Equity and Income Distribution

1. Equity and Income Distribution

2. Learning Goals – bring your text book 8. I will be able to describe some of the human rights that Canadians enjoy. 9. I will understand how Human Rights charters help to promote equity of income distribution 10. I will be able to explain how tools such as the Human Development Index and the Lorenz curve can be used as indicators of socio-economic wellbeing 11. I will be able to explain how the government is involved in the Canadian economy as a redistributors of income 12. I will be able to evaluate the effectiveness of government programs designed to ensure greater equity and economic security for Canadians

3. Human Rights in Canada • The United Nations created the Declaration of Human rights in 1948 (UNDHR). This declaration encourages equal rights and respect for all people. • Started in PEI during Confederation in 1867 • During the 20th Century, these rights started to include voting rights for women, rights for Aboriginal people and basic economic rights. • These rights were eventually codified/arranged into the Canadian Charter of Rights and Freedoms.

4. Economic Rights in the UNDHR • 21. Equal opportunity to use public services e.g. roads and hospitals • 22. Everyone has the right to be respected in society. E.g. the poor should be treated equally • 23(1) – Everyone has the right to work and work in a safe environment. • 23(2) – Everyone has the right to equal pay regardless of race, gender etc. E.g. women and men should make the same amount of money if they are doing the same job.

5. 23(3). Everyone has the right to fair payment to be able to support their families. This can be done through either work or social programs. • 23(4) – Everyone has the right to join a union to protect their rights. E.g. the teachers union argues for increased pay for after school activities. • 24 – everyone has the right to a reasonable vacation. In Canada, minimum vacation is 2 weeks by law. Everyone has the right to reasonable working hours. In Canada, 40 hours is the reasonable work week. Any time after 40 hours Canadians are paid time and a half.

6. 25(1) – Everyone has the right to a safe and healthy standard of living. E.g. they have the right to be fed, clothed, housed, and medical care. • 25(2) – Children will be protected from harmful situations. Mothers are entitled to special care e.g. maternity leave • 26(1) – Everyone has the right to education. Education up to grade 12 will be free and compulsory. Secondary education will always be available to those who earn it. E.g. level 4 students can get scholarships if they do not have enough money. • 28 – Everyone has the right to a chaos free society both domestic and international. E.g. no cars on fire in the street, no robbing of store fronts. Able to travel in safety to other countries.

7. Meeting our Learning Goals • What are some of the human rights that Canadians are able to enjoy? • How does Human Rights Charters help to promote equity in income distribution?

8. The Task • Find a partner that is from the same country as you, you will be doing your presentations together. • (yes I know some of you won’t have partners!)

9. Human Rights in your countries– research presentation • Does your country have a human rights charter? • What are some of the rights that citizens in your country enjoy? • Does your country have any other rights other than the ones we discussed? Are there any missing? • 2 interesting facts • Citations…. • PRESENT!!!

10. Equity in Canada • Definition of Equity in economics – a distribution that if just and fair. Sometimes equity means equality and sometimes it is meant to suggest that rewards be proportionate with differences in workload and effort that is required.

11. Reasons for Economic Inequities Reasons • People have different physical and mental abilities • People differ in the degree of education and training that they receive • Some individuals are willing to work longer and harder • The assumption of risk and responsibility is usually rewarded. E.g. oil riggers, high rise construction workers, and other dangerous occupations.

12. 5. Luck and Health - inherit money, win the lottery, marry into money. 6. Family background - high income families vs. low income families. 7. Market power means higher income - size = power=money e.g. McDonalds vs little unknown burger joint. 8. Discrimination – age, gender, ethnicity, and disability. As the population becomes more educated and open minded the discrimination factor has lessened. However, effects of discrimination are still felt in some cultural groups. E.g. African Canadians – higher unemployment and lower wages (pg 337). 9. Regional economic disparities – some regions report lower economic incomes. See chart 15.7. In communities that are dependent on few resources and industries, setbacks in these sources can have large economic repercussions. E.g. the collapse of the fishing industry in Atlantic Canada.

13. The Task 1. Group the nine factors affecting income distribution into two groupings. • Group 1 – high importance • Group 2 – moderate importance Be sure to explain your reasons.

14. Reflect on Learning Goals 8. I will be able to describe some of the human rights that Canadians enjoy. 9. I will understand how Human Rights charters help to promote equity of income distribution

15. Checking your Understanding • Pg 338 Case Study Questions 1,2 and 3 • Pg 339 4a)

16. Learning Goals Reminder • 10. I will be able to explain how tools such as the Human Development Index and the Lorenz curve can be used as indicators of socio-economic wellbeing

17. Socio-Economic Indicators Statistics that show levels of life quality and related  to social needs, economic needs and the environment

18. Canada’s Equity Efforts • Canada’s efforts to redistribute income to make life better for all Canadians has resulted in a society that is recognized around the world as a good place to live as evidence by the Human Development Index.

19. Human development IndexHDI • It was created to measure the development of countries through the combination of social aspects as life expectancy, educational attainment and income. • It determines the growth or reduction in current human development • it helps governments know when there is a decline in their country, and take actions to prevent future problems

20. It helps determine if a country is in developed, is developing or undeveloped, having a further point of view compared to the economical aspect. • Country Profiles: http://hdr.undp.org/en/countries/

21. Average Incomes in Canada • http://www.itc-canada.com/news/highest_and_lowest_paid_occupations_in_canada.htm (table of 2012 highest and lowest paying jobs in Canada) • Average Median income in Canada is $29 250 • (http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil105a-eng.htm) • The average income is calculated by dividing Canada’s total income by the population. This is called the mean average income. • What is the problem with calculating the average this way? • Median Income – the middle income dividing Canada’s range on incomes into two equal parts. • In 1996 Canada’s Mean Average was $25 196 and the Median Income was $18 891. What does these numbers tell you?

22. Income Distribution • Economists divide Canadian income earners into groups called Quintiles • A quintile is one-fifth (20%) of the total number of earners. • E.g. Suppose the incomes of 10 million Canadians were ranked from lowest to highest. • 1st quintile – 2 million people earning the lowest incomes • 5th quintile – 2 million people earning the highest incomes • See figure 15.2 on page 333. We can see that the first quintile only recieves 4.4% of Canada’s total income and that the fifth quintile recieves 45.3%. • What do these statistics tell us?

23. The Lorenz Curve • A curve that shows the accumulation of each quintile. • Smartboard • How can it be used as an economic indicator

24. Class/Homework • Pg 335 questions 1,2,3 • Median = halfway. • Mean = average.

25. Back to Learning Goal #10 • I understand and can explain how the Human Development Index can be used as an indicator of socio-economic wellbeing • I understand and can explain how the Lorenz Curve can be used as an indicator of socio-economic well-being

26. The Next Learning Goals 11. I will be able to explain how the government is involved in the Canadian economy as a redistributors of income 12. I will be able to evaluate the effectiveness of government programs designed to ensure greater equity and economic security for Canadians

27. Poverty in Canada • The stats • 1 in 5 children live in poverty • The level of poverty has increased by 4% since 1980 • Food bank use is increasing. 140 000 people in GTA a food bank Two Definitions of Poor The Working Poor – people who work for low wages The Welfare Poor – The non-working poor.

28. Redistribution of National Income • Scenario 1 – a nation with complete equity. • Individuals will be less inclined to work harder and longer, take risks, and student harder. Efficiency would fall, and with it, the economy’s ability to increase its production of goods and services. BUT, everyone would have income. • Scenario 2 – in a capitalist society income inequalities are essential for it to succeed. • Productivity is high and people who work hard and invest in themselves tend to be rewarded for it. HOWEVER, we have people who are not earning income due to sickness, age, or other circumstances.

29. The Big Question • How do we ensure people’s economic rights (pg 347 Declaration of Human Rights) and reduce inequality – particularly poverty – without ruining the economy?

30. Canada’s Answer • It established a welfare state (explanation on next slide) • It implemented a progressive tax system • Tax money goes towards public education, social services and health care. These are things that benefit all Canadians. • Government finances home-ownership programs, student loan programs, RRSP, RESP, scientific research, business development programs, environmental initiatives etc etc.

31. The Canadian Welfare System • During the Great Depression there were no social programs in place. Unemployment soared to 20%. • As the Depression progressed the Canadian Government began to put more money into social assistant programs to assist needy individuals and families • From the 1930s to 1970s the role of the government in our economy began to expand

32. In the second half of the 20th century Canada became a Welfare State. • A welfare state is when the government plays a significant role in attempting to ensure the economic well being of its residents. • By the end of the 20th Century, government spending on income security, health and education represented the three main pillars of the Canadian social welfare system.

33. Canada’s Social Welfare Safety Net • Unemployment Insurance (UI) • Family Allowance • Old Age Security • Canada Assistance Plan (CAP) • Canada Pension Plan (CPP) • Medicare • Publicly funded education For more information on these programs see pg 291

34. 1. What are some problems with the Welfare State? 2. What do you think Canada could do to limit some of these problems?

35. Complete the social welfare reform case study