Thank you, Mr. Chairman. And thank you for the invitation to present before the committee today on an important issue.
I just want to touch on four aspects of the paper for which I was called before the committee. My paper dealt with nine issues, but due to the time limitations I'll deal with those four.
The first is that income inequality is indeed an important issue that we should be concerned with. Unfortunately, more often than not, I believe, it's grossly oversimplified, and by grossly oversimplifying it we risk solutions that are detached in varying degrees from the real underlying problems.
Secondly, we really need to understand some of the measurement problems and challenges we have with respect to measuring income over time. Related to that is an issue that's overlooked all too often, which is a definitional issue. Depending on how we define the income we want to measure—if it's pre-tax or post-tax, whether we adjust for household size over time, or, as my colleague from MEI has mentioned, whether we look at consumption versus income—we can get very different results with respect to measuring inequality. They're all correct, and this is the important point: all of those measures are correct, but they define “income” or “inequality” quite differently. So we have to understand the role of those differences.
I would certainly point the committee to an important paper by Burkhauser, in the United States, on this very issue. In Canada, for example, depending on how you measure, you can go from a decile measure of inequality from 6.5 all the way up to almost 14, which is a range of more than 100% in the difference between decile inequality. So as I say, I think we have to be aware of these definitional roles when we talk about inequality.
Thirdly, there's mobility. I fundamentally don't believe we can talk about or understand inequality without talking about mobility. Again, my colleague from MEI and my colleague from Fraser will speak about this.
Then finally, Mr. Chairman and members of the committee, I think unfortunately too often we conflate the discussion of low income with inequality. I think some of the solutions raised with respect to inequality fundamentally miss the issues with respect to low income, and more particularly those Canadians who get stuck in low income. From a series of Statistics Canada reports we know that there are essentially three groups that look like they get stuck in low income over time. Those are single parents, individuals who fail to complete high school, and Canadians who, unfortunately, have drug and alcohol abuse problems. It strikes me that some of the solutions we talk about in a very narrow sense when we think about inequality really miss the nuances of these three groups and how we could, from a social policy perspective and an economic perspective, more directly deal with the underlying problems of these three groups that get stuck in low income, which to me is a much more important issue than the general issue of income inequality.
With that, Mr. Chairman, I'll cede the chair, so to speak, but those are the four issues I wanted to deal with in terms of my study.
Thank you.