Income Inequality: The Canadian Story, Edited by David A. Green, W. Craig Riddell and France St.-Hillaire (2016) Montreal: Institute for Research on Public Policy/Institut de recherche en politiques publiques (IRPP), 558 pages. ISBN: 978-0886-4532-99

Inequality has been a major theme in debates over economic performance and policy in this decade. The Occupy Wall Street movement focussed attention on the “top one percent” of wealthy persons, beginning in 2011. Three years later, Capitalism in the Twenty-First Century, by the French economist Thomas Piketty, appeared in English. This serious book generated discussion of the transnational trend to greater income inequality in academic circles. The Organization for Economic Cooperation and Development (OECD) identified inequality as a serious economic and political problem in 2015. Political events, including the success of the “Brexit” referendum in the United Kingdom, the election of Donald Trump in the United States and the “Arab Spring,” all involved popular protests against disparities of income and wealth. Canada has not experienced the dramatic events resulting from inequality elsewhere. Preliminary research indicated that income disparities in this country were less pronounced than in the United States. Nevertheless, Canada has been affected by powerful economic trends occurring in other capitalist states. The 2015 federal election focussed on the declining condition of the “middle class.” Documents in the Paradise Papers, leaked from a major law firm in a tax haven, revealed that some wealthy Canadian families had large sums in trusts apparently out of the reach of domestic taxation authorities. As this review is written, debates are underway in three provinces about the efficacy of minimum wage legislation as a tool to reduce income inequality. The editors of this volume, all faculty members at the University of British Columbia, set out to answer three questions about income inequality in Canada: has income inequality increased in Canada; if inequality is an issue, what policy tools are available to offset this trend; and what other measures are available to redress some of the effects of inequality. The result of this inquiry is an impressive volume comprising a comprehensive overview of the contents and conclusions it offers, supported by 15 chapters covering the major elements of the inequality phenomenon in Canada. Over 25 authors and editors examine trends in inequality from many perspectives and analyze an array of policies that might affect changes in income distribution. The chapters on the extent of inequality in Canada provide a clear answer to the first question the volume addresses. Income inequality, measured in several ways, increased substantially between 1976 and 2011. The trend was relatively steady, allowing for variations due to labour market conditions. In particular, the bottom half of the income earners in the labour force have made little progress over this period. If this trend continues, prospects for the children of low-income earners are equally bleak. The consequences of growing inequality are numerous and negative: lower income growth, reduced work effort from the bottom of society and reduced effectiveness of government transfer programs. The second question—what policy measures are available to offset this trend—should interest the readers of this Journal especially. The editors depart from the precepts of neoclassical economics to embrace the concept of worker bargaining power as a factor in wage determination. Research summarized in this volume demonstrated the impact of wages in the oil and gas sector in the Western provinces on labour markets in other industries and regions. Students of wage determination in unionized sectors may find these conclusions unremarkable, but their robustness supports the “industrial relations” view of labour markets. An examination of labour’s share of national income with and without the greater gains of the top one percent led to the conclusion that workers’ bargaining power can extract rents from employers when conditions permit. Surprisingly, the authors find that minimum wage increases after 2005 have …