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OECD’s dire warning for Canada: income inequality will get a lot worse

The Organisation for Economic Co-operation and Development has some bad news for Canada: income inequality has been on the rise since the mid-1980s and is projected to get a lot worse over the next 50 years. The OECD’s outlook is part of its new predictions for the world economy until 2060. “These are that growth will slow […]

The Organisation for Economic Co-operation and Development has some bad news for Canada: income inequality has been on the rise since the mid-1980s and is projected to get a lot worse over the next 50 years.

The OECD’s outlook is part of its new predictions for the world economy until 2060.

“These are that growth will slow to around two-thirds its current rate; that inequality will increase massively; and that there is a big risk that climate change will make things worse,” writes Paul Mason, an economics editor in England, summing up the overall predictions of the Paris-based think tank representing the world’s most advanced countries.

Canada isn’t sitting so pretty in this scenario.

1. The OECD report says income inequality increased in Canada from the mid-1980s to the late 2000s under successive Liberal and Conservative governments:

Figure 4

 

2. OECD projects gross earnings inequality in Canada will worsen between 2010 and 2060, placing Canada behind only the United States and Hungary among 21 charted OECD countries:

Chart B

 

3. OECD says a decrease in earnings inequality can occur in Canada through 2060 if employment protection, union coverage, tax wedges and product market regulation coverage are enhanced:

Figure 17

Photo: dolmansaxlil. Used under a Creative Commons BY-NC-SA 2.0 licence.

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