Income Inequality in Canada

Poverty is defined as a state or a condition in which a person or a community lacks the financial resources and essentials to enjoy a minimum standard of life and well-being that is considered acceptable to the society. Poverty is a growing issue all over the world and also in developed countries like Canada. Poverty does not only reside in developing nations, but also affects over three million Canadians, which includes about six hundred thousand children. One major factor, influencing poverty in Canada is the wide gap between the income earned by the rich and the income earned by the poor in the society. In this report, I would be outlining the causes and possible solutions of the income inequality in Canada.

According to the Organization for Economic Cooperation and Development, Canada is among the worst countries in the developed world in terms of the widening income gap between top earners and others in society. Income inequality is on the rise in most developed economies, but the trend has particularly taken hold in the United States and Canada. The top one percent of Canadian pre-tax income earners occupy 37 percent of the overall income growth between 1981 and 2012, and in present times, it shallows up 12.2 percent of the country’s income pie. With the one per centers occupying 12.2 percent of the income pie, Canada ranks only behind the United States (20 percent), Great Britain (12.9 per cent), and Germany (12.7 per cent) in terms of income disparity among the 18 relatively rich countries compared.

So why are the rich doing disproportionately better than everyone else? The report highlights three possible causes of income inequality in Canada and also other countries in the world. The first cause is that free trade is pushing up the wages of skilled workers, together with technological progress, making many low-skill jobs no longer available to the population. Another reason could be that rich people are marrying rich people, thus significantly...