Income Inequality... Just Who in the 1%



It is very common these days to hear the chants of income inequality.
The gap between the top 10% or the top 1% and the rest of society is too much.

The image of the rich bankers looting everyone of their wealth living large, while the poor and middle class suffer. What we need of course is higher taxes and more government to help the poor and middle class.

Well, it sometimes help to look at the numbers.
I will show that it is in reality the government that has increased income inequality.

One can read more about the numbers behind it here:
http://utpjournals.metapress.com/content/pw6v54766127788l/fulltext.pdf

The Top 1%

In Canada, to be part of the top 1%, you need an income of:

$230,000

That's right... in Canada... to be part of the top 1%, you need a $230,000 salary.
It doesn't sound like very much... and the breakdown is actually as follows:


Finance/Insurance: 10% of the people in the top 1%

CEOs and other high management: 14% of the people in the top 1%

Doctors/Dentists: 10% of the people in the top 1%


HouseHold Income
 
Stats Canada House Hold Income 

You can see the raw data in the link above which shows the breakdown of family income.




There statistics are not granular enough, but we see that to be in the top 10% of household in Canada, you could be earning around $140000.   

That's right, earning $140000-$150000 as a family normally puts you in the top 10%.
So what kind of families would be in the top 10% in Canada?

A family with one major income earner being a lawyer, doctor, high ranking manager, various technical specialities..

Assuming both parents work, you could easily cross this gap by being:
Any combination of professional public sector jobs (teacher, police officer, nurse...)
Any combination of private sector professional jobs (engineer, accountant, sales...)

This folks is the top 10% in Canada.

How Does The Government Increase Income Inequality


 If you look at the jobs that are in the top 1% and correspondingly the top 10% of household income, you will note they are perceived by society as 'regular' jobs.
As the government gives raises to those in the public sector, especially in the professional area (police officers, teachers...) it increases income inequality as you an often such people in the top 10% of household. Throw in pension benefits and overtime, and the government is probably helping people in the top 1%... or at least the top 2-5% :)

Raises to doctors and various mandates in the private healthcare sector enrich these groups as well.

Let's not even get into finance bailouts, legal schemes...

Sure, I think we must all acknowledge the existence of the 'super-rich', but they are very small in number.
The bulk of the income equality comes from jobs that are commonly perceived as middle class or upper middle class. These are the jobs that contribute the most to the income inequality.  Combined with the change in mentality of two income households where professionals tend to marry professionals, this further increases income inequality.

Conclusion


When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time, a legal system that authorizes it and a moral code that glorifies it.

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.
Frederic Bastiat

This seems fitting for the those in the public sector, financial sector... who benefit at the detriment of society all the while enshrining their benefits in law and thinking they are acting morally instead of plundering it.



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