Arguments Of Inequality

Gary Becker’s and Kevin Murphy’s article, “The Upside of Income Inequality”, analyzes the positive effects of the income gap, and Paul Krugman’s New York Times column, “Confronting Inequality”, stresses the negative impact of the income gap; it is apparent by juxtaposing these two texts that income inequality can be effected by economic development, education, and social equality.

Income inequality can lead to an increase in the productive capacity of resources and so an increase in real GDP per capita. Economic benefits are mainly derived from the incentive effects of inequality. Firstly, inequality encourages the labour force to increase

In Paul Krugman’s essay, “Confronting Inequality,” he discusses various points about how America has developed into quite the divided country over the years. The United States of America has become unequal in terms of annual income, living standards, education and school districts, politics, and social standards, just to name a few. Several matters of combatting the injustice faced by the nation are also mentioned. All of Krugman’s points revolve around one central question, being “why should we care about high and rising inequality?” (Graff, Birkenstein, Durst 561). I believe inequality truly does raise concerning problems within our society, but it also may be a positive thing for our people. Extreme equality could, in turn, result in a communistic government in which those who work into overdrive earn the same titles as those who do not.

"How Economic Inequality Harms Societies." Richard Wilkinson:. TED Talks, July 2011. Web. 26 Feb. 2015.

From 1938-1969, in America was in a period called the great compression, a time where the difference between the richest and poorest Americans was very small and economic growth was explosive. Due to past and current economic policies and events, income inequality has exploded in America, which is why in 2015 America had the highest level of wealth inequality in the world at 80.56 gini[1] . In the future this inequality will slow down economic growth, increase debt for middle income Americans, make America less democratic, and reduce economic mobility. This problem, however, does have solutions and this paper will lay out some of the solutions and the effect they will have on the economy, but first I will explain the history of income inequality in the US.

I agree, that economical inequality brings the social inequality, where as a result, we would have a society of unequal opportunities. And this situation directly influence the future of the children, their chances to succeed in their lives and careers. We can clearly see that children with high status are

“The 0.1 percent in the U.S. today account for more than eight percent of the national income” (Freeland). Economic inequality is also known as income inequality, and it has always been a problem. The gap between the rich and the poor is growing wider and wider because wealth grows faster than the economy according to Thomas Piketty, and people are not able to move up through economic classes according to Paul Krugman. Economic inequality is a problem that can be overcome with raise the minimum wage, expand welfare benefits, and provide higher education.

The sociological views of functionalist and conflict theorist on stratification and economic inequality have had profound impact on the current economic discussion. In the past, economist have argued that wealth inequality is essential for “economic strength and social stability. [5] That wealth inequality “is needed to reward hard work, talent and innovation”. [6] However, in recent years, many economist have come to the conclusion that extreme wealth inequality, can lead to economic stagnation and social instability. What degree of

Economic inequality has been steadily growing over the past decades. According to this article, “In more recent years, accumulation of wealth by economic elites has received greater attention. Not only are the rich becoming richer, but the disparities are growing the fastest at the top. In the United States, for example, growth in wealth has occurred mainly at the very top of the scale.” (Hansen 457). This means that wealth begins to expand and business owners earn more, however pay more but not a lot more then previously. This would be a good thing, but not everyone in America is a business owner. In fact, the majority of citizens slightly benefited from the growing economy. While most view the economy as unequal, the upper class and even U.S representatives consider it fair and justified (Kraus and Callaghan

The focus of Becker and Murphy’s article “The Upside of Income Inequality” is “Growth in the education level of the population has been a significant source of raising wages, productivity, and living standards over the past century.” (585). Becker and Murphy wrote “The Upside of Income Inequality” as a statement “committed to expanding liberty, increasing individual opportunity, and strengthening free enterprise.” (581). They argue that the average income for a person with a higher education keeps getting higher, and the lower class will also see a raise in the income they receive and raise the overall standard of living for communities.

In recent years, income inequality has been seen as a bad thing. However, expert economists argue that income inequality is actually not such a bad thing. In fact, America’s economy functions on the basis of income inequality. Research suggests that an increase in income inequality has a significant positive relationship with economic growth and innovation. A study conducted by shows that in the United States, the growth process is accompanied

Income inequality has been a major concern around the world, and it mainly links to how economic metrics are distributed among individuals in a country. Economists generally categorise these metrics in wealth, income and consumption. Wilkinson and Picket (2009) showed in their studies that inequality has drawbacks that lead to social problems. This is because income inequality and wealth concentration can hinder or delay long term growth. In 2011, International Monetary Fund economists showed that less income inequality increased the duration of countries’ economic growth spells more than free trade, low government corruption, foreign investment or low foreign debt (Berg and Ostry, 2011).

Inequality is ubiquity in our world, most people are looking at the downside or the surface of this phenomenon. In fact, that inequality is the drive of historical and social progress.

Income redistribution refers to the concept of transferring income from the wealthy individuals to the less wealthy individuals through social mechanisms such as monetary policies, charity, welfare, land reforms, and taxation among others. Income redistribution affects the entire economy rather than selected groups of individuals. The concept of income redistribution emanates from the existence of income inequalities within an economy. Income inequality depicts a gap between the highest and the lowest income earners in an economy (Tullock 13). Income inequality is sometimes considered appropriate in societies since it acts as an incentive in free market economies, whereby in the absence of inequality, elements of economic stagnation and lack of enterprise would emerge. Conversely, income inequality is criticized on the basis of introducing contributing towards the development of key problems in the society, including progression of poverty levels. This paper seeks to explore the concept of income redistribution and its key pros and cons.

This research also shows that economic growth, on average, raises incomes for both the rich and the poor. It helps to lift the poorest in society out of absolute poverty and does not automatically increase inequality. More importantly, no country has managed to lift itself out of poverty without integrating into the global economy.