Income Inequality Of The United States

Decent Essays

The United States is often viewed as a wealthy and stable country, but as shown in 2011, “the richest fifth of American households received about 51.1 percent of total income, while the poorest fifth received about 3.2 percent” (McConnell). There are many sources of income inequality that effect poverty in the United States and the role that discrimination plays in reducing and increasing wages for different people and how the people of the United States are affected by it.
The average household income in the United States is, in fact, one of the highest in the world. Unfortunately, does not provide information about income inequality. There are two ways to measure income inequality: distribution by income category and distribution by quintiles. Distribution by income category involves looking at the percentages of households in a series of income categories. Distribution of quintiles involves dividing the total number of households into five equal groups or quintiles and to compare it with the percentage of personal income. The Lorenz Curve is a way to display the quintile distribution. In a graph showing the Lorenz curve, there is one straight, up-sloping diagonal line that represents a perfectly equal distribution of income, and a second curve of the actual quintile data that becomes the Lorenz curve. The space in between the two lines represents the amount of income inequality there is. This information can then be converted into a Gini ratio which is the numerical