Income Inequality

In Income Inequality: Too Big to Ignore, Robert H. Frank paints a picture to the reader about the struggles of pier pressure. For example: an upper-classmen chooses to buy a big house and fancy clothing. This acts as a “frame of reference” to the changes and norms of the society. If he spends money on something nice, a middle-classmen will then go and decide to do the same thing, and then a lower-classmen…all the way down the social hierarchy. This is what he calls an “expenditure cascade.” Robert relates this with a person’s downfalls, which can be traced due to lower income inequality. Income inequality basically means that in a given quantity, the dispersion of income is underlined by the gap between individuals and or households with

Executive Compensation. I’m in agreement with Thomas Piketty that the one cause of rising inequality in the United States “the rise of supersalaries” for top executives (Piketty & Goldhammer, 2014, p. 298). The average American estimates CEO to worker pay ratio at about 30-to-1, which is more than 4 times what they believe to be ideal. The career review site Glassdoor reported from 2014 data that the average pay ratio of CEO to median worker was 204-to-1 and that at the top of the list, four CEOs earn more than 1,000 times the salary of their median worker with the very top pay ratio of 1,951-to-1. In some cases a CEO makes in one-hour what it takes the average employee six-months to earn. In comparison, the Washington Post reported for the

The issue of income inequality in the United States is complicated and does not have a definite answer. Income inequality can be measured in a few different ways. The first measurement for the income inequality in a country is to look at the percentages on households and group them into income categories, called distribution by income category. The second measurement for income inequality is called distribution by quintiles or fifths. This is when you divide the total number of people, households, families into five groups called quintiles to examine the percentage of total before tax income received by each quintile. Each quintile would then be ordered by income and households in the category.

Income Inequality is a major problem that has been going on in America for decades. Many people feel that it barely exists today, but those people are very uneducated and don’t really care about the huge problem in front of them the many people that feel that way are highly uneducated, and seem to not really care about which has been gradually increasing instead of decreasing. Unfortunately, there’s not much that can be done, only of course if the poor class of people decide to actually educate themselves and get a higher education. One says poor class, simply because that’s how they’re classified. There are five types of levels that Americans are classified as, and they are: Upper Class, Upper Middle Class, Middle Class, Working Class, Poor. The highest percentage of Americans fall in the Poor department, and it has been that way for decades, and will continue to be that way for decades to come.

Income inequality is increasingly becoming a significant concern for many countries around the world. The income difference between the highly-educated, skilled, wealthy class and the poor, low to mid-skilled workers is growing larger and larger. In fact, the incomes of the rich are increasing significantly, while the low skilled workers’ incomes have been declining (The Economist, “Wealth Without Workers”). According to The Economist, real median wages have been decreasing since 2000 in half of the member countries in the Organisation for Economic Co-operation and Development (OECD). In the United States, there was a 4% increase from 1980 to 2012 in the share of national income that was distributed to the top 0.01% (The Economist, “True Progressivism”). Canada is facing a similar problem of rising inequality.

The U.S. is the land of opportunity, but why will so many not achieve the American Dream? There is no doubt a difference exists between the rich and the poor. The most common words to describe social class are the upper, the middle, and the lower class groups of people . U.S. News (Francis) states 46.2 million people, approximately 15 percent of the U.S. population, currently live below the poverty line (Francis). Unequal income distribution contributes tremendously to poverty by making the rich, richer and keeping the poor, poorer.

Corporations and businesses should take responsibility in devising multiple solutions that help society as a whole. In Joseph Stiglitz’s essay “Rent Seeking and the Making of an Unequal Society” shows the corruption of wealth inequality in society. While, in Ethan Watters’ essay “The Mega-Marketing of Depression in Japan” shows the corruption of Western pharmaceutical companies shaping culture to market depression in Japan. [Drug marketing is a big problem in today’s society since big firms neglect their obligation to share the profits with others in society. Both Watters and Stiglitz offer objections to the economic markets in America as unjust due to market competition, false marketing techniques, opposition to cultural or income differences,

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).

In-depth research on inequality highlights the problematic reality that the average American employee has not seen increases in wage benefits from the U.S.'s productivity gains much like top income earners have. Rising inequality in the United States has been noted as the growing divergence between growing productivity and the flattening of average wages since the late 1970s (Citation). The average worker's compensation only grew by 8% from 1979 to 2009 despite an 80% increase in productivity (Sylla). Meanwhile, wages for top percent of income earners have been growing at a disproportionally higher rate than productivity. C.E.O.s from big companies went from earning about twenty times more than their average employee in 1965, to earning about

In 1950’s decades, the prevailing view was that the propensity to save of the rich is more than the poor. Thus the higher income inequality leads to higher savings, hence leads to increase the rate of investment and growth (see Kaldor (1957), Kuznets (1955)). More recently, Tabellini and Persson(1994) argue that inequality hurts growth through the median voter who enacts redistributive taxes. By contrast, St. Paul and Verdier (1993) show that redistributive taxes can boost growth if they are transferred to education or public goods. Another study presented by Barro (2000) assesses the relationship between Income Inequality and growth in a panel by using annual data set from 1965-1995. He studies the interaction of the Gini index and the initial

Societies are becoming more interdependent as their economies are becoming more integrated (Margalit, 2012). Issues of income inequality, poverty, environmental concerns, and human rights abuses have emerged as a result of the interdependence (Crane et al., 2013). Specifically, income inequality has been blamed for poverty in various countries around the world, spurring arguments that improving the standards of living of communities should be the responsibility of any actor with the ability to eradicate poverty, and not just governments (Crane et al., 2013; Dahan & Raelin, 2015). The argument puts pressure on MNCs to take an active role in addressing the concern in communities where they operate. There is a theme in extant literature that

You would think that when it comes to carrying your own weight that one would take pride in it and get it done. Well that is simply not the case all the time. In the world of taxation, the people who are getting affected the most are the more wealthy people. Most wealthy people carry their own weight and also pick up the slack of most poor people. For example, taxes pay for government programs like Food Stamps, WIC, Welfare; just to name a few. Not all poor people can help what their income looks like and must play the hand they are dealt, but there are many poor people who just wants things handed to them. Income inequalities are no stranger to the block and have been around for ages. On one side you have the wealthy people who want their

One of the impact of income inequality within the labor market is the employment levels within the labor market and how it affects the contribution of men and women within the labor markets of SSA. For instance, the unequal treatment between men and women which is differ from country to country within Sub-Saharan Africa. Some countries in this century are still using the old system for example leaders in that particular country (Kenya; Botswana and in Malawi) if they get retired then someone who is related to the leader has to take over the position in the society. As a result, this shows income inequality through gender is being practiced within the working environment and it likely increases income inequality. Some scholars found that gender

1. How do you define economic equality? For example, is economic equality simply making sure everyone has equal income, or is it enough to provide all equal opportunity to earn income?

When you look closer at what is happening in our society, it is clear that GDP growth has failed to deliver. For example, while GDP roughly doubled between 1980 and 2007, the distribution of all that money has left us more unequal today than at any time since the 1920s. GDP, in other words, tells us nothing about how national income is distributed, and it ignores the negative economic consequences of