The Importance Of Income Inequality In South Africa

Income inequality is on the rise and it is evident in most cities throughout the United States. There are individuals with six to seven figure incomes and then there are individuals whose income is just enough to get by. The middle class is not as prominent as the upper and lower class. This should be the other way around. There should not be so many cities with very wealthy neighborhoods right next door to low class, rundown neighborhoods, with little middle class households. Digging deeper, 47.6% of the money in the United States belongs to individuals that receive $98,200 or more (“Distribution of U.S. family income”, 101). The middle class should be much more noticeable with the upper and lower

It is a commonly accepted that inequality is increasing throughout the globe, with startling statistics such as the recent Oxfam report indicating that the richest 85 people in the world own more wealth than the poorest 3.5 billion people(Oxfam Australia Media, 2014). Inequality is thought of as disparities or gaps, such as the distance between a low income and a high income household, or the ratio of their incomes (Divided We Stand, 2011). Domestic inequality refers to inequality within a country and

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.

Wealth inequality is a controversial topic because money distribution in America doesn’t ‘seem right. The upper class possess most of the wealth in America and the bottom don’t nearly get as much.

According to the CIA’s World Fact Book, the United States now ranks 39th in the world when it comes to income inequality. What that means is that only 38 percent out of 136 countries have less equitable distribution of income than the U.S. The financial gap has been widening.

According to a recent article, it is estimated that “in America, the wealthiest 160,000 families have as much as the poorest 145 million families (Matthews, 2015).” This translates to the top 1% of the U.S. population having as much as or more wealth than the bottom 99%, which is quite drastic. Gilson further emphasizes this fact, noting, “A huge share of the nation's economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household... (Gilson, 2011).” Furthermore, “The average income for the bottom 90 percent of us is $31,244 (Gilson, 2011).” =======================

The question “Why is there so much poverty in the United States?” has such a broad spectrum of issues. There is no simple cure or single cause of poverty. As of 2016, the top 20% of Americans owned 85% of the country's wealth and the bottom 80% of the population owned 15%. How is it that 400 people hold more wealth than half the population of the United States? Throughout this assignment I will be discussing the unfair distribution of wealth and through the data I collected finding the best route for equality for all.

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).

“Income inequality has no necessary connection with poverty, the lack of material resources for a decent life, such as adequate food, shelter, and clothing. A society with great income inequality may have no poor people, and a society with no income inequality may have nothing but poor people” - Robert Higgs. When people think of income inequality they picture poverty and people not having basic necessities. However income inequality is not just a connection to the poor. Income inequality is strongly affected by education attainment, technology, and gender.

What exactly is wealth disparity? And why does it matter? Using terms such as distribution of assets would give the idea that we live in a socialistic economy. This word seems to be a Taboo in America, but people don’t realize that we are very close to this concept. It is just hidden better. There are many reasons that this disparity needs to shrink. Studies that will be discussed later, will show a correlation of the number of citizens that reside in poverty: crime rates are higher, more children go hungry, and the overall health of the population is affected. Although there are many arguments that will contradict this assessment, there is no disputing the facts. People need to remember that those of us that are fortunate to be rich,

In developed nations income inequality has also drastically increased. For instance just recently in the United States, the richest americans (the top 1%) made 19.3% of all the United States income, which is the most drastic income gap since the twenties. “The top 1 percent of U.S. earners collected 19.3 percent of household income in 2012, their largest share in Internal Revenue Service figures going back a century” (Paul Wiseman). Both developed and developing nations are having major issues dealing with income

Public opinion is at the root of all change in our Government. One issue that needs addressing is the income gap that we have in this country. Some believe that the gap between the rich and the poor is killing the middle class and for the economy to thrive, we need a thriving middle class. Others believe that the income gap is not killing the middle class and that things will naturally sort themselves out. To come to a consensus on public opinion, political scientists administered the General Social Survey from 1976 to 2010. With its data, we can further our understanding of why people either support or do not support reducing income inequality.

Saez presents his credible data through the use of ethos. Saez is a well-known economics professor who devotes time to publish reports about the income inequality in America. Although his reports are strictly opinion, he uses enough historical statistics and actual facts to make his writing credible. Many historical theories lay a foundation that helps prove income inequality is necessary. Social Darwinism is a collection of theories that explain why the rich get richer, while the poor become poorer. Social Darwinists generally claim that the strong and successful people should see their wealth and power increase while the weak and unmotivated should see their wealth and power decrease. This is an excellent explanation for the cause of income inequality and why it shouldn’t be stopped. Wealth can sometimes be a direct result of the hard work and dedication of a person that is motivated to become successful in life. While most people may work as hard as they can and only make an average income, there are the few exceptional cases where people can prosper and rise to great economic stability. For all other citizens, the reality is they may be motivated and driven to become successful just like everyone else, but can only manage a low or middle class job. This reality

The distribution of income is the manner in which income is divided amongst the members of the economy. A more equitable distribution of income from work would lead to all individuals in society having a similar quality of life. This equitable distribution of income may be either positive or negative. Positive factors may include the poor being able to access better education and health care and avoiding the inequality of opportunity they may face. It also decreases and diminishes the poverty faced by individuals. The negative factors of a more equitable income include it having an effect on the economy by lowering the incentives for people to study hard and work hard to achieve a higher education and to get a higher knowledge based job and discourages innovation and people taking risks. Sweden has a fairly equitable distribution of income, its Gini Index is 23.0 a country with 0.0 would have perfectly equitable income. A Gini index is a representation of the income distribution between a nation's residents.

The way money is distributed within the United States is unbalanced, with the majority of the wealthy owning the bulk of the country’s wealth. Wealth can be defined as a person’s assets and monetary gains. This unequal distribution has caused numerous economic and geographical problems, such as how resources are divided among countries, how developed or industrialized a country is in relation to wealth distribution and the wide spread of disease and lack of medical attention due to an absence of money. In this paper I will address the negative and positive aspects associated with wealth distribution. I will explain how resource distribution contributes to an area’s economic growth. I will also discuss varying ways to measure wealth