Economic Inequality in Canada

Economic Inequality

• Economic inequality refers to the unequal distribution of economic resources like income and wealth among individuals or groups.

Measuring Economic Inequality

• Statistics Canada uses various measures to assess economic inequality, including market income, after-tax income, and total income.
• Market income represents the total income earned from factors like wages, interest, rent, and profit before paying taxes.
• Total income is market income increased by the cash payments from governments to households.
• After-tax income is the total income after paying taxes.

Key Facts (from provided text)

• In 2006, the poorest 20% of households received 4.8% of the nation's after-tax income.
• In 2006, the median household income in Canada was $44,000.
• In 2006, the mean household income in Canada was $54,300.
• In 2006, 7 percent of households received the mode income in Canada.
• The income received by the richest 20% of households in Canada was 44 percent of the total after-tax income in 2006.
• The middle 20% of households received 20 percent of the total income in 2006.

Income Distribution

• A Lorenz curve graphs the cumulative percentage of income received against the cumulative percentage of households.
• The line of equality represents perfect income distribution, where each percentage of households earns the same percentage of income.
• The greater the distance between the Lorenz curve and the line of equality, the greater the inequality in income distribution.

Sources of Economic Inequality

• Differences in skills and abilities contribute to wage disparities.
• Differences in educational attainment influence an individual's human capital, impacting earning potential.
• Market power, particularly for skilled labour, can result in higher wages.
• Discrimination in the labour market negatively affects certain groups' wages and income.

Explore the dynamics of economic inequality in Canada, focusing on how income and wealth are distributed among different households. This quiz covers key facts and measurements of economic inequality, including market income, after-tax income, and total income statistics from 2006.