Canadians: changes in the economic backgrounds of federal politicians, 1965-84" Canadian Review of Sociology and Anthropology, August, 1987. Hardach, Gerd, Dieter Karras and Ben Fine 1978 A Short History of Socialist Thought. New York: St. Martin's Press. Henretta, John C. and Richard T. Campbell 1978 "Net worth as an aspect of status." American Journal of Sociology, 83:1204-23. Hiller, H a r r y H . 1986 Hunter, Alfred A . 1986  Canadian society: A Macro Analysis. Scaborough: Prentice-Hall Canada Inc. Class Tells: On Social Inequality in Canada (second edition). Toronto: Butterworths.  Hurst, Charles E . 1979 Johnson, Leo A . 1979  1972  The Anatomy of Social Inequality. The C . V . Mosby Company.  "Income disparity and the structure of earnings in Canada 1946-74." In James E . Curtis and William G . Scott, eds. Social Stratification: Canada (second edition). Scaborough: Prentice-Hall Canada Inc. "The development of class in Canada in the twentieth century." In Gary Teeple, ed. Capitalism and the National Question in Canada. Toronto: University of Toronto Press.  / 116 Kolko, Gabriel  1962 Wealth and Power in America: An of Social Class and Income Distribution. New York: Frederick A . Praeger, Publishers.  Lenski, Gerhard Emmanuel 1966 Power and Privilege: A Theory of Social New York: McGraw-Hill. MacPherson, Crawford Brough 1978 Property: Mainstreams and Critical Oxford: Basil Blackwell. Marchak, M . Patricia 1981 Ideological Perspectives on Canada Toronto: McGraw-Hill Ryerson.  Analysis  Stratification.  Positions.  (second ed.)  Marx, Karl 1967  Capital, volume 1. New York: International Publishers.  1967  Capital, volume 3. New York: International Publishers.  1968  Theories of Surplus  1975  Economic and Philosophic Manuscripts New York: International Publishers.  Value. Moscow: Progress Publishers. of  1844.  M a r x , K a r l and Friedrich Engels 1971 Manifesto of the Communist Party. Trans. Samuel Moore. Moscow: Progress Publishers. 1976 Miliband, Ralph 1969  The German Ideology. New York: International  Publishers.  The State in Capitalist Society. New York: Basic Books.  Mills, Charles Wright 1956 The Power Elite. New York: Oxford University Press. 1959  The Sociological  Imagination.  New York: Oxford University Press. Morrow, A . M . M . 1986 "The measurement of inflation experienced by the poor, 1970-80. "Canadian Public Policy, XII:1.  / 117 Moscovitch, Allan and Glenn Drover 1981 Inequality: Essays on the Political Economy of social welfare. Toronto: University of Toronto Press. Motor Vehicle Manufacturers Association of U . S . Inc. 1986 World Motor Vehicle Data. M V M A . Oja, Gail 1979  1987 Osberg, Lars 1981  1984 Parkin, Frank 1982 Porter, John 1961  Inequality of the Wealth Distribution in Canada, 1970 and 1977. Ottawa: Economic Council of Canada. Changes in the Distribution of Wealth in Canada Ottawa: Statistics Canada.  1970-84.  Economic Inequality in Canada. Toronto: Butterworths. Economic Inequality in the United States. New York: Armonk. Max Weber. New York: Tavistock Publications. "The economic elite and the social structure in Canada." In Bernard R. Blishen, Frank E . Jones. Kaspar D. Naegele, and John 'Porter, eds. Canadian Society. The Free Press of Glencoe, Inc.  1965  The Vertical Mosaic: An Analysis of Social Class and Power in Canada. Toronto: University of Toronto Press.  1979  The Measure of Canadian Society: Education, Opportunity. Toronto: Gage Pub.  Poulantzas, Nicos 1978 Rashid, Abdul 1977  1986  Classes in Contemporary Capitalism. London: Verso Edition.  Equality and  Trans. David Fernbach.  Wealth of Families with Working Wives. Ottawa: Statistics Canada. Characteristics of High Income Families, Ottawa: Statistics Canada.  1980  / 118 Roberts, D. G. 1985  "Food prices and the distribution of income." Western Economic Review, vol. 4, no. 1.  Shorrocks, A and E Marlin 1982 "Inflation and low incomes." Canadian Smith, M . R. 1982 Sobeco-Chapman 1986  Public Policy, VIII:3.  "Accounting for inflation in Britain." The British Journal of Sociology, vol. 33, no. 3. Compensation, Inc. Remuneration of Chief Executives in Canada,  1986.  TSE. 1984,86  Tucker, Robert C. 1978  Canadian Shareowner: Their Profile and Attitude. Toronto: The Toronto Stock Exchange. The Marx-Engels Reader (second edition). New York: W. W. Norton & Company, Inc.  Vaillancourt, Francois. 1985 Income Distribution and Economic Security in Toronto: University of Toronto Press. Weber, Max. 1958  1922  The Protestant Ethic and the Spirit of New York: Charles Scribner's Sons.  Canada.  Capitalism.  Economy and Society, vol. 1-3. New York: Bedminster  Westergaard, John and Henrietta Resler 1975 Class in Capitalist Society. London: Heinemann. Wright, Erik Olin 1983  Class, Crisis and the State. London: Verso Edition.  Press.  


Citation Scheme:


Citations by CSL (citeproc-js)

Usage Statistics



Customize your widget with the following options, then copy and paste the code below into the HTML of your page to embed this item in your website.
                            <div id="ubcOpenCollectionsWidgetDisplay">
                            <script id="ubcOpenCollectionsWidget"
                            async >
IIIF logo Our image viewer uses the IIIF 2.0 standard. To load this item in other compatible viewers, use this url:


Related Items