Meanwhile, Inequality Is Rising

Paying Bills by Camera Eye Photography
Paying Bills by Anthony

Inequality in today’s society is often identified as one of the direct consequences of globalization. The gap between rich and poor in many countries around the world continues to widen, which often breeds resentment among the poorest and most vulnerable groups of people. The well known division between the 99 per cent and 1 per cent is a simplified interpretation of this complex problem, but growing inequality is now clear — even in Canada.

Research carried out by the Chair of Systems Design in Zurich reveals that 147 companies control 40 per cent of the world’s total wealth. It’s again globalization that plays a crucial role when a crisis strikes. If one of those companies gets into trouble, a chain reaction is provoked, and other companies go into distress almost simultaneously. It’s like pool: when one ball hits another, which may hit two or three more, each of which may dart off and push into still others. This kind of interconnection thus becomes the reason why the whole network of companies suddenly goes bankrupt.

Inequality in Canada

As far as income inequality is concerned, development in Canada is fundamentally similar to other countries. However, there still are countries such as Austria and Denmark whose levels of income per capita are comparable to those of Canada but whose rate of income inequality is considerably lower. The truth is that over the last twenty years, only the group of richest Canadians has increased its share of national income. Armine Yalnizyan, a senior economist with the Canadian Centre for Policy Alternatives, carried out research according to which “246,000 people whose average income was $405,000—took home almost a third of all growth in incomes from 1998 to 2007.” She also points out that the source of wealth possessed by the richest groups of the population has gradually changed. While in the past they relied mostly on unearned income from assets, today “the income of the richest 1 per cent is due mostly to the lavish sums they are paid for the work they do.”

Wallet by Timothy Boyd
Wallet by Timothy Boyd

Rising inequality has recently become one of the issues exploited by political parties on the left side of the political spectrum whose leaders stand for egalitarianism and equal opportunities for everyone. One of the solutions they propose is a higher tax rate for the wealthy, banks, and the biggest corporations. This seems to be well considered strategy to appeal to voters, but the question remains whether shifting money from one group to another will actually solve the whole problem. Moreover, what if the rich, put under pressure by such measures, finally decide to move their resources to foreign countries? According to Isabel Sawhill, a budget expert from the Brookings Institution, the solution lies somewhere else. As she puts it, “A combination of government policies and changes in behaviour that will improve education, reward work, and strengthen families while also maintaining a basic safety net for those at the bottom is needed.”

The growing disparity between rich and poor is one of the most daunting problems that national governments in many countries will have to face in the years to come. However, it’s debatable whether the authorities will finally find a solution to that problem other than discriminating against one group of people by another.

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One Response to Meanwhile, Inequality Is Rising

  1. construction Toronto says:

    Well Said and the fact is true, the point you raised about the widening relation between poor and rich will cannot be solved and it will increase day by day, which results in Inequality.

    Reply

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