Report on Income Inequality among the Indigenous People in Canada to explore the root causes of the income inequality

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Income Inequality among the Indigenous People in Canada


The paper has described the account of income inequality and its impact on the indigenous community in Canada. The purpose of this essay is to explore the root causes of the income inequality and the impact of such earning disparity among the indigenous population in the form of education, livelihood and economic aspects of the country. The paper has initially discussed the indigenous population accounts along with the changes in the statistics followed by the other factors having active involvement in creating and fuelling the income gap among aboriginal people and traditional British population. 

Indigenous population:

The term indigenous refers to the community in the Canada from the first nation or the North American Indian or the treaty Indian, registered under the Indian Act of Canada. Therefore, indigenous people in Canada would be defined in the constitution act 1982, section 35(2) that involves the Indians, Metis and Inuit people living in Canada. According to the census and government statistics most of the indigenous people in Canada among the total population is maximum (60.8%) where Inuit people contributes minimum (4%) in the total population. Therefore, apart from the domestic residents, the indigenous population often avail the less facilities in the country than the traditional people of the country in the form of education and occupational features. Thus, the income inequality arises due to such social and racial classification rather judging capability based on the knowledge and competency. There are many factors having a great impact on the income inequality and vice versa. Following are the account of the aspects involving in income inequality possessing significant contribution in its development and expansion (Over 80% of reserves have median income below poverty line, census data shows. 2018). 

Income inequality in indigenous people in Canada: 

The most common method of evaluating the income statistics of a country is to calculate the median where the status of the population can also be predicted from that statistics. In this context, four people in every five in Canadian population possess the median income that fall under the poverty line as observed in 2016 statistics. The Canadian press review has delivered the information that 81% of the indigenous population is reserved under poverty line while possessing median income level. In evidence, the lowest end it has been observed that 27 communities have reported median reserves having total income of below $10000. This income figure came from the tax filings in the year 2015 where Trudeau Liberals have been elected with the promise of improving economic condition while faced the highest poverty issue in this year. However, it is not the actual figure whereas it is based on the registered populations only. In that case, there are few indigenous populations having no published information due to some security issue. The statistics Canada is planning to conduct a more robust census to plan the improvement of the indigenous population in future (Aboriginal Income Disparity in Canada. 2018). According to the emerging picture, the population of indigenous community shows the significance of younger population. However, the fertility rate is significantly higher while possessing relatively lower expectancy rate. In the year 2015, a hike in income level has also been observed due to the increment in commodity price during the previous year where the rate of the hike has been observed to be 10.8%. In that case, Lamb, Yap & Turk (2018) stated that inflation is another parameter to measure the income level and purchasing power of the customers. Therefore, the significance of hiked income level is statistically significant. In the recent year, the gap in income disparity has been has been revealed significantly. However, the situation has been worsened during this period over 1981 and nearest decades. 

Relationship between status and identity:

Social status and identify in Canada have an influence in creating income prospect for the socially backward classes or the aboriginal communities in a country. In case of Canada, as mentioned above regarding indigenous population in Canada, most of the people from this community earn significantly less than the traditional British population. The same scenario has also been considered in case of control over the age and education. In this context, Mitrou et al. (2014) stated that social barrier plays a pivotal role in segregating the status of the people and thus, the income potential of the associated community. Similarly, the income range has also been considered as the prime factor behind the status of the people where British population has attained a better position from this standpoint. In contrast, the statistics regarding the above context has also excluded the Inuit Women who has attained the exceptionally good position like the British residents. Thus, the indigenous population in Canada is poorer than British, which can also be explained in the form of education level and youth. 

Four different status patterns have been identified in case of linking the age group with the status of indigenous population. The first pattern refers to the exception that is mentioned above. In this pattern, the gap in education and income between the indigenous population and traditional British is negative while statistically significant in nature irrespective of the age group, income and community. According to the current statistics, income and gap of earning between two different populations are ranging from 10% to 20% among men and 20% to 50% among women (Aboriginal Income Disparity in Canada. 2018). 

The second pattern has followed the status gap in between different indigenous group to examine the distribution of earning opportunities among the aboriginal community. In accordance with the statistics of 2006, the income and earning gap between the registered Indian men and British people has consumed the maximum range of 50%. Similarly, the earning gap between non-status Indian and Metis people in Canada is range from 10% to 20%. Therefore, from this pattern it has been observed that the community gap has been considered as the key criterion to decide the status of the people. The gap among indigenous population is significantly less where the gap between the aboriginal and British are high. As commented by Breau & Saillant (2016), income and status are interrelated to each other where the affect of each factor is potential enough to hike the gap.  On contrary, it has also been observed that gap in income is wider among the men in aboriginal population. However, the gap in women is smaller and thus, the patterns are less applicable for the women. The ranking among women is similar to men while distinction is in gap, which is minimal. In that case, the average earning gaps, fared for the registered Indian women is 11%, for the non-status Indian is 9% and Metis women is 11% (Aboriginal Income Disparity in Canada. 2018). 

The third pattern inculcates the disparity in total income as compared to the earning gap in reserve. In Canada, the least number of well-off citizens access the government transfer scheme, which is also considered in calculating the total income of the British population. Therefore, the statistics are only focusing on the core wage of the population that does not really reveal the truth of the indigenous people. However, after inclusion of the government transfers, the income disparity among the traditional British and indigenous people is still remained 50%. Therefore, the government transfer does not active in resolving the income disparity issue in Canadian indigenous population. In case of this scenario, Kimball, Neal, Waters & Hoh (2014) viewed that government initiative is important in this regards in order to minimise the income disparity among the aboriginal people in Canada. Apart from that, the fourth pattern has delivered the comparison during the years between 1995 and 2005. All groups in the indigenous community have reduced the gap during this period. However, the speed of reduction is different for the different groups. In evidence, the registered Indian has diminished the rate by 33%, non-status Indian by 12% and Metis by 50%. In that case, the rate of reduction is similar for both the genders (Aboriginal Income Disparity in Canada. 2018). 

Impact of Income disparity on labour market:

According to the detailed evaluation of indigenous population in 12 urban labour markets, it has been observed that location is not the only factor affecting the earning difference in aboriginal community in Canada. There are other factors affecting the income difference between indigenous people and traditional British people. In the cities of Canada with significantly small population, the registered Indian community has faced the earning gap between the indigenous people and the traditional British people of 17% and 12% respectively. On the other hand, the case of urban registered Indian population has also revealed the fact that among the small population of the Indian community is Canada, the gap ranges 11%-41% for the men and 8%-33% for the female population. Thus, from this statistics, it is clear that location is not the only factor affecting the income disparity between indigenous population and traditional British community in Canada (Aboriginal Income Disparity in Canada. 2018). 

It has also been found in the recent statistics that the income gap in indigenous population in Canada has been improved a lot in both the national and city level. However, the gap among relatively large aboriginal population has remained same and significantly higher over the other aspects. In the year 2006, the gap has ranged between 16%-33% for women and 27%-41% for the men. Therefore, in the opinion of Pendakur & Pendakur (2016), the urban labour market does not depend on the location or the population only. A small part of the indigenous population also enjoyed the benefits of the British population and educational amenities. Moreover, the income disparity has also impact on the educational background and thus the capability of holding positions in the market. 

Contribution of education among indigenous people to overcome earning disparity:

It has also been observed that education is one of the key barriers in holding a good position in the market. In that case, the earning disparity has created the distinction between the indigenous people and the British population in Canada in terms of the affordability of education and high level qualifications. Therefore, the disparity in the income in further generation has also been continued from the lack in proper education (Aboriginal Income Disparity in Canada. 2018). Thus, in order to hold a good position and earning prospect in Canada, the indigenous population needs proper educational facilities so that the earning prospect of the indigenous population would be hiked. In that case, the Canadian government would take a drastic step towards the improvement of educational background so that the new generation would avail the scope of better earning to that would reduce the income inequality and thus, social issues due to income gap in future. In the opinion of Feridun (2016), in the developed countries, education is the only media to participate in the competition prove to attain the success in terms of excellence and higher income level. Thus, education along with the governmental intervention in promoting the indigenous people in Canada would help the population in improving the gap in terms of gap reduction. According to the statistics, mentioned in the previous section states that education amenities in Canada among the British and indigenous population has a wider gap resulting in the scope of earning. Moreover, it is the responsibility of government and different social organisations to distribute the educational services at comparatively less cost to balance the status and minimise the gaps between aboriginal people and traditional British population in Canada (Aboriginal Income Disparity in Canada. 2018). 


Concerning to the above discussion, it has been observed that the income disparity among the indigenous population has increased during last decade. However, there have been a large number of factors having significant impact on the income level and status of the indigenous population. According to the statistics, the rate of population in this community is increasing over the years due to fertility rate where the average life span is significantly lower. Therefore, the income distribution has been unequal between the indigenous population and traditional British population because of the education level and status. Simultaneously the disparity has also the impact on the labour markets in Canada in the form of knowledge and skills. 

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