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“These new statistics expose the grotesque and obscene failure of the global economic system. Despite all the fancy promises from our political elites, the rich are getting richer, and income inequality is growing exponentially. And what’s equally morally unconscionable is that our federal Liberal government is doing nothing to stop it.” — Larry Brown, NUPGE President
Ottawa (20 Nov. 2017) — Several recent studies report growing income inequality is concentrated among 1% of the population in Canada, the USA, and in countries around the world, leading one observer to describe the situation as “the peak of the second Gilded Age.”
Income inequality in Canada: the 1% get richer
According to a November 15 Statistics Canada survey on high-income trends, the highest-paid Canadians received a larger share of the country's total income in 2015 because corporate dividends helped boost their earnings.
The top 1 per cent of tax filers held 11.2 per cent of Canada’s total income in 2015, up from 10.3 per cent in 2014. That marked the first time in nearly a decade that the 1 percenters saw their proportion expand. The average total income of the top 1 per cent of tax filers rose 12.2 per cent to $529,600, including on average $102,300 from dividend income, up sharply from $66,700 in 2014. The median total income of all filers was $33,400.
According to Statistics Canada, to be in the top 1per cent, a tax filer must have earned a total income of at least $234,700. Just under 270,930 Canadians were in the top 1 per cent. To be in the top 5 per cent required a total income of $120,100, while to be in the top 10 per cent required $92,800.
The Statistics Canada survey showed that, across the country, more Canadians joined the ranks of high-income earners, and even though women are making some gains, men still represent 76.8 per cent of all 1 percenters.
Furthermore, while there has been 3.4 per cent wage growth among the bottom 50 per cent of tax filers, the biggest earning gains were made at the highest level of the income spectrum, and the share of income actually fell 1.2 per cent for tax filers from the 51st to 99th percentiles.
What explains income inequality in Canada? Dividends
According to the survey, dividends are “the most important factor behind the increase in top income share.” High-income tax filers typically receive a large share of the total dividends from Canadian corporations: from 1982 to 2015, the top 1 per cent% received, on average, about 40 per centof total dividend income from Canadian corporations. And since the late 1990s, dividends overtook interest and investment to become the second most important income source after employment income for the top 1 per cent.
Global inequality — ‘the second Gilded Age’
The Statistics Canada study was released at the same time that 3 other studies showed similar trends of breathtaking global wealth inequality, leading one observer to describe the situation as “the peak of the second Gilded Age.”
400 Americans own more than the bottom 64%
A new report from the Institute for Policy Studies finds that in the USA, the 400 richest individuals now own more wealth than the bottom 64 per cent of the population, and the 3 richest Americans now own more wealth than the bottom half of the United States combined, while 1 in 5 households has zero or negative net worth.
1,542 global billionaires own $6 trillion — more than twice the UK’s GDP
In October, the Swiss financial firm UBS found that there are 1,542 billionaires in the world, and their wealth grew by 17 per cent in 2016, bringing their combined fortune to a record $6 trillion — more than double the GDP of the United Kingdom. Josef Stadler, lead author of the UBS analysis, told the Guardian that the firm’s findings show that the world “is now two years into the peak of the second Gilded Age.”
The global 1% own more than 50% of world's wealth
And the latest edition of Global Wealth Report, produced by the global banking giant Credit Suisse, explained that the richest 1 per cent now own slightly more than half of the world’s wealth: 50.1 per cent, up from 42.5 per cent in 2008, at the height of the financial crisis. Meanwhile, 3.5 billion people, corresponding to 70 per cent of the world’s adults, own less than US$10,000 in wealth, the report found, holding just 2.7 per cent of the world’s wealth.