The rise of global capitalism and wealth inequality in Canada

¶ … capitalistic economy surfaced right after the era of feudalism ended. The capitalistic economy system favors a handful of wealthy private entities that control rest of the economy. These corporate actors utilize the resources and labor in their favor to create a monopoly of their own. The profits are multiplied by these corporations and the government acts responsible for ensuring taxes payments and in return the masses are provided social justice. In the first quarter of 20th century when industrial revolution was taking place, capitalism seemed like a great idea as formulation of unions and governments helped the under privileged.

Originally the idea of capitalistic economy was supposed to keep check and balances on the supply and demand functions. The scenario should have been in the best interest of the society as corporations were compelled to share profits with the overall society. But after World War 2 as the industrialization period of 20th century came to a halt and globalized free markets across the world emerged, corporations broke from the shackles of sharing profits with lower strata of society as they could find cost effective solutions in different parts of the world.

Unfortunately, the economic system that now predominates in most parts of the world -- unfettered global capitalism -- promotes, defends, and even extols an obscenely unequal distribution of wealth. Its three basic principles are greed, individualism, and competition -- all of which militate against economic and social justice. (Ed Finn, 2003)

This system essentially makes a few hundred billionaires wealthier than rest 99% of the 6.8 billion population of the world. Across the globe billions face issues like contaminated food and water, illiteracy, lack of shelter, starvation, grave illnesses and in general poverty just because of these few hundred billionaires.

It is in this background that the economic situation of Canada will be considered. The population of Canada can generally be divided into 4 broad categories, which have been discussed below under their respective headings. These include,

1. The Upper Class

Approximately only 3-5% of Canadians belong to the upper class. Their social position is mostly because of their ancestry and the wealth they acquired from their ancestors. Many families belonging to the class have British backgrounds. Children of this class study in private institutions and individual exercise strong positions in employment.

Upper -- Upper class: The Canadians hailing from wealthy backgrounds that have 'old money' comprises only 1% of population.

Lower -- Upper Class: The Canadians who are not ancestral riches and have actually worked to earn more than rest of the masses make up 2-4% of the population.

3. The Working Class

One third of Canadian population consists of the working class. They work in less skilled category at lesser pay scales and cannot be considered wealthy by any means.

4. The Lower Class

The particular class which makes up about 20% of Canadian population is working poor jobs or labeled lower class poor. Basic necessaries such as food, shelter and clothing are barely covered by the money they make and are dependent upon welfare payments. Not much can change for the children of this class as they will have to live the desolate lives that their parents spent in the slums.

Discussion Question: What do you notice about the distribution of income in Canada?

According to the string test, there are 10 broad levels of income in Canada. The highest income level is taken up by the richest that are fewer in number while the poorest are amongst 10% of the total population. The lowest strata of the society, the poor class, earn about 1% of the total share of income. While there is a drastic gap between the poorest and 2nd poorest, this class makes up about 8% of total income earned in Canada.

There is a consistent increase in the income levels between 3rd poorest and middle level groups. A consistent increment of 5-6% can be observed till the middle 5th and 6th decile income groups. From that point onwards the income levels increase at a greater rate.

The richer income levels increase at a greater rate: Only the 4th richest income group has an increase in income of 6%, the other following income levels boost at a rapid rate. 3rd richest earn 8% more than the previous one and 2nd richest have a 10% better income level then the 3rd richest Canadians. The richest class in Canada takes up to 42% of the total income distributed in all of Canada, which goes to show the massive gap between the highest and the 2nd highest income levels in the county.