Essay Example on Wealth Inequality in Canada: The Growing Divide

Introduction

The wealth inequality in Canada is a by-product of long-term income inequality between the members of the top affluent families and the common Canadian. Members of the top affluent families have an opportunity to make more money and save more hence increase their net worth faster than the common Canadians. Wealth is accumulated over time, and the wealth inequality in Canada has been rising over generations (Özgür, 2018). Today, almost all rich individuals in the top affluent families were born wealthy, and their families control vast wealth. Taking the example of Westons and Saputons, the members of these wealthy families are top countries CEOs; hence despite having been born in wealthy families, they have the opportunity to earn more to grow their wealth at a fast rate compared to a Canadian born in an average family.

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The genesis of wealth inequality in Canada can be traced to the early 1900 when few Canadians started taking control of the entire society. First, there were over two million immigrants who arrived in Canada in the period between 1901 and 1911and most were poor and had come to search for jobs in the railway construction projects in Canada (Christopher, 2017). Here the few Canadians with influence earned well compared to the immigrants hence beginning the wealth inequality between the influential Canadian families and the poor and immigrants’ families. By 1930, some Canadian individuals had accumulated individual wealth and could control great wealth as some poor Canadians, and specifically, those from the immigrants' families lived a disparate life stuck in the same job for their lifetime. It is during the beginning of the 1900s where the difference in wealth distribution between the rich and the poor took a wide gap.

In the period between 1930 and 1980, the level of wealth inequality sharply increases with the rich or members of influential and wealthy families accumulating more wealth compared to poor individuals or families. Statistics indicate that during the period between 1930 and 1980, the total national income that went to the rich 0.1 percent of the total Canadian population reduced significantly, the few rich families increased in their wealthy levels to command great influence in many sectors of the Canadian economy (Özgür, 2018). It is also during this period when the concept of dynastic families originated with the few affluent families opting to operate as a society. Investments and businesses owned and managed by the affluent families increased in values, and as the initiators of the investments and businesses die, their families inherited the fortunes and grew the wealth further. Members of the few wealthy families gained influence and took positions in government positions and, in the corporate world hence had the opportunity to grow their family wealth.

In the late 1900's most of the investments of the few affluent families had grown to maturity as well as most of the members from the affluent families controlled most parts of the Canadian economy. During this period, a reversed trend to what happened between 1930 and 1980 was noted. The total national income that went to 0.1 percent of the Canadian population who are the rich in the society took an upward trend (Christopher, 2017). That is, the few rich families in Canada were a beneficiary of a relatively high national income per year. The access to a high total national income by the rich families widened presented the few rich families an opportunity to grow in wealth compared to the common Canadian from an average family. It is estimated that by the year 2000, 0.1 percent of the Canadian population composed of rich families enjoyed about 3 percent of the total national income.

Early 2000 was a continuation of what was noted in the late 1900s. The difference in income levels between the poor and the wealth led to a wide gap in the wealthy distribution between the wealthy 0.1 percent of the Canadian population and the rest of the population. Using the Gini coefficient as a measure of income inequality between the wealthy 0.1 percent of the population and the rest of the Canadian population, the Gini score had risen to over 0.5 by the year 2010. To explain the Gini Coefficient is that it ranges from 0 as the lowest indicating perfect equality, and the highest is 1 indicating perfect inequality (Özgür, 2018). With a Gini score of over 0.5 in the early 2000's, it is an indication that the wealth distribution between the common Canadian and the wealthy 0.1 percent of the population is too wide.

Will the COVID Crisis Affect that Trend?

With the rapid global spread of the Coronavirus, governments' and individuals' life shall be impacted in Canada and globally. Trade and employment shall be the hardest-hit areas leading to a reduced national income (Yeo, 2018). Many employers in Canada implemented what they refer to as temporary layoffs leading to over a half a million jobs lost. With the government directives to impose lockdowns and direct employees to work from home, companies have had no option but to reduce their operations and work with the minimal workforce. The concept of working from home has not realized better outcomes, and there has been reduced labor participation from the work from home concept. With less labor participation in the entire economy, the most affected are the low-income earners who are also high taxpayers. Thus, as the poor lose their source of income, the wealthy few will still remain wealthy, and the wealth distribution shall even widen further with the wealthy 0.1 of the population being too high in the scale and the many poor remain constrained with fewer resources.

Conclusion

In conclusion, COVID-19 shall widen the wealth distribution gap between the poor and the wealthy 0.1 percent of the Canadian population since the poor suffer income constraints out of the unemployment while the wealthy 0.1 percent of the Canadian population control their wealth, businesses and participate in the decision making for how to revive the Canadian economy back to normalcy. The COVID-19 shall deepen the already existing wealth inequality as, despite high consumption and low income among all Canadians, the wealthy 0.1 percent of the Canadian population shall be able to sustain themselves for long compared to the common Canadians hence the wealthy few shall remain wealthy while the poor shall constrain their accumulated wealth or resources.

References

Christopher, A. S. (2017). Understanding Wealth Inequality in Canada. Fraser Institute. 4:1-60. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwi62fyto-zpAhVECxoKHQniAsoQFjAAegQIARAB&url=https%3A%2F%2Fwww.fraserinstitute.org%2Fsites%2Fdefault%2Ffiles%2Funderstanding-wealth-inequality-in-canada.pdf&usg=AOvVaw0jEsWHYwH5K4e_u50SUQd5

Özgür B. S. (2018). The poverty, growth and inequality in Canada, International Journal of Current Research. 10, (10), 74326-74332. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwi62fyto-zpAhVECxoKHQniAsoQFjACegQIBBAB&url=https%3A%2F%2Fwww.researchgate.net%2Fpublication%2F328580729_THE_POVERTY_GROWTH_AND_INEQUALITY_IN_CANADA&usg=AOvVaw0oNuwIwqm7uC6xIfu4dIyZ

Yeo, L. H. (2018). Impact of Covid-19 pandemic on Asia-Europe relations. Asia Europe Journal, 1. https://link.springer.com/content/pdf/10.1007/s10308-020-00575-2.pdf