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Effect of income inequality essay
Causes 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
What is wealth inequality? “It is the difference between individuals or populations in the distribution of assets, wealth or income.” [1] In sociology, the term is social stratification and refers to “a system of structured social inequality” [2] where the inequality might be in power, resources, social standing/class or perceived worth. In the US, where a class system exist, (as opposed to caste or estate system) your place in the class system can be determined by your personal achievements. However, the economic and social class that an individual is born into is a big indicator of the class they will end up in as an adult. [3] What are the effects of this wealth inequality in the US and what causes it as well as some possible solutions and their ramifications will all be discussed and answered below.
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.
There is also the damage that the inequality does to the society and the government. Thomas Jefferson once said, “The small landholders are the most precious part of a state.” Today that would mean that the middle class is the most important part of our society, however, the farther we move into the future the weaker the middle class becomes (Krugman, 587). The America that we live in is unequal in income and social aspects. The rich do not live the same lives as those that are less fortunate, and the less fortunate do not get to enjoy the perks that come with the lives of the rich people.
Wealth inequality did not always exist in human life. In fact, “Human life have not only been changed, but revolutionized, within the past hundred years” (Carnegie 1). There used to be
America in today's society is burdened with many economic and political problems that have begun to plague the nation. Controversial topics are constantly being debated from sunrise to sunset across the country with supporters and those who oppose each bearing various levels of financial and political misfortune. With the numerous economic and political problems that affect the nation, the argument over the issue of income inequality is one of the most notable. Creating a political civil war, proponents from both sides have brought the issue into national view and debate has grown substantially within recent years.
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.
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).
Ever since agriculture replaced hunting and gathering, the division of labor led to the creation of social classes and the division of land and unequal distribution of food surplus allowing inequality to flourish. Unfortunately, this has not only remained, but inequality has exponentially grown, making the difference between each social class quite noticeable. This distressing factor makes American economy highly unstable, and there is little to be done in order to fix this grave issue. It is only a matter of time before America’s economy comes crashing down. American economic inequality has been around for a long time, and it has become a monumental issue.
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
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...
Being born into an economically disadvantaged family causes dilemmas before the kid is even born. According to Gulick, “Economically disadvantaged students have it tougher before they are born because they have less prenatal care if any at all” (1). Because the babies do not even have the care they need before they are born they end up being born with things that aren’t good. “Children born into poverty have lower birth weights, and many suffer from hunger and poor nutrition. When the youth suffer from poor nutrition and low birth rates it causes many complications for the hospital staff, the babies family, and causes stress on whoever pays the medical bill because the baby possible has to stay at the hospital longer. Once the kid is born the dilemmas go on and on. So how does being economically disadvantage affect people?
The world contains a lot of societies, cultures, and classes. Each household belongs to some social class that represents their level of education, their work position, and their financial status. These different classes have created a conflict between people. It fills rich people's minds with the thought that poor people are criminals, and that conflict ended up with creating poverty. The authors Gilbert, Kahl, Magnet, and Gans are discussing the important causes and reasons that created poverty in comparing and contrasting these points with each other.
Inequality is known as the instance or condition of being unequal (Anon., 2003), therefore saying that inequality is when there are differences and when this is linked with the worldwide financial crisis, ‘it draws great attention to the world of the super-rich and the increases in inequality since 1980, which is returning the country back to a degree of inequality which was last seen around 1929 or maybe even 1913’ (Morrill, 2008). This demonstrates that inequality has been an increasing problem, but should this inequality affect us and affect us in the terms of health disparity?
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.