How Does Income Inequality Affect The Economy

Robert Reich explained to us, "Income inequality is inevitable and is essence of capitalism, but when the gap became too much, then it became a problem to the society. Today, the United States has the most inequality distribution of income of all the developed nation, the richest 400 Americans had more wealth than the bottom 150 million people put together"2. First of all, income inequality exist everywhere, it is not a problem for itself. Because of the income inequality, poor people know the life difference between people, then they will work harder and harder to catch up to get rid of poor, and to have a better life. The income inequality is a good thing when it is not much for is the source of power that make people to improve themselves.

In “Income Inequality: The Public and the Partisan Divide,” Blendon and Benson explain the issue of income inequality and the need to address it. The importance of explaining this problem provides insight for the people who are not educated about the topic, hopefully triggering more public awareness. Blendon and Benson support their opinion by discussing that the two major political parties in the U.S. agree that income inequality is a problem that must be recognized, but cannot come up with a synopsis on how to take care of it. Also, they describe how different perspectives cause different ideas for fixing the issue. Blendon and Benson explain how partisan views towards the role of government are one of the perspectives towards how the income

Although the United States is considered one of the best countries in the world, we still have many issues. One of the biggest ones being income inequality. In the United States, economic prosperity is not in reach for everyone. In the movie Inequality For All Robert Reich talks about how big of an issue income inequality is and the opportunities available to the average American.

There is no doubt that wealth inequality in America has been escalating quickly; the portion of total income earned by the top one percent has doubled since the beginning of the 1970’s. The wealthy are the main beneficiaries

This is a topic that had been lingering in the shadows until the Occupy Wall street movement made many take a good look at the inequalities that exist all across the board. Vidal states that “the outrage of Occupy was directed at the top 1 percent of the population, an elite class consisting mainly of investment bankers, corporate executives, and layers who currently own 35 percent of the total net wealth in the United States.” (Anderson pg 270) Vidal explains that in order for us to fully understand economic inequality we need to take a look at the stagnation of living standards experienced by millions of

Income inequality is one of the greatest problems facing the United States today. It is important for everyone to understand what this means and why this is a problem.

Wealth inequality is already shaping American politics and society, and has the dangerous potential to be the defining problem of the upcoming generation. A sizable cause for wealth inequality in America is a dire lack of

Income inequality has been a rising problem in the United States for the past few decades. One of the main issues surrounding this years is election, especially for the Democratic candidates is income inequality and how to address it. Public opinion on income inequality and the government’s role in changing it can easily shape how the election turns out this year which can make great differences to the lives of American’s for years to come.

Introduction: Impacts of income inequality affects the overall progress of economies in different ways. Economists have been focusing on to determine the relationship between the growing inequality and economic growth over the years. Chris Tilly is one of the researchers who has made an attempt to investigate this issue by analyzing several theories and providing examples. He is currently a professor in the Urban Planning Department at UCLA and a member of Dollar and Sense, popular economics journal, as well. His article: “Why inequality is bad for the economy: Geese, golden eggs and traps” published in Wealth Inequality Reader in 2004. According to Tilly, inequality has a negative outcome on the economy while equality is the trigger for growth.

Income inequality has affected American citizens ever since the American Dream came to existence. The American Dream is centered around the concept of working hard and earning enough money to support a family, own a home, send children to college, and invest for retirement. Economic gains in income are one of the only possible ways to achieve enough wealth to fulfill the dream. Unfortunately, many people cannot achieve this dream due to low income. Income inequality refers to the uneven distribution of income and wealth between the social classes of American citizens. The United States has often experienced a rise in inequality as the rich become richer and the poor become poorer, increasing the unstable gap between the two classes. The

The highest earning fifth of U.S. families earned 59.1% of all income, while the richest earned 88.9% of all wealth. A big gap between the rich and poor is often associated with low social mobility, which contradicts the American ideal of equal opportunity. Levels of income inequality are higher than they have been in almost a century, the top one percent has a share of the national income of over 20 percent (Wilhelm). There are a variety of factors that influence income inequality, a few of which will be discussed in this paper. Rising income inequality is caused by differences in life expectancy, rapidly increases in the incomes of the top 5 percent, social trends, and shifts in the global economy.

Today, the average income of the richest 10% is 14 times that of the poorest 10% in the United States. Famous economist Milton Friedman argues that this inequality gap would eventually spur people to work harder and boost productivity. Others, who are not that optimistic, argue that the income inequality leads to a growing level of inequality of opportunity. For that reason, six in 10 Americans now say that only a few people at the top have an opportunity to advance. Looking at both of the perspectives, we see that different people’s attitudes towards fairness and equality are different. However, it still does not change the fact that income inequality is not at the desired range to have positive consequences, which makes it a huge problem. A recent study points out that different economic systems function best with different levels of inequality and under current circumstances, the inequality range that will lead to positive consequences for the U.S. economy is between the Gini coefficients of 0.25 and 0.35. This is an efficient range, because it addresses notions of fairness that have been supported by each side.

First of all, although the U.S. Constitution proffers equal rights to all, money is the source of power. Consequently, when a person owns more money and they have skills that others don’t, they usually come on top begetting power and great influence in the world. Although there are many different branches of inequality, two inequalities focused in this paragraph are social inequality and economic inequality; which are closely related to one another. Furthermore economic inequality is the difference found in various measures of economic well-being among individuals in a group, among groups in a population, or among countries. To put it simply, economic inequality is the difference in wealth of the people and of the world. Also, social inequality is the existence of unequal opportunities and rewards given for different social positions or statuses within a group of society, meaning those with power and money are open to paths with more opportunities and rewards while others are only given so much opportunity, but no person should

The business mind-set in the United States has shifted from one committed to the virtuous cycle to one dedicated to the neoliberal principle that the market has no social responsibility whatsoever (Smith, 2012). The new business model has the sole goal of increasing dividends for stockholders, even at the cost of laying off many American workers. Despite the financial success of the county’s super rich, it appears that too much inequality is bad for the entire economy. This paper will explore the ways in which economic inequality compresses growth, which ultimately harms the economy. The current dynamic between politics and economics in the United States has led to this inequality because it produces regulations that do not generate new wealth,

Another major impact of economic globalisation is the increase in income inequality and poverty. Despite the increase in the global economy and more jobs, it does not necessarily mean that there is global equality. In fact, the gap is increasing between the economic classes of rich and poor. The Gini Coefficient is a statistical measurement that measures the inequality among the levels of income. Low inequality lies between 20 and 40 and high inequality lies between 40 and 66. Despite Asian countries such as Indonesia, India and China reducing poverty levels, the income inequality is still significantly high with India sitting on 34 Gini points, Indonesia on 40 points and China on 45 points (Keeley 36). This high rate of income inequality can be seen as a result of strong economic globalisation in urban areas, whereas rural areas remain the same. An example mentioned in Income Inequality: The Gap between Rich and Poor highlights how the inequality in China and India includes access to healthcare, jobs and education because of economic globalisation (Keeley 37). Income inequality is a result of economic globalisation which boosts the wealth and income of the rich upper class, whilst leaving the lower class to struggle and find other methods to gain income, such as working in factories and being exploited through human trafficking.