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4.5: Patterns of Inequality in North America

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    While both Canada and the United States have relatively strong economies, income inequality persists. In the United States, around 12 percent of people live below the poverty line. Some argue that the traditional definition of “living below the poverty line” has not kept up with rising living costs and inflation and that the actual percentage of Americans living in or near poverty is far higher. This income inequality is geographical, with the states in the south having significantly greater concentrations of people in poverty than the rest of the country (Figure \(\PageIndex{1}\)).

    These regional differences are connected to historical differences in development. Just as the northern areas were the first to industrialize, they were the first areas to transition to more higher-income service industries. Although areas like Silicon Valley in California and the Austin-San Antonio region of Texas have had an influx of high-tech industries, some areas of the south have been slow to transition from primarily agricultural and natural resource-based economies.

    Figure \(\PageIndex{1}\): Map of Poverty in the United States, 2015 (United States Census Bureau, U.S. Department of Commerce, Public Domain)

    Canada’s poverty rate is lower than the United States at around 10 percent. In general, Canada has stronger social welfare programs than the US. All provinces of Canada provide universal, publicly funded healthcare, for example, and a monthly income is provided to those in extreme poverty.

    However, in both the United States and Canada, income inequality is closely tied to ethnicity and race. For Canada’s First Nations, poverty and homelessness rates are much higher than the national average. Half of all indigenous children in Canada live in poverty. In some areas, like Manitoba and Saskatchewan, the number is over 60 percent.

    In the US, the poverty rate among non-Hispanic whites was just over 10 percent in 2014. For black Americans, the poverty rate was 26 percent. By some measures, the US has the highest degree of income inequality among the advanced economies of the world. In Canada, the richest 10 percent own 57.4 percent of the country’s wealth. In the United States, the richest 10 percent own over 75 percent of the wealth in the country, the highest of the twenty most developed countries in the world.

    4.5: Patterns of Inequality in North America is shared under a CC BY-NC-SA license and was authored, remixed, and/or curated by LibreTexts.