...Economic Inequality in the United States According to the Gross Domestic Product, also known as GDP, United States was measured the “largest” economy in the world (Mahoney 10/27/2015). However, all Americans do not share the high standard of living in the U.S. Levels of income and wealth inequality have always been high in the United States. While it is ideal for a democratic country like the United States to have political equality, the reality shows that this is not the case; as economic inequality ultimately causes political inequality under the current system of government. Income inequality has not only been prevalent, but has been polarizing further since the 1970s. Currently, twenty-percent of the population takes home 50% of the total income and the top 1% takes home 25% of the income and owns 40% of total wealth (Mahoney, 2015 October 27). While CEOs of the Fortune 100 makes over $14 million a year, an average worker makes $45,230 a year; this is a clear illustration of the income disparity in the United States. Further, it is worth mentioning that such trends are not necessary common; the United States has always had higher levels of income and wealth inequality when compared to other rich democracies (Mahoney, 2015 October 27). The average household income is currently stagnant, which suggest that the average household cannot easily grow economically in the U.S and cannot help close the income inequality gap. In the movie Inequality for All, the manager of Circuit...
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...You might’ve heard that economic inequality in the United States has been rising with the richest 1% of its population percent of the countries annual income.The USA is much higher than in any other developed country in the world including the United Kingdom ,Germany Japan and etc but why is this a problem with the best majority of economist. An international organization quality is bad economy one reason being that it limits opportunities for people with lower incomes to get the education and also it is because consumers to buy the goods and services being produced or business. Service is being produced or business it would go bankrupt but it’s not like the very rich are going to buy 1 million thousand watches.Instead they land a large...
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...Of all industrialized and advanced, countries the United States has the most unequal dispersion of income. At a time of significant economic inequality, those with more money should pay more tax than others who make less than half of their earnings, progressive taxation. The gap between CEO pay and the pay of the typical workers has risen dramatically since the Great Recession, as shown in the movie Inequality for all, the typical male worker in 1978 was making approximately $50,000 as to where the typical 1% was making about $390,000 and by 2010 the typical male worker was earning less then he did then where the person at the top earned more than twice as much as he did before. As said by Robert Reich “instead of eliminating the tax on rich people, we should increase it back to level it was in the late 1990’s” due to the fact being that the economy did well back then. When the division between both classes progresses over a precise aspect, it...
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...Anthony Giovenco Political Science Inequality Paper 12-18-14 The Effects of Wealth Inequality in the United States Wealth inequality in the United States has grown tremendously since 1970. The United States continuously reveals higher rates of inequality as a result of perpetual support for free market capitalism. The high rates of wealth inequality cause the growing financial crisis to persist, lower socio-economic mobility, increase national poverty, and have adverse effects on health and well being. 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 regarding income inequality. In the latest consensus of wealth distribution, the top one percent of Americans owned thirty five percent of the nations private wealth, and the top ten percent took home about fifty percent of all income in 2012. This figure is greater than the bottom 90 percent combined. The question commonly asked concerning this matter: How and why is this becoming so quickly unequal is to be examined. First, we must explain what is meant by the term “wealth.” Wealth is the collection of the assets people own. This includes homes, stocks, savings for pension, and bank accounts, minus all existing debts. The main issue regarding wealth inequality is income inequality. Income equality has grown increasingly in the past 30 years....
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...Running head: INCOME DISTRIBUTION IN THE UNITED STATES Income Distribution in the United States and the Lorenz Curve 1 Market economies are favored and well-known for generating macroeconomic growth and progress in industrialized nations, such as the United States. Numerous academic studies and economic research have been done not only to measure economic growth, but also to analyze any disparities in income distributions among the general American population. This paper will examine trends and patterns of American wages since the 1970s, focusing on shifts in income distributions to see if these shifts can be interpreted as income inequality across different sectors of our society. Furthermore, this paper will study two important and interlinked methods of measuring income inequality, which are the Lorenz Curve and the Gini Coefficient Index. The Executive Branch of our federal government and the U.S. Congress keep a close eye on income distributions throughout the entire nation. These bodies rely heavily on data collected and analyzed by non-partisan agencies such as the U.S. Census Bureau, the Internal Revenue Service (IRS), the U.S. Bureau of Economic Analysis, the Congressional Budget Office (CBO), and academic institutitions that provide data and statistical analysis to assist in economic and budgetary decisions made by elected officials concerning a wide array of policy issues such as taxes, social insurance programs and other issues that impact the overall economy...
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...Inequality begins its roots as long ago as humans started roaming this earth. Inequality can be described also as an imbalance, and with such an imbalance in terms of income, wealth, and class prosperity comes income inequality. Income inequality or economic inequality can be described as the imbalance between income of individuals or household within a country or class. When income inequality is brought up or mentioned, most people think about it in regards to the impoverished class and the ultra rich 1% but this is not the case. In a world that is becoming more and more integrated, economic inequality between the middle class and the top 1% is becoming much more relevant and much more of a problem that needs to be addressed. We live in a...
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...University, Durham, NC Abstract Disagreements about the optimal level of wealth inequality underlie policy debates ranging from taxation to welfare. We attempt to insert the desires of ‘‘regular’’ Americans into these debates, by asking a nationally representative online panel to estimate the current distribution of wealth in the United States and to ‘‘build a better America’’ by constructing distributions with their ideal level of inequality. First, respondents dramatically underestimated the current level of wealth inequality. Second, respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution. Most important from a policy perspective, we observed a surprising level of consensus: All demographic groups—even those not usually associated with wealth redistribution such as Republicans and the wealthy—desired a more equal distribution of wealth than the status quo. Keywords inequality, fairness, justice, political ideology, wealth, income Most scholars agree that wealth inequality in the United States is at historic highs, with some estimates suggesting that the top 1% of Americans hold nearly 50% of the wealth, topping even the levels seen just before the Great Depression in the 1920s (Davies, Sandstrom, Shorrocks, & Wolff, 2009; Keister, 2000; Wolff, 2002). Although it is clear that wealth inequality is high, determining the ideal distribution of wealth in a society has proven...
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...Wealth Inequality in U.S. and Economic Efficiency Over the last decade, income inequality has become one of the most important issues in the U.S. and a subject of a lot of debate. There is a prevalent idea in the society that the wealth inequality in United States is currently at the highest level in the history after steadily raising for a number of decades. The financial crisis is said to have contributed to this significant gap between the top 1% and everybody else. People view it as an inherently negative thing, and fight hard to promote the equality and income redistribution. This paper examines the causes of inequality; the relationship between wealth inequality and economic growth and the hypothesis on how policy measures can be designed to mitigage the income disparity both in U.S. and in the rest of the world. The researh is based on the theory that inequality is an essential aspect of an efficient free market economy that adversely affects economic growth when in excess. When it comes to global wealth inequality, people often tend to accuse capitalism. In fact, the real laissez-faire capitalism doesn't exist anywhere on our planet. According to its definition, laissez faire is "an economic system in which transactions between private parties are free from intrusive government restrictions, tariffs, and subsidies, with only enough regulations to protect property rights." It has been previously proven free markets lead to the most efficient use of economic resources...
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...Confronting Inequality In the article “Confronting Inequality” Paul Krugman compares the new millennia to the 1970’s and has many financial stats to back his theory of income inequality. He backs up his claims with facts and figures, but also gives his own solutions to these problems. Krugman states, “ The ugliness of our politics is in large part a reflection of the inequality of our income distribution.” He states that in the 1960’s was that the governments was in place to sere the best interests of society and that many in modern society believe that government only serves “a few big interests”. His other argument is comparing or capital gains tax to that of other countries. Paul backs up his argument,...” very highly trained British employees face an effective tax rate almost 48 percent in France people with 15 percent in the United States”. Another point he made, he quotes Eric Uslaner and Mitchel Brown is, “In a world of haves and have nots those at either end of the economic spectrum have little reason to believe that most people can be trusted... social trust rest on a foundation of economic equality.” This quote makes me think that in his view everyone serves a function. Some more tan others and strive for economic equality is what we base our lives around. We need people to work in Slaughterhouses, build our cars, and clean our sewers. The fear is that people will not do these jobs without a monetary stimulant. How I interpreted Paul Krugman’s response was the...
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...Social Inequality What is social inequality? What are the sources of social inequality? For me, social inequality cannot be described in one sentence. Factors such as race, wealth, class, gender, age, among others all play roles into why people can sometimes be treated unfairly. However before I introspectively reflect on social inequality, there is one theory that suggests where today’s society is heading for me. Karl Marx is known as a prominent economic and political influence that lived during the 19th century. Marx’s theory of stratification is very applicable to where society, especially in the United States, is heading today. According to Marx, society would become divided into two classes, the dominant capitalist or the working class. Essentially the capitalists consist of the owners of production within a country while the working class consists of the laborers. This represents uneven distribution of wealth and resources, which creates a system of stratification. According to Professor Domhoff of the University of California, the top 20% of the workforce owned 89% of all privately held wealth in the United States as of 2010. There is already a large gap between social classes and will only continue to get worse if we continue down the same path as a nation. Whether through higher taxes on the wealthy or tax breaks on the working class, the gap needs to be closed. Money is king of today’s society whether people want to admit it or not. For me I think the uneven...
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...that independence would bring democracy and prosperity. However, at this moment most former colonies are fail states. Why decolonization has not delivered on the hope of prosperity and democracy? I would suggest that most decolonized states are still being exploited by the international system. Even though most (developed) countries lost their colonies, they still have a monopoly on their former colonies commodities. They use multi-national companies as a mean to control these commodities and other resources. As a result, most of the profit (generated) by the natural resources in underdeveloped countries, in fact goes to more develop countries. This caused the economies of former colonies to cripple. Furthermore, these states are still suffering from the legacy of inequality and ethnic tension which also prevent them from developing. Whereas, developed countries have used direct military threat to protect their multi-national companies interest. For instance, the United States had orchestrated the overthrown of the Guatemalan government in 1954 to preserve the monopoly of land of an US owned multinational company. A majority of ex-colonies remain under-developed because the economic international system still disfavors them. They are still serving the interest of core countries. (What interests) As a result, it is becoming increasing difficult for them to generate economic growth. Hans Singer, the father of the dependency theor argues poor countries are treated like colonies. For...
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...The Correlation Between Economic and Moral Disparity “What good will it be for a man if he gains the whole world, yet forfeits his soul? Or what can a man give in exchange for his soul” (NIV Matthew 16:26). The Bible does not directly condemn monetary prosperity. However, Jesus warns that the love of riches leads men further from the Kingdom of God and into a false idolization of wealth. This monetary worship pulls man away from God, and tears the seams of brotherhood that bond men together. Today, this bond between men has never been so frail and apathy has never been so vigorous. Millions of people die every year from preventable causes, including hunger, disease and countless other conditions, all derived from poverty. At the same time the richest 80 billionaires have the finances to solve world hunger, substantially increase the prevention of AIDS and effectively eradicate malaria. Wealth in itself is not evil; however, when humanity places riches above its fellow humans’ lives, it has reached a sinful state. The world has accepted material wealth at the price of what has become a sacrificial morality and love for mankind. The goal of this paper is to prove that global trends of economic inequality are unjustifiable from an economic/social standpoint, Scripture, and the recent position of the Catholic Church. Financial inequality is no new concept to the world. Since the beginnings of civilization there were the rich and there were the poor; many would argue...
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...TH E E C O N O M I C B U R D E N O F H E A LT H I N E Q U A L I T I E S IN T H E U N I T E D S TAT E S THE ECONOMIC BURDEN OF HEALTH INEQUALITIES IN THE UNITED STATES Thomas A. LaVeist, Ph.D. Darrell J. Gaskin, Ph.D. Patrick Richard, Ph.D. September 2009 foreward Not everyone in the United States enjoys the same health opportunities. Studies show that minority Americans experience poorer than average health outcomes from cradle to the grave. They are much more likely to die as infants, have higher rates of diseases and disabilities, and have shorter life spans. As the U.S. Congress and the Obama Administration work toward enactment of legislation to reform America’s health care system, a central focus of the debate has been the projected cost of ensuring accessible and affordable health care to every citizen. While some have struggled with the premise that health care reform can actually reduce health-related spending, the experience of racial and ethnic minorities under our current health care system is a strong indication that improving opportunities for good health – and minimizing inequities in health care access and outcomes – may well be good for the nation’s fiscal health, as well. This study, commissioned by the Joint Center for Political and Economic Studies and carried out by leading researchers from Johns Hopkins University and the University of Maryland, provides important insight into how much of a financial burden racial disparities are putting on our health...
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...AND WAGE INEQUALITY WINFRIED KOENIGER, MARCO LEONARDI, and LUCA NUNZIATA* The authors investigate how labor market institutions such as unemployment insurance, unions, firing regulations, and minimum wages have affected the evolution of wage inequality among male workers. Results of estimations using data on institutions in eleven OECD countries indicate that changes in labor market institutions can account for much of the change in wage inequality between 1973 and 1998. Factors found to have been negatively associated with male wage inequality are union density, the strictness of employment protection law, unemployment benefit duration, unemployment benefit generosity, and the size of the minimum wage. Over the 26-year period, institutional changes were associated with a 23% reduction in male wage inequality in France, where minimum wages increased and employment protection became stricter, but with an increase of up to 11% in the United States and United Kingdom, where unions became less powerful and (in the United States) minimum wages fell. W age inequality is substantially lower in continental European countries than in the United States and United Kingdom, and its evolution over time has differed greatly across countries. The same holds true for the skill (or education) wage premium. Changes in the supply of and demand for skills are unlikely to fully account for these marked differences (Acemoglu 2003). A substantial amount of research on wage inequality has examined...
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...1. a) Discuss the effects of income inequality on a nation’s economic conditions. Income inequality is the unequal distribution of income among individuals of an economy (Income Inequality, 2014). In other words, the difference between the wealthy individual’s income and middle-class to poverty-stricken individuals’ incomes continues to increase. Such disparity can have detrimental effects on the economy. Those individuals who have a low-income are less able to purchase goods. As income inequality between individuals increases, money moves from those who used it to purchase their basic needs to those who already had enough and more. This then causes a weakened aggregate demand for products because the middle-class and poor can no longer afford...
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