Monday, July 15, 2024

Has Canada become the land of extreme inequality?

Has Canada become the land of extreme inequality?


A whopping 38 per cent now see Canada with the most extreme level of inequality, a 19 percentage point increase in five years

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By Scott Schieman, Jiarui Liang and Alexander Wilson

A small elite at the top, very few people in the middle and a great mass of people at the bottom.

That’s what a staggering share of the population thinks Canadian society looks like these days.

From 2019 to 2024, we’ve tracked perceptions of inequality in a series of annual national surveys. With the help of the Angus Reid Group, we’ve amassed data from more than 20,000 Canadians in our University of Toronto Canadian Quality of Work and Economic Life Study.

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To measure perceived inequality, we followed an approach that researchers have used for decades in the International Social Survey Programme’s Social Inequality Module. It displays images and descriptions of five types of societies that reflect different levels of inequality and asks respondents: “Which type of society is Canada today — which diagram comes closest?”

Type A signifies the most extreme level of inequality: a small elite at the top, a few people in the middle and a great mass at the bottom. From there, the depictions of inequality become less severe. For example, Type C resembles a pyramid, with fewer people at the bottom. Unsurprisingly, most people prefer Type D, a society with most people in the middle.

Last year, we published our discovery of a spike in perceptions of extreme inequality. In 2019, we found that 19 per cent thought Canada most resembled Type A; by 2023, 32 per cent believed it did. And that trajectory continued.

In our May survey, a whopping 38 per cent now see Canada as Type A. That’s a 19 percentage point increase in five years.

It’s rare to detect that much change in perceptions over such a short period. But when we parsed the data, inspired by trends from our neighbours to the south, we found even starker shifts.

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As the Joe Biden-Donald Trump rematch unfolds, we’ve been hearing a lot about how perceptions of the economy differ by political affiliation. We wondered if Canada exhibits a similar dynamic.

Starting with perceptions of inequality, we found striking differences across political orientations. Back in 2019, Conservative and Liberal voters shared identical views: in both groups, 17 per cent said Canada had extreme inequality. Now, 41 per cent of Conservative voters and 31 per cent of Liberal voters say Canada resembles Type A. NDP voters have typically been the group to characterize Canada as having extreme levels of inequality, at least until now.

The 14 percentage point increase among Liberal and NDP voters since 2019 is astonishing, but that pales in comparison to the unprecedented 24-point increase among Conservative voters.

So, what’s going on? A main culprit involves the rising cost of living. To measure Canadians’ perceptions, we asked: “How has your experience of the cost of living changed during the past few years?”

We found that the overall share of respondents who said their experience became “much worse” jumped from 28 per cent in 2019 to 49 per cent in 2023 and then stabilized at 50 per cent in 2024.

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Again, however, we observe a divergence by political orientation. Perceptions of a severely worsening cost of living spiked for Liberal and NDP voters between 2019 and 2023 and levelled off in 2024. But among Conservative voters, it continued to rise another six points from 2023.

In 2023, following the United States Federal Reserve’s 2022 Survey of Household Economics and Decisionmaking, we started tracking perceptions of the economy using its question: “In this country, how would you rate economic conditions today—poor, only fair, good or excellent?”

Over the past year, we found a significant drop in the share of Liberal and NDP voters who describe Canada’s economy as “poor.” By contrast, Conservative voters — who already held a much more negative view of the economy in 2023 — soured even further.

The perceptions of extreme inequality, rising costs of living and a poor economy represent a politically lethal bundle of sentiments, but the elements are volatile.

On one hand, perceived inequality continues to rise among Liberal and NDP voters, even though their negativity about the cost of living and a poor economy appears to be stabilizing (albeit at high levels). On the other hand, Conservative voters exhibit a more unified and intensifying gloom on all three elements.

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Setting aside thorny political cleavages, collective pessimism about inequality will likely continue to intensify because of the psychological scars associated with the sharp rise in the cost of living. Moreover, since we started tracking it, almost no one — regardless of political affiliation — has reported an improving cost of living. So, when people say the cost of living has “stayed the same” in recent years, for many, that translates as: “stayed bad.”

The same isn’t good enough anymore. Staying the same as last year won’t feel better if you were already under water last year. For perceptions of inequality to soften, Canadians would have to start feeling significantly better about the cost of living.

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It will take a lot to turn that ship around. But our data show that even if it does manage to turn, experiencing the water as smooth or choppy will likely depend on which political ship one is on — and who the captain is.

Scott Schieman is Canada Research chair and a professor of sociology at the University of Toronto. Jiarui Liang is a graduate student in sociology at the University of Toronto. Alexander Wilson is a graduate student in sociology at the University of Toronto.

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