The ‘1 percent’ and the ‘99 percent’ have become familiar vocabularies in the news, economics, and politics these days. The notorious economic inequality in the United States has been brought to the center of attention of many, especially after the 2008 financial crisis. It would not be alarmist to describe the current global state of inequality as detrimental. With factors such as social inequality, skill-based technological change, and lucrative financial activities adding to its severity, income inequality in the United States and the world has steadily increased in the past few decades: the proportion of national income directed to upper class households has soared.
The situation in the supposedly more peaceful neighbor of the United States, Canada, is not much different. Over the past few decades, the gap between the richest and poorest has widened significantly. Comparing the tangibles through the Gini Coefficient, Canada’s Gini is estimated to be 0.32 – less than the 0.39 of the United States, but far greater than the 0.25 of some Scandinavian countries. Today, in Canada, the richest 20% own nearly 70% of the country’s wealth, and the top 10% hold about 60% of all financial assets. Meanwhile, the poorest Canadians are getting less and less share of the national income.
Discussion of income and wealth inequality is no longer the angry cry of the so-called 99 percent nor do they call for justice and morality. With trickle-down economics (a theory that suggests the rich getting richer stimulates economic growth, thus benefiting the rest) proven invalid, such widening socioeconomic imbalance in many parts of the world will perhaps become the “new global warming,” as put by Charles M. Blow in the New York Times.
By: Sol Lee