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Why you should care about the gap

More than morals should make you care about the growing income gap. Here's why:



Democracy erodes.

In their much-talked-about new book Why Nations Fail, M.I.T. economist Daron Acemoglu and Harvard political scientist James Robinson found that nations with huge disparities of wealth tend toward dictatorships and kleptocracies. Civil unrest is more common, as is profound mistrust of government, reduced economic and technical innovation and crime.

And the reverse is true -- countries thrive when their civil, political and economic institutions are inclusive and equal.

"Countries such as Great Britain and the United States became rich because their citizens overthrew the elites who controlled power and created a society where political rights were much more broadly distributed, where the government was accountable and responsive to citizens, and where the great mass of people could take advantage of economic opportunities," wrote the authors.



Health care costs more.

In a series of reports over the last few years, researchers at the Manitoba Centre for Health Policy have looked at a whole bunch of health indicators -- from breastfeeding to diabetes to cervical cancer screening -- and found that poor people are far, far less healthy than rich people.

And, in some cases, the gap is widening. The best health indicator, life expectancy, offers the starkest evidence of a gap. If you are a woman living in the a newer neighbourhood in South Pembina, you'll likely live to nearly 87 years. If you are a woman in the North End, odds are you'll die at 70.

All that adds up to exponentially higher health-care costs that could be mitigated by more equality.



The economy suffers.

Countries with big income and equality gaps between rich and poor suffer economically. Sustained, long-term economic growth is strongly linked to more equality in the income distribution. That's what two senior researchers with the International Monetary Fund -- not exactly a bastion of aggressive socialism -- found last year.

"The difference between countries that can sustain rapid growth for many years or even decades and the many others that see growth spurts fade quickly may be the level of inequality," wrote researchers Andrew Berg and Jonathan Ostry.

"To borrow a marine analogy: A rising tide lifts all boats, and our analysis indicates that helping raise the smallest boats may help keep the tide rising for all craft, big and small."



Crime gets worse.

Winnipeg has always had the reputation as the crime capital of Canada. But 100 years ago, that meant pickpockets, con men and pimps who collected near a long line of drinking hotels along Main Street, where fist fights and the occasional drunken brawl occurred.

Now, the crime that plagues poor neighbourhoods is of a remarkably violent, drug-fuelled and gang-related variety. Of the 15 homicides so far this year, at least 11 occurred in poor neighbourhoods, where the human and economic toll of stabbings, robberies and gang violence is concentrated.

Republished from the Winnipeg Free Press print edition June 16, 2012 J4

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