Who has income inequality affected the most?


Income inequality has affected children the most. As child poverty was decresing, income inequality was increasing. High inequality rates are likely to continue in the next generation. Children with disabilities, poor children, and children living in rural areas, especially in the former homelands. Studies show that only a third of children were living with both of their parents. With income inequality in the U.S. being as high as it is, its hard for parents without jobs to provide for their children things that they really need to survive.

How does the income gap affect states?


As you can see above, Idaho is lagging behind the national average in concerns to the income gap. Unlike the nation, Idaho has still not recovered from the recession. There has not been a specific cause found as to why Idaho has not recovered. I think if Idaho were to produce a few more jobs they may step onto a brighter path to overcoming their debt.

Other than Idaho, Illinois also has a growing income gap. Illinois is ranked ninth greatest income inequality. In other words, Illinois is ranked 12th out of the fifty states. This had mainly been caused by the shutting down of factories and industries leading to massive job cuts. Journalists suggest the income gap is widening fast in Illinois.

How does the income gap affect the economy?

The income gap actually affects the economy negatively. It causes less stable economic expansions and sluggish growth. Mr. Ostry and Andrew G. Berg found that in rich countries and poor, inequality strongly correlated with shorter spells of economic expansion and thus less growth over time. I think the income gap in America drastically affects the economy. If we continue with the same income gap that we have today, it will lead to jobs lost and slower job creation. We have a huge income gap and a suffering economy. I'm not saying that the income gap is the sole cause to our economic difficulties, but I certainly believe that it is one of the leading causes.
                             

How does the American income gap affect different generations?

For the elderly, the future does not look very bright. The average American has to work a longer period of time before they can reach their retirement because they simply would not have enough money saved to live off of. This is horrible. The percentage of people who have worked hard their entire lives in this country will never get a break.

For the middle aged/young adults, there does not seem to be a bright path in the future. There are many rumors that Social Security will run out soon. Besides not being able to look forward to a comfortable retirement, the middle aged adults today can barely find decent jobs.

What about the children? The youth of today could very well be the ones who are affected the most by our crumbling economy. Why, you might ask. Well because the youth of today will most likely NOT have social security at all, will most likely NOT be able to land a solid career in the future economy, and more teens and children will be more likely to live in poverty. Why does our future look so dreary? Who knows. The choices parents make will affect the younger generations as long as time goes on. At this rate, the future does not look very bright at all.
                                

What is the status of income inequality around the world compared to the United States?

According to The Atlantic, income inequality is worse today than it was in 1774.  The rankings of inequality haven't changed much over two decades, but inequality is rising in most developed countries. No one knows absolutely why. The increase in income inequality has been greater in Canada than in the U.S. since the mid-1990s. I think income inequality has a bigger affect on the U.S. than it does in any other countries because our gap is greater than most others and the bigger the gap the larger the affect is.



Below are two different charts that illustrate the U.S. income distribution.

What are the social effects of income inequality?

A current study being conducted by Ioana Pop is trying to connect income inequality to work performances in society. So far, they have found correlation between work performance and social problems such as physical and mental health, violence, and educational performance. The wider the income gap the more each of these social problems are affected negatively.

Can income inequality affect your health?
The answer is yes! The pressure and stress for lower income families can be caused by having to find ways to get the bills paid. Plus, who knew that financial stress could lead to an earlier death? Besides health related issues, income inequality has also been matched to crime rates, high school drop-out rates, and teen pregnancy.    

I'm beginning to believe that the social effects of income inequality are endless! After dissecting different research, I've found that income inequality can be linked to many illnesses and disorders in many ways.

Below are some charts showing the correlation of different lengths of income inequality

                                               
                                               
                                               
                                                
Essentially what these graphs show is that when the income inequality is lower in certain states and countries around the world, people are better off: homicide rates are lower, there are less drop outs, life expectancies are higher. Even if the states or countries aren't as rich, the fact that the income inequality is lower greatly contributes to the well being of the people in that area.

Is income inequality preventable? Should we prevent it? How? Why or why not?

Income inequality is not necessarily preventable, although some will try to. According to St. Louis Fed, "income inequality will still exist even if the income inequality statistics are adjusted to account for the aforementioned factors" such as household size, tranfers recieved and taxes paid. Income inequality is really just the effect of a well-fuctioning capatlist economy. The income a person makes is related to not only their education, but their productivity. People are not more wealthy because they have more money, but because they are more productive. So to prevent the income inequality you would have to prevent a person's inequality. We shouldn't prevent it, though, because if we do we lose all the benefits that come along with our well-functioning economy. Economic research has documented a positive correlation between entrepreneurship and the overall economic growth of a country. We should not be in favor of policies that aim to shrink the income distribution by redistributing income from the more productive to the less productive simply for the sake of being fair. Redistribution of wealth increases the costs of entrepreneurship and innovation, that results in having lower overall economic growth for everyone.

Should there be income inequality? Why or why not?

As ideal as it would be to have no income inequality, it is needed and provides many benefits. An income gap proves that there is an acceleration of economic growth that will prove to raise the standard of living, as talked about in the article published by The American. For most, the income gap shows the difference in a person's education. A college graduate will prove to have a much greater income from a person who only completed high school, or simply dropped out. It shows the rewards for being in school longer and furthering a person's education. If a person is specifically trained in a certain field they are bound to have a higher income, and the less that are trained in that field, the greater the pay may be. So generally, income inequalities actually show benefits in the work force. Income inequality should not be vilified, and public policy should encourage people to move up the income distribution and not penalize them for having already done so. Income inequality is what makes a functioning economy.

Is income inequality noticable in the United States? Why or why not?

Income inequality is noticable especially in median households. According to census data, median United States household's income in 2009 totaled to $49,777. Half of the United States' households had income greater than this, and the other half had less. Income inequality is noticeable because of the recession  that occured from 2007-2009.

Not only because of the recession, but I also think that income inequality is noticable in everyday life for everyone. If you look around the United States, you'd easily notice the inequality. Not everyone can afford the same things. Some people can't even afford everyday necessities.

Below is a chart of the median household income.

How is income inequality measured? Is this effective? Is there a better way?

Income inequality is measured usually using a gini-coefficient. This is represented by the area between a Lorenz curve and the line of equality. A Lorenz curve is a graph that is formed by "illustrating the percentage of total income earned by a given proportion of the population. The Gini ratio, the area between the diagonal line and the Lorenz curve divided by the whole area below the diagonal, is a numerical measure of the degree of income inequality" (Glencoe). This means that you could find out something such as: the bottom 30% of households bring in 15% of the nations income.  According to worldbank.org the gini-coefficient can vary between 0-1. If the coefficient is 0 it means that there is complete equality in the degree of income. If the coefficient is 1, it means that one person has all the income and everyone else has nothing.
I think this is an effective way of measuring income inequality. It fully exemplifies the difference between incomes of rich and poor. However, other methods exist such as the Atkinson index, coefficient of variation, and decile ratios. Most of these aren't used because they don't use the entire population of incomes. I think that the only better thing about the Atkinson index is that it gives a "varying sensitivity to inequalities in different parts of the income distribution". (PMC)

Why does income inequality occur?

There are several reasons as to why income inequality occurs. One of them being that wages are set by the market. There are many factors that tie into the market deciding what certain wages should be set as. A few factors are availability of workers, skills, and the level of competition jobs. Income inequality occurs because richer households tend to become more rich while currently lower class households experience a decline.

The main five reasons described by reuters can be found here.

                       

What does the phrase Income Gap or Income Inequality mean?

The income gap is the difference in incomes between the rich and the poor. If the income gap is not very large, it benefits the economy. On the other hand, if there is an increasing gap between the rich and the poor, it will affect the economy negatively. Our income gap today is the largest it has ever been since 1928. The top 1% of Americans earn nearly 40% of the nation's collective income, while the bottom 80% only accumulated about 7% of the nation's collective income. To me, that makes my stomach turn. Why are people who probably work just as hard as eachother making such different amounts of money? Our country can be compared to others like Cameroon or Ivory Coast in means of the income gaps. I can't help but wonder what could cause such a great gap. Looking in to it, I found that one problem is that the rich only want to get richer. Businesses expand. People find ways to make themselves richer. Meanwhile, the lower class of America continue to lose their jobs to machines and to people who are willing to work for less money.

What could a wider income gap do to our country? Find out here!

                                      

Income inequality is the uneven distribution of income across an economy. The income inequality in America is damaging the U.S. economy. The rich keep getting richer and the rest keep getting more poor. The income inequality in America has skyrocketed since 1970. The rising income inequality is caused by the widening income gap between the rich and the poor. There's a simple answer to this. Let's shorten the gap. But this brings us to the same point as stated in the first paragraph. The rich don't want to shorten the gap! They just want more money in their pockets.