The Importance Of Economic Inequality In Indonesia

Inequality exists around us. One of the inequalities is the income received by a person or member of a family. This income includes wages, salaries, pensions, and interest derived from assets. Income inequality refers to the various income within a given population. This inequality is especially high in the United States.

Income inequality is assessed by using “Gini coefficient” (Gini, 1909) and it is one of the commonly used measurement tools across the globe. The Gini coefficient is normally explained by using Lorenz curve where the income of individuals are arranged from the lowest income level to the highest income level (Lorenz, 1905). A Gini coefficient with zero means perfect equality, whistle one or 100 percent means maximum inequality (Rogerson, 2013) . Based on income inequality measurement tool; Gini coefficient, Wilkins (2014a) suggests that there was a decline in Gini coefficient between 1994 -1995 and 1996-1997 by showing an inequality in Australian household income. On the other hand, between 2003-2004 and 2007-2008, the Gini coefficient increased

Income inequality describes the extent to which income is distributed unevenly among residents of an area. High levels of inequality indicate that a small number of people receive most of the total income, and that most people receive only a small share of the total. There are many advantages and disadvantages associated with the inequitable distribution of income.

Societies and their governments have developed different policy approaches to addressing domestic inequality. Compare and contrast two different countries and evaluate the effectiveness of their key policy measures in addressing inequality.

“The United States income inequality has risen drastically since the 1970’s and has not been this high since 1928.” Economic inequality is the unequal differences in how assets, wealth, and income are dispersed among the people and different populations throughout the United States. It is often described as the gap between the rich and the poor.

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.

First we must define what exactly income inequality really is and that is according to Definition of ‘Income Inequality’ (2015) said to be unequal income distributed to household or individual across the various participants in an economy. Income inequality is often presented as the percentage of income to a percentage of population. For example,

Income and wealth inequality refers to the degree to which income is unevenly distributed among people in an economy. The share of total income received by different groups measures inequality, this visually represented in the Lorenz curve. The line of perfect equality bisects the graph with the percentage of income

The specifics of policy choices are an important issue, and these choices can be analyzed thoroughly and theoretically. Economic inequality is the difference in numerous measures of economic security between individuals of a group, groups in a population, or countries. Economic inequality can also be referred to as income inequality. Bartels describes issues about economic inequality including how poorly some groups are represented. The poor are barely represented, if at all, because their lack of funds and resources usually only influence the majority of politicians to ignore the poor. When considering the poorer population, representatives do not even bother to consider the poor because some members of congress or senators might not believe that those certain low income groups do not have enough money to be acknowledged. There is a definite political unfairness because of how unevenly certain income groups are

Inequality.org states that Income inequality is the unequal distribution of a household or individual income across various participants in an economy. It is the percentage of

Economic inequality can be defined by the unequal access to economic resources, in the form of opportunities, wealth, capital, land, etc., which determine the individual’s or the group’s level of power. Generally speaking, individuals and groups with high access to resources have high levels of vertical and horizontal power, which in it turn generate more access to resources and power. The unequal access to economic resources is institutionalized within a society. Thus, economic inequality has far reaching effects and manifestations in other social and political institutions. In addition, with increasing role of global economy on national economies, and the increasing inequality in the global market, which is reflecting on increasing inequality in it turn increases inequality within nations. Thus, the interest among political economists has increased in an effort to understand stratification and to create policies which aim to elevate economic inequality globally and nationally.

This imbalance has not been seen since before 1917 and during the Great Depression, when inequality peaked. Additionally, income inequality is on a continued trend towards a further disproportion. Evidenced by the Gini Index, a “standard economic measure of income inequality” (7) where a score of 0.0 on shows a perfect equality in income distribution and a score of 1 means one person takes all of the income, the United States has one of the highest of income disparities of the 35 members countries of the Organisation for Economic Co-operation and Development (OECD) (10), at 0.469 on the Gini index (8). The UN indicates that a coefficient of 0.4 and above is a predictor for social unrest and above 0.5 indicates a severe gap between the wealthiest class and the working

This essay will discuss if current income distribution has a negative impact in the society because of the inequality that exists. What is income distribution? It is how a national income is split between different groups. Rights theory worries as the name says it, about people rights, and action is good if it respects the people’s rights. There are two kinds of rights, positive and negative. The first one relates to the right that people have to entitlements, is also known as Welfare (food, shelter, healthcare). The second one is negative rights, it is associated with the right that a person has not be subjected to an action from another group or person.

Gini coefficient, as a dependent variable, is used to measure income inequality for grouped household income. It is calculated across the grouped sixteen using census data for 1989, 1999,

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).