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Why It's a Problem When the Top 1% Earn So Much More Than the Rest of Us

The impact of economic inequality might not seem tangible in the short-run, but its long-term consequences are devastating.

Yet another report on global income inequality was published yesterday, delivering a scathing assessment of the rich-poor wealth gap.

"An Economy for the 99 percent" compiled by Oxfam International, ahead of the World Economic Forum in Davos, Switzerland concluded that the world's eight richest people have as much wealth as the poorest 50 percent of the world's population. Here at home, Oxfam estimates that the two richest Canadians — specifically billionaire media magnate David Thomson and Galen Weston Sr. of Loblaw fame — have the cumulative wealth of 30 percent of the poorest Canadians.

There's been a bit of controversy about the methodology used in calculating the wealth gap between the super-rich and the very poor (I'll get to that in a minute), but the overarching theme of the report remains valid — that economic inequality is prevalent, and unsustainable. Although the world is less poor that it was 50 years ago and the poverty rate in Canada has certainly declined in the last decade, the benefits of growth have not been evenly distributed — income inequality in OECD countries, for instance, is at its highest level in half a century.

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