Any sensible policy designed to address the concentration of income at the top of the Canadian income distribution over the past thirty years or so has to be based on a working model that explains how and why it happened in the first place. And we still don't have one. We still don't even have a good handle on the basic facts that this model should explain.
I think that one basic fact that such a model should explain is how the composition of the top earners group has evolved over time. So I'm going to present here some numbers from the Public Use Microdata Files for the censuses between 1981 and 2006.
There are severe limitations with what can be done with the PUMFs. The first challenge is top-coding: incomes above a certain threshold ($100,000 in the first few years, $200,000 later on) are truncated at the threshold. Happily, this threshold is below the 99th percentile, but I can't look at higher percentiles or retrieve average incomes. All I can get are the number of people in the top one per cent.
First up are occupations. The challenge here is that Statistics Canada changed its occupational classifications about a kazillion times between the 1981 and the 2006 censuses, so I was only able to track two categories that are important to what's going on in the one per cent: managment occupations and health professionals. I would have liked to track occupations such as lawyers and finance professionals, but I couldn't.
One of the stories we tell about the one per cent involves corporate executives: for one reason or another, managers have been able to increase their bargaining power and leverage higher salaries. But it turns out that the managers account for only about 35% of the top one per cent, and this share has remained fairly constant since 1981:
(The National Household Survey numbers are from here. Make of them what you will.)
If the surge in incomes at the top were due to increased salaries for executives, I would have expected that managers would have occupied an increasing share of the one per cent. That doesn't seem to have happened.
The other dimension where you can break down high earners is the industry where they work. I was able to track four important industries here:
Apart from the drop in the manufacturing sector, I can't pick out any particular trend. For example, if the surge in top incomes were due to an increasing 'financialisation' of the economy - in which finance professionals find themselves in a position to skim off a small fraction of ever-increasing transactions - then you'd expect that people in the FIRA sector would take up more place in the top one per cent. That hasn't happened, either: an increase from 10% to 12% is a week reed.
Based on a first rough pass with PUMF data, I think it is reasonable to conclude that the one per cent today more or less resembles what the one per cent looked like before the surge in top incomes. They just have higher salaries.