Examine the Effects of Income Inequality in Canada: Economic Aspects (Essay Sample)

Economics
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Examine the Effects of Income Inequality in Canada: Economic Aspects
In the article by Linda McQuaig, it is evident that, whereas individuals expected a decline in inequality as the rich grew richer, the opposite was realized as the gap between the rich and the poor kept widening. The initial belief was that the more a section of the population became richer, the more some of their wealth would trickle down to the rest of the society, but disappointingly, the low and middle-class workers had to work even harder o sustain the lives of the rich people in the Canadian society (McQuaig, 2010, p. 1). Over the past three decades, evidence has consistently demonstrated that the economic states of the rich have intensified, with hardly any transfer of wealth reaching the lower echelons of the economic social classes, which has contributed to Canada being an extremely unequal society. This paper analyzes this i detail.
Empirical evidence has demonstrated time and again that whereas inequality cannot be avoided, a greater manifestation of the phenomenon could have an adverse impact on an extensive array of social, economic, and health issues, as well as undercutting democracy. According to Sarlo (2009, p. 122), when wealth is highly concentrated in the possession of the small global elite, the result is that a majority of the population’s needs, including human rights, are typically ignored. In a popular article penned in 2011 by Joseph Stiglitz, an economics Nobel Prize-winner, there was a warning that Canada’s economic policies were overly dominated by the richest one percent, implying that a persistence of the trend could mean a decline of the rest of the society’s worth in terms of economic standing (Brennan & Stanford 2013, p. 1). The difference in personal incomes between the richest one percent and the rest of the population has grown tremendously over the past few years, making Canada a very unequal society as adjudged by economic status of the residents.
For the richer class of citizens to grow even richer, the middle-class families have been compelled to work even harder than their parents to maintain their standards of living, usually having to depend on more than two jobs at a time. In contrast, the one percent individuals at the apex of the economic hierarchy have nearly doubled their share of the national income over the past three decades by 6.1 percent, with 0.01 percent of the richest earning an average of &3.8 million every year, which is more than a quadruple of their national income share (McQuaig 2010, p. 7). This comes about as a paradox; whereas it was expected that a nation such as Canada would use sound economic policies to ensure equality regarding the incomes of its citizenry, the gap continues widening. This significant up flow of income has been invisible to the public, with evidence showing that the less privileged societies being characterized by higher infant mortality rates, more violence, disease, diminished life expectancies, more mental health issues, and less social cohesion. Evidence has also linked the huge economic inequality to serious economic challenges (Sarlo 2009, p. 6). The degree of inequality attained in 2008 corresponded to that witnessed in 1929, which implied that large concentrations of income at the apex created a dynamic contributing to reckless financial speculation and stock exchange crashes....