Social Inequality in Canada

Social Inequality in Canada
Student’s Name
Institutional Affiliation
Lecturer’s Name
Course Name and Number
Assignment Due Date
Social Inequality in Canada
For a long time, equality has existed in the world's economy, with economic growth benefiting mostly the rich. A recent report released by the World Economic Forum indicated that severe economic disparity is one of the most considerable economic risks. (Corak, 2013). Since the major financial crisis of 2008, the Organization for Economic Co-operation and Development (OECD) has stated that a country can only reduce inequality by stimulating economic growth (Little, 2016). According to the International Labour Organization (ILO) report on a current rise of inequality in developed countries, the income of high-income households expanded faster than the medium-and-low income households between 1990 and 2008 despite this period being of rapid economic growth and job creation (Little, 2016).
Canada is one of the developed countries with the strongest economic growth, but the unequal distribution of wealth and income. Since 1980, inequality has increased by around 19% for market income, according to the Gini Coefficient (Little, 2016). The Gini coefficient is a metric used to measure economic inequality. Due to the rise in inequality, the market income shared captured by 21% of the richest in Canada grew sharply to approximately 13.3% in 2010, from about 8% of all income in 1982 (Procyk, 2020). This research aims to investigate how social inequality operates within Canada’s economy using two examples: income inequality and the rising cost of living in Canada. The study further uses sociological analysis to discuss what can be done to reduce social inequality in the economy.
Income Inequality in Canada
Income inequality has increased partly due to globalization and changing technology, which has resulted in the structuring of the Canadian economy (Soylu, 2018). To some extent, it has grown due to pervasive economic trends, including recessions. In the past, government policies and Canadian institutions limited the rise of income inequality. Today, well-paying jobs have declined, unions have become weak, and the minimum wages have failed to keep pace with inflation (Procyk, 2020). The prevalent jobs are often low-paying service jobs and temporary jobs or short-term contracts that do not provide a secure position in the labor market.
Equally, measures such as redistributive transfers and progressive taxes that once compensated for skyrocketing of income inequality have been restructured to pay less for this growth. Programs like social assistance and employment insurance benefits have been weakened in a way that they provide little protection to the middle-and low-income employees (Corak, 2013). The increased wealth accumulation and the rising living cost in the form of real estate and other assets for high-income workers have further widened the gap between the rich and the poor in Canada.
Over the past decade, international policymakers such as the World Bank, United Nations, and OECD have established a near-unanimous consensus that rising inequality is a severe economic problem (Little, 2016). Undeniably, this is an issue that requires immediate response if a country is to ensure the sustainability of future economic growth. Canada is not strange to this problem. Several studies conducted in recent years have covered both the trends and primary causes of the increased rate of income inequality in a national context (Soylu, 2018). Most recently, concerns have been raised about the role of urbanization in the inequality debate.
Canada is one of the most urbanized countries in the developed world. More than 80% of the Canadians live in urban regions, with around 40% in just one of four metro areas: - Toronto, Vancouver, Montreal, and Calgary (Little, 2016). Between 2001 and 2016, the population growth in the country’s largest census metropolitan areas (CMAs) was over four times greater than in the rest of Canada (Soylu, 2018). Evidence shows that the national increase in income inequality is highly centered in these metro areas.
In the larger provinces like Ontario, Quebec, and British Columbia, the growing inequality in the largest explains nearly the rise in income inequality seen at the provincial level (Little, 2016). Pulling out these CMAs from Canada and recalculating inequality metrics gives rise to a surprisingly equal non-urban population. This does not mean that less-populated communities in Canada do not feel the impacts of inequality, but they feel that the growth in inequality is more common in urban regions (Corak, 2013)s.
Sociological research on social inequality in Canada demonstrated that the gap in income and wealth between the rich and the poor has been on the rise. In 1982, the average employee in the top 1% of incomes earned seven times more than the average worker in the other 99% (Corak, 2013). In 2020, the median income earner in the top 1% earns more than ten times (Little, 2016). Procyk (2020), in his research, found that while the median income for the top 1% of income earners has increased from approximately $285,000 to around $580,000 in 2020, those for the bottom 99% have only increased from about $40,000 to nearly $50,000.
Likewise, the average income of employees in the top 0.01% has tripled from roughly $2.3 million to about $7.8 million. In the early 1980s, the top 1% of employees accounted for almost 7% of all the incomes generated in Canada, while in 2020, they account for more than 10.6% of Canada's total income (Procyk, 2020). Despite the increase in the incomes for high-income earners, the incomes for middle and low-income earners remained flat for over three decades. On one hand, this discrepancy means that the rich are increasing their share of wealth at the expense of the poor. On the other hand, it implies that the poor are losing their share of wealth to the poor (Soylu, 2018). It is evident from these trends that the gap between the high-income earners and the low-income earners continue to rise. This is due to the huge differences in the rise of incomes between the top 1% earners and the bottom 99% earners. (Procyk, 2020)
Rising Cost of Living in Canada
In Canada today, many households are forced to pay for more goods and services out of pocket at high costs (Procyk, 2020). The transition from the use of institutional regulations and policies to more dependence on the market adjustments in the 1990s was highly responsible for putting more responsibility and cost on individuals (Little, 2016). Individuals must now pay for goods and services that were previously available from employers from the government. For instance, the coverage of the employee pension plan has declined in the past two decades. At the same time, costs for basic needs have been increasing. In both instances, high-income households can afford to pay for these goods and services. In contrast, low-and middle-income families may experience setbacks or stagnant mobility that can stimulate the existing income inequality (Little, ...