Canada’s income gap is a worry to several business leaders, as discussed in this story I wrote with Anna Mehler Paperny in May.
A separate Conference Board report published in July showed the richest segment of Canadians increased their share of total national income while poor and middle-income individuals have lost ground since 1993.
The Conference Board uses a measure of income inequality called the Gini index. It calculates how the distribution of income deviates from a perfectly equal distribution. A Gini index of 0 means that every person in the society has the same amount of income while 1 would show that one person has all the income.
A country with low inequality has a Gini index of 0.3 or less while those above 0.4 point to a high-disparity country. Canada’s Gini index hit 0.320 in the late 2000s from 0.293 in the mid-1990s. During the same period, the United States’ Gini index rose to 0.378 from 0.361.
Income inequality, along with corruption, were named as the two most serious challenges facing the world at this year’s World Economic Forum in Davos.