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effect of income inequality essay
couse of inequality and poverty in developing countries
effect of income inequality essay
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Introduction People are expected to have a peaceful life; full of fun and learning from the experiences that they participate in throughout their life. This is an ideal expectation that every human-being would like to achieve, but the world today has many problem that block people from achieving what they expect to achieve. The problem that people facing is income inequality. It is a big problem that creates an impact on every person and every nation. According to the article “World Economic Trends in the Distribution of Income, 1965-1992”, it said “the majority of the world’s total income inequality is between-nation inequality, not within-nation inequality (Korzeniewicz & Moran, 1997)”. The statistic of Glenn Firebaugh (2000) also shows …show more content…
This means that the inequality of income within a country is a smaller problem compared to the inequality of income between nations. People are coming up with three categories to classify the levels of income inequality between different countries around the world. This category focuses on the economic development of each country. They are the high-, middle-, and low-income countries. Since the income inequality occurs in every country in the world, people are coming up with a question about the effect of the income inequality. Does the income inequality affects the life of people? The answer to this question is yes, because there is a lot of studies that are related to the income inequality and the people from different parts of the world. Many of these studies also provide some evidences and trends on how income inequality between countries …show more content…
It make low-income country becomes poorer, while it only creates a smaller impact on the rich nation. According to the article from (Kawachi et. al, 1997), they are examining the relationship between the income inequality, social capital, and mortality in the high-income nation, United States. They study and analyze data from 39 states of the United States and conducted a survey. Their data support the idea that income inequality leads to an increase of the motility rate by a disinvestment in social capital. They define a social capital as the features of social organization that help people collaborated for mutual benefit. The data show that as the income inequality rise, the mortality also increases. This Source would provide a good data about the effect of mortality in the high-income
Briefly state the main idea of this article: The main idea of this article is that economic inequality has steadily risen in the United States between the richest people and the poorest people. And this inequality affects the people in more ways than buying power; it also affects education, life expectancy, living conditions and possibly happiness. Another idea that he brought up was that the American government tends to give less help to the unemployed than other rich countries.
Income inequality damages everything in a society from economic growth and democracy to minorities and education. Economic growth is limited during economic inequality because the majority of the gross national product is owned by the 1%, because of this the 99% does not have as much income leading to less spending which puts a limit on economic growth. Democracy is also strained as many wealthy families use their money to influence political parties to work on their half by making ‘donations’ of huge amounts. Minorities are effected as they do not have as many opportunities as whites do, especially males and often have higher poverty levels, they are even more restricted when their income is low because of the income inequality Even education is unobtainable for certain families because of the income inequality in the United States, because their income is limited and college tuition has increased dramatically over the last couple of decades they are unable to obtain a college education and are forced to work low skill level jobs. They may even have to drop out of high school to pursue a job for financial
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.
Richard Wilkinson opened his Ted talk with the chilling statement, “I think the intuition that inequality is divisive and socially corrosive has been around since before the French Revolution” (Wilkinson). With this opening, he states that his Income Inequality Hypothesis is not new, but the way we can evaluate the evidence has changed. Now, we can look at the evidence behind this hypothesis and directly see what inequality does to our society. Wilkinson explains these dangers in his Income Inequality Hypothesis. Wilkinson’s Income Inequality Hypothesis states that societies with more equal distributions of incomes have better health, fewer social problems, including drug abuse, mental illness, teenage pregnancy, and obesity, etc., and are more cohesive than countries with a wider gap between the rich and poor.
Income inequality not only harms us fiscally, but also affects our mental and physical wellbeing; therefore, it is important to identify the right ways to control wealth distribution among people.
Recently, studies have shown that income inequality has many connections that have caused the gap in the United States. According to the research I found, income inequality is connected to corruption, trade, wages of workers, and education. The world income inequality had declined since the twentieth century according to the studies found (Clark). Corruption falls increasing on low income individuals more than higher income individuals. Additionally, the trade theory suggests that the free trade might have level up the income inequality higher within countries by the different patterns of wages and demand for workers who are skilled and unskilled (Silva and Leichenko). Moreover, the education of wealthier people has it easier because the learning efforts of education are unbalanced. Besides, income inequality in the United States is hurting our economy due to the all the issues of corruption, trade, wages, and education. Suggested by Robert H. Frank article called “Income Inequality: Too Big to Ignore,” the income inequality is bad for our economy (Frank).
“Income inequality refers to the extent to which income is distributed in an uneven manner among a population. In the United States income inequality is the gap between the rich and everyone else which has been growing markedly by every major statistical measure for approximately 30 years” (Aguiar 2013). Wealth inequality has a close relationship with income inequality due to the nature of not needing a sizeable income because of wealth that was handed down for generations. The supposed problem doesn’t originate from the slogan, “The rich is getting richer and the poorer are getting poorer”
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 income gap in America has been increasing steadily since the late 1970’s, and has now reached historic highs not seen since the 1920’s (Desilver). UC Berkeley economics professor, Emmanuel Saez conducted extensive research on past and present income inequality statistics and published them in his report “Striking it Richer.” Saez claims that changes in technology, tax policies, labor unions, corporate benefits, and social norms have caused income inequality. He stands to advocate a change in American economic policies that will help close this inequality gap and considers institutional and tax reforms that should be developed to counter it. Although Saez’s provides legitimate causes of income inequality, I highly disagree with the thought of making changes to end income inequality. In any diverse economic environment, income inequality will exist due to the rise of some economically successful people and the further development of factors that push people into poverty. I believe income inequality e...
Income inequality is not necessarily harmful to our society because if the rich is getting richer they are able to invest more of their money to create business which will lead to more employment of people in the lower and middle class. A topic we also discussed in class was about the income mobility. The idea behind income mobility is that the poor does not always remain poor. People who were poor in the past are usually not poor later on in the future because the size of the economic pie increase too. People may think that the rise of income inequality is bad, but I do not really think it is as bad as many make it out to be. A solution should be put in place for a better distribution of the wealth, but I do not believe it should really be a concern because it seems to be something that will always exist. Even though income inequality exist or even if it is rising, people are better off today than they were before. The middle and poor class as discussed in class are getting a smaller peace of the pie, but it is larger that before, and with income mobility, the poor keep pushing forward regardless of the rich getting richer. Income inequality is a debated subjected, and I believe it will always be a debated subject. However in this class, so far, I have leaned that income inequality is not such as a bad thing as people make it sound. Income inequality has two side
Although globalization induces worldwide inequality in many aspects such as educational inequality and income inequality, the most serious one is income inequality since it exacerbates the wealth gap and consequently causes severe social problems. The world GDP has risen from 36 percent to 55 percent since 1980 as a result of the expanding world trade caused by globalization (Lall, Jaumotte, Papageorgiou & Topalova, 2007). Global Domestic income has increased, but the income distribution across the continents appears to be unequal. For instance, in the United States (U.S.), among the income distribution, the bottom 20 percent have an income boost of only 3.7 percent while the top 5 percent enjoy an income boost of 57 percent (Kearney, 2014). Furthermore, this widened wealth gap makes the people in poverty become poorer and has resulted in many serious social problems. According to Thorbecke and Charumilind (2002), the crime rate may become higher since “legal wages represent the opportunity cost to crime”. Also, because the level of income has a positive and explicit correlation with the health condition, the poor’s average life expectancy may become shorter. Therefore, the income inequality is severe since it increases the wealth gap and gen...
Income inequality refers to the amount to which income is distributed in an uneven manner among the population. In the United States, income inequality has been growing strikingly for some thirty years. Income includes salaries, interest on a savings account, dividends from shares of stock, rent, and profits. According to the Census data, the middle
High level of income inequality causes a social cost to the society. This is because it undermines a person’s educational and career choices and as such their efforts are deviated into certain social vices like corruption, nepotism etc
Inequality is a broad term that could relate to many aspects of life, this essay will focus on the inequality of wealth. Inequality is the spread of wealth among the citizens of a measured nation, in this case the United States. The United States currently leads the developed world in inequality, which has sparked debate among scholars. Although I do not believe that all inequality is bad, I do believe that its growth needs to be monitored.
Income inequality has been a big factor for many years; Americans hold the wealthy, mostly responsible because of their irresponsible obligations of the economy, stimulated to some degree by rising inequality. Taxing the wealthy does not seem to be the most undeviating resolution to these problems, however putting the economy back on track through justifiable growth does. Americans support guideline laws, job development, fair pay, and education opportunities. Mostly Americans care about opportunities, previously stated, and not income inequality, which was the wrong route to go down. Inequality can itself twist incentives and limit opportunities. This income inequality eventually leads to recessions and depressions. The non-awareness of Americans for income inequality is from chasing opportunities that are not there instead of standardizing the income
Income inequality continues to increase in today’s world, especially in the United States. Income inequality means the unequal distribution between individuals’ assets, wealth, or income. In the Twilight of the Elites, Christopher Hayes, a liberal journalist, states the inequality gap between the rich and the poor are increasing widening, and there need to have things done - tax the rich, provide better education - in order to shortening the inequality gap. America is a meritocratic country, which means that everybody has equal opportunity to be successful regardless of their class privileges or wealth. However, equality of opportunity does not equal equality of outcomes. People are having more opportunities to find a better job, but their incomes are a lot less compared to the top ten percent rich people. In this way, the poor people will never climb up the ladder to high status and become millionaires. Therefore, the government needs to increase all the tax rates on rich people in order to reduce income inequality.