Prosperity, inequality, and poverty Working Paper 10 - September 2007
While Ontario has one of the most prosperous economies in the world, inequality of income distribution in the province has been rising. A more important consideration, however, is the persistence of poverty.
Poverty and inequality are not the same.
Inequality has also been increasing in Canada and in most developed economies. The factors that are driving this growing inequality – technological change and the strengthening importance of knowledge and skills – are also important factors for prosperity growth. But it is incorrect to say that greater prosperity is driving greater inequality.
Poverty is concentrated among six high risk groups – high school dropouts, recent immigrants, lone parents, unattached individuals between the ages of 45 and 64, the disabled, and Aboriginals. Individuals in these groups are much more likely to be at the bottom end of Ontario’s income distribution and are more likely to live in poverty. To help these people, we need greater investments in their skills and capabilities. These can be funded more easily if Ontario achieves its prosperity potential. Then, in a virtuous circle, if more of these Ontarians participate in its economic development, our prosperity will grow even further.
These are some of the key conclusions of Working Paper 10, Prosperity, inequality, and poverty released today by the Institute for Competitiveness & Prosperity.
