This is consistent with findings in the United States. These days even multimillionaires get most of their income in the form of paid compensation for their labor. If the quintessential high-income American circa was an industrial baron who owned factories, his counterpart a hundred years later is a top executive, lavishly rewarded for his labors with bonuses and stock options. Even at the very top, the highest 0. Why is this happening in Canada and many other developed countries?
The causes tend to fall into two broad categories: market forces and institutional forces. Market forces , particularly skill-biased technical change and increased globalization, are creating a rising demand for highly skilled labour. As Edward Lazear, chairman of the U. Not all researchers agree that skill-biased technical change SBTC and globalization are at the root of all or even most of the rising inequality.
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- Introduction, findings, and conclusions.
- Associated Data.
An alternative explanation, put forward by Krugman and others, is that the increase in inequality can be attributed to institutional forces , like declines in unionization rates, stagnating minimum wage rates, deregulation, and national policies that favour the wealthy. In Canada, Yalnizyan notes that falling top marginal tax rates are part of the explanation for the rise of the richest 1 per cent of the population. Not necessarily. It is possible for the relative gap between the rich and poor to widen, even while all Canadians see their absolute income levels rise.
This is precisely what has happened in Canada.
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The average income level of the poorest group of people in Canada—after taxes and transfers and after adjusting for inflation—rose over the time period for which we have data—but only marginally. The poor did get notably poorer in two periods. The economy bounced back quickly from that recession, however, and income levels recovered. This was not the case for the —93 recession, the effects of which lingered for most of the decade.
Between and , real average incomes among the poorest group fell by an average of 2. This decline was due largely to recession effects on earnings, but also to the fact that average transfers from governments fell over that period. While the poor did not get poorer according to absolute real income levels, they did get poorer in a relative sense.
Thus, while the poor are minimally better off in an absolute sense, they are significantly worse off in a relative sense. The answer to this question depends on how you define a person with low income. Low income measure: The LIM is defined as half the median family income. A person whose income is below that level is said to be in low income. The LIM is adjusted for family size. Low income cut-off: The LICO is the income level below which a family would devote at least 20 percentage points more of their income on food, clothing, and shelter than an average family would.
People are said to be in the low-income group if their income falls below this threshold. The threshold varies by family size and community size, as well as if income is calculated before or after taxes.
Inequality Explained: The hidden gaps in Canada’s education system
Market basket measure: The MBM is a measure of the disposable income a family would need to be able to purchase a basket of goods that includes food, clothing, shelter, transportation, and other basic needs. The dollar value of the MBM varies by family size and composition, as well as community size and location. MBM data are available since only. The three measures produce different results. In , according to each measure, the following numbers of Canadians were living in low income:. The chart shows how the three measures also produce different results over time.
Who's in the bottom 10 percent?
Using the LICO measure results in a decreasing share of people in low income from to , followed by a slight upturn in and The LIM measure results in a share of people in low income that has increased since There are pros and cons to each measure. Developed nations like Canada usually use relative measures. Another common criticism is that a relative measure would never show poverty as being eradicated unless a country had a completely flat income distribution.
Supporters of a relative measure argue that it takes into account the critical issue of social exclusion. To participate fully in society, individuals need a level of resources that is not too far below the norm in that community.
Income Inequality Essay
Falling markedly behind the community average means effective exclusion from the normal life of society. Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or at least widely encouraged, or approved, in the societies to which they belong. Their resources are so seriously below those commanded by the average individual or family that they are, in effect, excluded from ordinary living patterns, customs and activities.
Evidence from the World Values Survey tends to support a relative measure. Researchers Richard Ball and Kateryna Chernova found that changes in relative income had a much larger impact on happiness than did changes in absolute income. Absolute measures are commonly used in developing countries to signify the minimum income needed for survival.
But a relative measure, LIM, is used most frequently by developed countries to compare international results. The MBM measure, however, is useful for comparing low-income rates among provinces and cities, since the threshold varies not only by family size and composition but also by community size and geographic location. Statistics Canada uses the MBM to compare provinces. Obvious income differences exist among the provinces, as well as among cities.
View the most recent version. Archived information is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please "contact-us" to request a format other than those available. According to the Census, Aboriginal people comprised 3. On average, the Aboriginal population is considerably younger than the non-Aboriginal population. Figure 1 Age distribution of Aboriginal identity and non-Aboriginal identity populations, Canada, Despite being a younger population, the health and well-being of Aboriginal people in Canada is generally poorer than that of non-Aboriginal Canadians.
For example, in the life expectancy of those living in Inuit-inhabited regions of the country was more than 12 years lower than that for the Canadian population as a whole, 3 and those reporting Registered Indian status had significantly higher mortality rates than those who did not.
Chapter Education – Introduction to Sociology – 1st Canadian Edition
In addition to various health inequalities, there are also significant inequalities in terms of socio-economic resources and conditions between Aboriginal and non-Aboriginal people in Canada. There is a large literature linking poorer socio-economic conditions with poorer health outcomes.
Conversely, health disparities may persist even in the absence of socio-economic differences between Aboriginal and non-Aboriginal people. In general, Aboriginal people were less likely to report being in optimal health than non-Aboriginal people. Conversely, this proportion was significantly lower among Inuit adults Table 1. Conversely, Inuit adults were generally less or similarly likely to be diagnosed with a particular condition as compared to non-Aboriginal adults.
The exceptions were experiencing the effects of a stroke and stomach or intestinal ulcers, where the prevalence of these conditions was significantly higher for Inuit adults. See Appendix Table A for crude and age-sex adjusted prevalence rates of self-reported chronic conditions. It should be noted that the questions regarding the presence of chronic conditions as asked in both the Canadian Community Health Survey CCHS and the Aboriginal Peoples Survey APS specify that the individual be diagnosed with a particular condition by a doctor or health professional. As such, these findings do not necessarily indicate that these individuals did not have these conditions; rather, they have not received a specific diagnosis from a doctor or health professional.
Although not the most commonly reported chronic condition, diabetes was significantly more prevalent among First Nations 9. Conversely, diabetes was significantly less prevalent among Inuit adults 4. Diabetes is a risk factor for reductions in functional health, while it also increases the risk of premature death. Complications due to diabetes may also result in blindness, amputation, ischemic heart disease, stroke and kidney failure. Diabetes is often broken down into types. Type 1 diabetes, sometimes referred to as insulin-dependent diabetes or juvenile diabetes, is a condition when the body produces little to no insulin and is usually diagnosed in children or young adults.
Type 2 diabetes, sometimes referred to as non-insulin-dependent diabetes or adult-onset diabetes, is the most common form of the condition and occurs when the body cannot properly use the insulin it produces or cannot produce sufficient insulin.
Type 2 diabetes is usually diagnosed in adulthood, although it can occur during childhood, and is generally treated through diet and exercise. The APS included information on the type of diabetes with which individuals were diagnosed, whereas the CCHS , for the most part, did not. Among those with diabetes, Aboriginal adults were diagnosed at significantly younger ages than were non-Aboriginal adults Table 2.
Furthermore, nearly a third of First Nations adults living off-reserve were diagnosed between the ages of 20 and Conversely, whereas nearly a third The majority of individuals reported using some other form of medication to treat their diabetes, although the proportions were significantly higher for First Nations Palgrave Macmillan. Canadian Global Affairs Institute. Archived from the original on December 11, Retrieved December 10, The World Factbook. May 16, Archived from the original on July 11, Archived from the original on March 20, Trafford Publishing.
Royal Canadian Geographical Society. The Guardian. Retrieved July 2, Archived from the original on March 7, Retrieved March 4, International Boundary Commission. Archived from the original on August 1, Retrieved May 17, Retrieved June 27, Natural Resources Canada. The surface climates of Canada. December 5, Archived from the original on December 5, Biogeoscience Institute at the University of Calgary. Archived from the original on September 23, Geological Survey of Canada, Open File Archived from the original on January 5, Retrieved January 18, Canadian Climate Normals — Environment Canada.
September 25, Archived from the original on May 18, Retrieved May 12, Retrieved November 29, Canadian Social Policy: Issues and Perspectives.
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