...Income Inequality in America: An Analysis of Policies from Reagan to Obama and What Policies Can Help Close the Gap Income inequality in America has been of great importance in recent election cycles. Candidates from both sides of the political aisle have addressed the growing economic and social concern of increasing income and wealth inequality throughout the country. However, policies to address this growing concern are vastly different. This paper seeks to examine policies from Reagan to Obama that contributed to today’s massive income and wealth inequality. Was it tax reform throughout the 1980s and 1990s that contributed to inequality? Did the Federal Reserve perpetuate policies through massive quantitative easing that led to...
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...Tobi Kehinde University of Oklahoma The Leadership Experience Steven R. Gullberg March 20,2015 Michael Alfonzo took charge of the USS Florida, a submarine ranked among the world’s most dangerous weapons. When announced to the crew of the submarine that he was elected the next commander the crew welcomed him knowing that he has a career in the Navy joining as a teenager and eventually moving up the ranks to become commander. They associated him as one of them. He was thought of as a polite man and past shipmates remembered him as a loner. Upon becoming captain, Alfonzo admonished his sailors and pushed them to their limit, which is what a good leader should do. The downside was his strict and irreparable behavior, loudly reprimanding crew members he believed where unfit for certain duties and even yelling at the chief chef for the absence of coke in the soda dispenser. His behavioral patterns made the crew scared of reporting issues to him in order to avoid being scolded. At the end of the journey when the crew hit shore although under Alfonzo the best ever grades were recorded for certifications the rear admiral Sullivan relieved captain Alfonzo of his duties because of the alienated crew, and strained relationship between the captain and the crew. This was the first ever dismissal of a trident submarine commander. In relation to the Dyadic theory we can highlight the difficulties associated with the Michael Alfonzo case study. Although the leadership method employed...
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...Many Americans across the United States are faced with income inequality. These income inequalities have many negative effects on communities and neighborhoods. These income inequalities also have a couple positives changes as well. Only time will tell how the economic state of the middle class and lower classes will improve or continue to fall into harder times. Johnson and Rhodes state “where you live clearly affects how you grow up”, which is absolutely true (p. 387)! Those that live in poverty may also deal with school systems and other institutions such as clinics that don’t have enough funding to go around. The wealth distribution has been a continuous problem that has no simple answer, what once may have seemed like a private trouble...
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...Why Is Income Inequality in America so Pronounced? Questions for Article 3 Seminar 3 (Week 4) “Why Is Income Inequality in America So Pronounced? Consider Education”, by TYLER COWEN – May 17, 2007. 1. The article states, "starting about 1950, the relative returns for schooling rose, and they skyrocketed after 1980. The reason is supply and demand….Those in need of skilled labor are bidding for a relatively stagnant supply [of educated workers] and so must pay more." U.S. trade as a fraction of the economy has also grown somewhat since about 1950. Compare the statement from the article with the prediction about the distribution of income from Heckscher-Ohlin model. The Heckscher-Ohlin model predicts that an economy will be relatively efficient in producing goods that intensively use factors of production, which are relatively abundant, and that owners of abundant factors of production will gain from trade and owners of scarce factors of production will lose from trade. From the article, it is not clear if the U.S. is abundant in educated workers relative to some other factor of production, like land, capital or unskilled workers, but it is arguable that the U.S. is relatively abundant in educated workers relative to unskilled workers compared to many countries that it trades with. In contrast, the statement from the article does not consider trade per se, but simply the supply and demand of educated workers, which can change due to trade or for other reasons...
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...(Week 4) “Why Is Income Inequality in America So Pronounced? Consider Education”, by TYLER COWEN – May 17, 2007. 1. The article states, "starting about 1950, the relative returns for schooling rose, and they skyrocketed after 1980. The reason is supply and demand….Those in need of skilled labor are bidding for a relatively stagnant supply [of educated workers] and so must pay more." U.S. trade as a fraction of the economy has also grown somewhat since about 1950. Compare the statement from the article with the prediction about the distribution of income from Heckscher-Ohlin model. The Heckscher-Ohlin model predicts that an economy will be relatively efficient in producing goods that intensively use factors of production, which are relatively abundant, and that owners of abundant factors of production will gain from trade and owners of scarce factors of production will lose from trade. From the article, it is not clear if the U.S. is abundant in educated workers relative to some other factor of production, like land, capital or unskilled workers, but it is arguable that the U.S. is relatively abundant in educated workers relative to unskilled workers compared to many countries that it trades with. In contrast, the statement from the article does not consider trade per se, but simply the supply and demand of educated workers, which can change due to trade or for other reasons. 2. What is wrong with claiming that changes in the distribution of income are associated...
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...Income Inequality and Economic Well Being Income inequality is prevalent in the entire economic global economy with its effects clearly visible in form of differences in pay scales, distribution per household etc. The economic well-being is not measured in the terms of income alone, but also by other factors such as satisfaction levels, education standards, quality of life etc contribute towards well-being. The causes of the income inequality broadly fall into two categories: the market forces and the institutional forces. The market forces includes the technological advances and the increased trade, making the highly educated and more skill work force more productive thus increasing their wages whereas the institutional forces like deregulation leading to decline of unions and stagnation in the minimum wage in the recent years. Despite the fact that the level of income distribution has become skewed over the decade, the quality of life, due to various advancements has improved. Better quality products can be purchased at lower prices, which in-turn has improved the standard of living over the past decade. It is a common fact that the richer are happier than the poor. But well being is a matter of perception as well. People asses their well being by comparing their past and current circumstances, and by comparing their current standard with that of others. The Easterlin Paradox, which was developed by Richard Easterlin,, states that “although at some point in time richer...
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...Although Latin America has faced many social, political, and economic issues within the last three centuries, inequality remains one of the most important, historical, and omnipresent aspects of the region’s culture. As Europeans took over Latin America during the time of colonization, they implemented many elitist social structures that have held strong and are evident today (Harris). Income inequality is the most visible and greatest disparity that the region faces; yet inequality between gender, ethnicities, and education remain strong and significant problems with a necessity for improvement. Inequality of wealth and disparity of power and influence are Latin American’s greatest curses and are at the root of many of the developmental, social, criminal, and political problems that continue to plague the region (De Ferranti). Since inequality has pervaded into every feature of Latin American society, it is important to measure inequality accurately in order to obstruct the causes of the discrimination and prevent new ones from beginning. The Gini Coefficient is an effective way that people indicate the inequality of a country by measuring a frequency distribution of income or wealth. Using the "Gini Index" of inequality in the distribution of income and consumption, the researchers found that Latin America and the Caribbean, from the 1970s through the 1990s, measured nearly 10 points more unequal than Asia, 17.5 points more unequal than the 30 countries in the Organization...
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...Occupy Wall Street Movement Business Ethics 309 Discuss the moral and economic implications involved in the movement. September 17, 2011 is the day the Occupy Wall Street (OWS) movement began in Zuccotti Park, located in New York City. The main issues include social and economic inequality, greed, corruption and the undue influence of corporations on government according to The New York Times. The mix of moral foundations based on ideas from the anthropologist Richard Shweder, outline six clusters of moral concern - care, fairness, liberty, loyalty, authority, or sanctity. OWS main moral issues include: fairness, care, and liberty. Fairness – the rich (the “1” percent) got rich by taking without giving. OWS protesters viewed the rich as cheaters who exploited their way to the top. They further suggested that the taxpayers had to bail them out after they crashed the economy. Care and liberty were the next moral foundations at OWS (Haidt, 2011). Analyze each of the implications identified above against the utilitarian, Kantian, and virtue ethics to determine which theory best applies to the movement. Utilitarian looks at consequences, or the greatest good for the greatest number. Utilitarianism is generally held to be the view that morally right action is the action that produces the most good. We believe that we are all individuals and that society is only the net result of our individual choices. The sociologist Emile Durkheim understood that utilitarianism is...
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...Bus301: Business Ethics I have to admit that even though the Occupy Wall Street Movement has been all over the news I did not truly understand the stance of it, nor did I really get involved with it. While doing research for this paper I was able to get a better understanding of the basis of the movement as well as the facts pertaining to it. The movement started on Wall Street but has spread across the US. The basis of the movement focuses on social & economic inequality, greed, corruption and the influence of corporations on the US government, primarily from the financial sectors of businesses. The main slogan of Occupy Wall Street (OWS) is we are the 99%, which addresses the growing income inequality and wealth distribution in the US between the wealthiest 1% and the rest of the population. Huffington Post reporter, Paul Taylor said the slogan is "arguably the most successful slogan since 'Hell no, we won't go,'" of Vietnam war era, and that the majority of Democrats, independents and Republicans see the income gap as causing social friction The initial basis of the movement was to protest the global crisis of monetary insolvency, and the increasing disparity of wealth. Without offices, paid staff, or a bank account, Occupy Wall Street quickly spread beyond New York. People gathered in Boston, Chicago, Los Angeles, Portland, Atlanta, San Diego, and hundreds of other cities around the United States and claimed the right of we the people to create a world that works for the...
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...Income inequality Name Date Abstract In any given population, there is a difference between what people within the population earn. The uneven distribution of income in any given population is income inequality. In order for there to be income, there has to be several sources of income. These sources of income may be combinational or independent per person receiving the income. Income may result from wages, rent, bank account interests, salaries or even profits made in business transactions ( Stiglitz, 2012). In his hypothesis, Karl Marx foresaw income inequality in a capitalistic as a major problem that would lead to an economic evolution. The main reason he foresaw an evolution was due to the recurrent nature of income inequality. In an income inequality situation, the richer keep getting richer due to a better income, while the poor keep getting poorer. The gap between the top earners and the low-income earners keeps widening in an income inequality situation. In America, almost 95% of the national wealth is under 5% ownership; this situation leaves 95% of the population to scrounge for the limited 5% wealth (DeNavas et. Al, 2005). Introduction In order to understand the complexities of economic inequality, the best specimen to use for the study is a family. In the study, the family’s income is under analysis, and then the family members ranked from the lowest income earner to the highest income earner. After the ranking, the incomes aid in establishing a Lorenz...
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...Truth about the Income Disparity Recently, President Barack Obama announced his plan to rein in the compensation of executives and raise tax rates on capital gains. This has again brought the topic of America’s widening income gap to the front page. While it is true that the wealth of America has long been dominated by a small number of people, most Americans do not see it as economic inequality or an obstacle to the development of the economy, which can be explained from two aspects—culture and economy. Instead, the real problem is the workers’ slow-paced wage increase, especially compared with the rising health care costs. Admittedly, most of the household income and wealth in America are occupied by a small minority of people at the very top, and actually the income gap has been rising at an increasing pace for the last few years. According to the data released by the Internal Revenue Service in 2005, 21.2% of all the household income went to the top 1% of Americans, the percentage of which was just 19% in 2004, and 20.8% in 2000—the previous high hit due to the skyrocket stock market. First of all, however, are the income disparity and economic inequality the same thing? Definitely not. As pointed out by Ladd and Bowman, rooted in the concept of equality for Americans is the notion of “equality of opportunity” (33). Great disparity in income distribution among social members can be tolerated as long as they can perceive that they have the opportunity to move...
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...Education and Income Inequality: A Meta-Regression Analysis Abdul Jabbar Abdullah* Hristos Doucouliagos Elizabeth Manning - FIRST DRAFT - Please do not quote without permission from the authors September 2011 Abstract This paper revisits the literature that investigates the effects of education on inequality. Specifically, the paper provides a comprehensive quantitative review of the extant econometrics literature through a meta-regression analysis of 64 empirical studies that collectively report 868 estimates of the effects of education on inequality. We find that education affects the two tails of the distribution of incomes; it reduces the income share of top earners and increases the share of the bottom earners, but has no effect on the share of the middle class. Inequality in education widens income inequality. Education has a larger negative effect on inequality in Africa. The heterogeneity in reported estimates can be largely explained by differences in the specification of the econometric model. JEL Codes: I24, C01 Keywords: Education, inequality, meta-regression analysis Number of words: 12,683 * Corresponding author. Abdullah: Universiti Teknologi Mara Sarawak Campus, Malaysia and PhD Candidate Deakin University, ajabd@deakin.edu.au Doucouliagos: School of Accounting, Economic and Finance, Deakin University, douc@deakin.edu.au Manning: School of Accounting, Economic and Finance, Deakin University, elizabem@deakin.edu.au 1 Education and Income Inequality:...
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...portion of the population is forced to hold the base of our country in place while hardly being redeemed for their time and effort, and thus the problem of income inequality. Numbers of these people live from paycheck to paycheck, barely getting by, not because they manage their money poorly, but because the value of their time at work is negligible (Chapter 2 Economic Inequality). Some may even sacrifice happiness at work to find a job that pays better simply because they cannot make ends meet at their current job. Some people sacrifice their sanity and eventually their life just to keep from going under financially. Segregation in income distribution is another cause of these problems, such as that with women or African-Americans who make less than other classes comparatively. In contrast, actors and actresses such as Brad Pitt and Julia Roberts make millions in the entertainment industry, an industry that grosses hundreds of millions of dollars a year creating what adds up to be the same kind of entertainment most people could get out of watching their children play sports or sing in a choir. The question then is how to find the value of work and time in our society and what should determine income. Positive reasons for income inequality are hard to find. One reason is the incentives there are to achieving higher status of income. You are regarded as successful in the eyes of your peers, and if you’re financial security is achieved, your life can be a lot less stressful. It is the...
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...Discussion Question: How do you accurately account for economic inequality in order to better assess living standards across and within countries? Discuss the factors affecting economic inequality and the implications on a local and global scale. Before even getting into the debate of assessing living standards, inequality and its measurement, let us first define income and consumption and how these measures are used to assess living standards in mainstream economics. According to Folbre, income encompasses all resource inflows to the household while resource outflows make up for the consumption variable (Folbre, 2009). In today’s world, living standards are assessed by looking at either of the two measures; however, most people agree that looking at living standards from the consumption angle gives us a better, more accurate feel for disparities. That being said, we recognize that these two measures do not provide a full picture: we look at resource inflows and outflows to and from households; however, we do not take into account what actually happens within the household. In recent years, more and more economists have shifted their attention to those non-market factors that directly impact standard of living among the population. In the following paragraphs, we will first examine how economic inequality is currently measured and the limitations underlying those methods. We will then elaborate on the additional parameters (household production and leisure) and their importance...
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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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