A laurel for The Globe and Mail

Canada's national business paper examines inequality in "The Wealth Paradox" series

Inequality is an issue not just for the United States, but also for our northern, and very similar, neighbor.

American journalists take note: The Globe and Mail, Canada’s national business newspaper, published a superb two-week series on the far-reaching consequences of inequality that is a font of insights and story ideas. For their work, the paper merits a CJR laurel.

The series, “The Wealth Paradox,” is the latest installment in a Globe and Mail effort dating to 2009 to tackle major issues shaping Canadian society. Past multi-part examinations include immigration and how it benefits Canada, issues raised by genomic science from curing cancer to profiteering off individual genetic information, and the quality of Canadian education.

The inequality project, which ran from Nov. 9 to 23, came not from editors at the top, but from the newsroom staff. The rank-and-file were asked in an internal email to propose serious, agenda-setting topics for the paper to focus on, Managing Editor Elena Cherney told me.

The project smartly included an interactive explainer—a primer with videos and the openings of major pieces from the series.

Among those pieces: Greg Keenan examined how the decline of unions increases inequality in a story headlined, “As unions lose power, Canada gets the blue-collar blues.” Using as its starting point a Canadian Pacific (CP) railroad worker who retired at age 56 with a $6,000 monthly pension—an annuity he earned because of the bargaining power of unionized workers—Keenan wrote about “one of the more radical restructuring plans any major Canadian company has tried in recent years.”

Keenan told how an American executive who once ran the other major Canadian railroad was planning to cut a quarter of the CP’s workforce and slash compensation to line workers. Then Keenan gave that plan context:

But the benefits of greater efficiency have not been evenly distributed. In manufacturing, forestry, mining, transportation and other sectors, globalization and increased efficiency led to the elimination of hundreds of thousands of high-paying unionized positions in Canada.

That drop in unionized jobs—and the resulting loss of blue-collar bargaining power—appears to be a major reason for the disquieting increase in inequality in Canada. About 18 per cent of private sector jobs are now unionized, compared to 21 per cent in 1997, and the proportion was declining even before then…

“It just took that final knockout punch of the Great Recession to tilt everything away from easy progression up the socio-economic ladder for new labour market entrants or for someone who had lost a job in a displaced industry,” says Rafael Gomez, an associate professor of employment relations at the University of Toronto.

“The relative decline in private sector unionization is the biggest institutional factor behind the rise in inequality.”

That without unions most workers have no bargaining power because they lack knowledge the employer has and need work to eat, and that this loss of economic power is the central factor in the stagnating-to-falling wages for a majority of Americans is seldom discussed in the United States. The idea that without unions, labor markets are not markets, as defined by the Supreme Court, doesn’t have much purchase in American newsrooms.

The Globe and Mail series also included a hard look—of course! —at how inequality is affecting Canada’s national sport, ice hockey. Reporter James Mirtle wrote a piece headlined, “The great offside: How Canadian hockey is becoming a game strictly for the rich.”

Mirtle explained how “various factors” including the rise in the cost of ice time and the increasing importance of “travel” teams

have conspired over the last 10 to 15 years to make minor hockey dramatically more expensive, pricing out many middle-class families. These days, more and more of the players that go on to play major junior, college and, ultimately, pro hockey are from wealthy backgrounds.

It’s a development that threatens the sport’s blue-collar roots, including the idea that the next Gordie Howe or Wayne Gretzky will come from backgrounds as modest as theirs were. Players of modest means in this generation must beat out peers who are often better trained and have spent many more hours on the ice, thanks to wealthy parents.

Columnist Konrad Yakabuski gave some historical context to the question of whether technology will mean more and better jobs in the future. He told readers (and reminded American journalists who may take up this core economic and social issue) of “a bombshell US study [that] found that almost 60 per cent of American jobs created earlier that decade were low-wage positions in the service sector.”

Yakabuski also gave this historical perspective in discussing what he writes is the somewhat mythical idea of a strong middle class in the Canadian past:

Globalization has deprived governments, businesses and workers of the near absolute control they once exerted over domestic economies. It has also enabled a lucky few to earn eye-popping (if not unseemly) incomes with the emergence of a global market for top talent. Combined with currently slow-growing salaries for the rest, the distribution of income has become more unequal in most developed countries. Restoring balance won’t be easy, as an aging population depresses consumption and economic growth, while emerging economies seek to move up the food chain by eating our lunch. But before we try to roll back the clock, as so many seem eager to do, we need to understand why we face these challenges in the first place, and why rising to them will make us all better off.

The paper came at these issues with what managing editor Cherney acknowledges are biases. “We also are very much a business paper with a business audience and mindful we are not trying to portray the rich as the enemy,” Cherney said. “We are pro competition and pro free market.”

Cherney also noted that Canadian inequality is more subtle than in America “because we have the great equalizers of education and healthcare spending” that in America are heavily influenced by localized wealth and private spending. Cherney’s point about the equalizing effects of universal education and healthcare goes to an important—and neglected—issue: the public benefits of taxes. As an important study that got almost no attention when it came out shows, taxes play a major role in the level of inequality in Canada and the US, both in how revenues are raised and how the money is spent.

American journalists would do their audiences a great service if they looked at the tremendous costs of American healthcare relative to other modern countries in terms of its effect on inequality—or most any of the other pressing issues examined in The Globe and Mail’s excellent “Wealth Paradox” series.

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David Cay Johnston covers fiscal and budget matters for CJR’s United States Project. He is a reporter with 46 years of experience, including 13 at The New York Times; a columnist for Tax Analysts; teaches tax and regulatory law at Syracuse University Law School; and is president of Investigative Reporters & Editors (IRE). Follow him on Twitter @DavidCayJ. Tags: , , , , , ,