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.
Friday, April 5, 2013
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.
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.
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.
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.
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