Inequality Vs Economic Inequality

Middle-class workers can no longer compete for the those positions of high rank as the education becomes too expensive and too strenuous, therefore they must maintain their current position or risk falling victim to poverty. Following generations are further affected by such a cycle; those born into wealth inherit the private property, but those who are born into the low-income family have less opportunity to overcome the existing gap.

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

In today’s capitalist economy, where economic transactions and business in general is centered on self-interest, there is a natural tendency for some people to make more than others. That is the basis for the “American Dream,” where people, if they worked hard, could make money proportional to their effort. However, what happens when this natural occurrence grows disproportional in its allocation of wealth within a society? The resulting issue becomes income inequality. Where a small portion of the population, own the majority of the wealth and the majority of the population own only a fraction of what the rich own. This prominent issue has always been the subject of social tension

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.

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.

The land of freedom, the United States, is the Promised Land for all. Its citizen can be much as prosperous as they want. Nonetheless, a phenomenon has occurred gradually that has changed the economy, social levels, income, and wealth of all Americans. This is called inequality. Inequality has become a social problem since people has not raised their voice take advantage of voting, large corporations as CEOs who take instead of give.

In any given population, there is a difference between what people within the population earn. The uneven distribution of income in any given population is income inequality. In order for there to be income, there has to be several sources of income. These sources of income may be combinational or independent per person receiving the income. Income may result from wages, rent, bank account interests, salaries or even profits made in business transactions ( Stiglitz, 2012).

In this paper I will be discussing the wealth gap. I will also be discussing if there should be a “special” tax to redistribute the wealth. I hope to enlighten the reader of the issue of the wealth gap, and if a tax would help.

The American Dream remains alive and well however due to income inequality it has failed to become a reality for the overwhelming majority. The fact that all politicians today still agree that income inequality is a major problem in the United States, shows that there persists an overwhelming need for better methods than the ones that have been tried in the past. Politicians, in their quest to win elections, emphasize the failure of our economic system to bridge and close the gap between the rich and the poor masses. The implantation, by governments, of various economic theories postulated by the great economic minds

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).

According to the OECD, the term inequality in the opposite of equity can be defined as evenness

Capitalism has been the central force behind the growth of the United States’ progressive economy. Within such advanced economic system the chances of economic disparity are significantly high. In fact, over the past three decades there has being a steady increase in unequal wealth distribution among the economic classes. To sustain the current unequal wealth distribution among the classes of the American population, there are numerous factors that influence and shape this trend. For some members of the population it is alarmingly disturbing to know that recent statistics have shown that, “In the US [alone] the wealthiest 1% of its population owns more than the bottom 95 %” (Gutman). As for the difference in economic wealth, it resulted

Income inequality has been a major issue in American history. There are many different factors that contribute to inequality. These include education, wealth, discrimination, ability, and monopoly power.

In regards to inequality, Bhagwati argues that the inequality, which has further been perpetuated by economic globalization, is not a negative occurrence. . Critics of globalization usually point to inequality as a reason to present objections to globalization, however, Bhagwati argues that inequality is not bad at all. Even though economic globalization via trade and corporations will generally benefit the country and lead to an increased GDP , some individuals will attain significantly way more financial reimbursements than others. Bhagwati is against poverty but not inequality. Bhagwati says “inequality is accepted because it excites not envy but aspiration and hope. Capitalism’s inequalities then become tolerable, not because the rich deny themselves self-indulgence but because they make the poor fancy that these prices may come to them someday too ”. Thus, inequality inspires people at the bottom end of the socio-economic status to work hard and achieve living status mobility. Another reason why Bhagwati supports huge levels of inequality is because it will lead to Altruism, hence a better society . If the inequality gap is not very high, people who have money will spend it on themselves and their never ending desires rather than help poor people members of society achieve class mobility . He referred to Bill gate to illustrate this point. The fact that Bill gate had billions and billions of dollars was what made him give his money back to charity, hence

Economic inequality has been a long-debated issue within the social sciences. The origin of the most recent debate has roots in Karl Marx’s works during the 19th century. Since Marx, the equality of distribution has become a heated topic in a wide range of social science from economic to social and political. Marx saw the growing inequality and poor working conditions in the beginning of the 19th century as a never-ending process of infinite accumulation of capital. This literature subsided due to the improvement of working conditions