inequality

Examples of inequality in the following topics:

• How Income is Allocated

  • Recent growth in overall income inequality has been driven mostly by increasing inequality in wages and salaries.
  • Recent growth in overall income inequality has been driven mostly by increasing inequality in wages and salaries.
  • Globally, income inequality has increased over the last few decades.
  • Given that economic theory points to a decline in income inequality over time, the recent increase has led many researchers to conclude that we may be starting a new inequality cycle .
  • The Kuznets curve depicts the relationship between inequality and income; after hitting a market peak, inequality will decrease as income increases.

• Defining and Measuring Income Inequality

  • Income inequality uses the dispersion of capital to identify how economic inequality is defined among individuals in a given economy.
  • Income inequality utilizes the dispersion of capital to identify the way in which economic inequality is defined among a group of individuals in a given economy.
  • In this case, 0 indicates perfect equality, and 1 indicates perfect inequality.
  • To simplify the information above, the basic concept behind measuring inequality is identifying an ideal and tracking any deviance from that ideal (which would be deemed the inequality of a given system).
  • Minimizing inequality is a central step towards an advanced society.

• Current Topics in Income Distribution

  • Income inequality in the United States has grown significantly since the early 1970s.
  • While income inequality has risen among most developed countries, and especially English-speaking ones, it is highest in the United States.
  • The first era of inequality lasted roughly from the post-civil war era ("the Gilded Age") to sometime around 1937.
  • But from about 1937 to 1947, a period that has been dubbed the "Great Compression," income inequality in America fell dramatically.
  • The return to high inequality or what has been referred as the "Great Divergence," began in the 1970s.

• Measurement Problems

  • Due to the high complexity of measuring equality, the accuracy of many poverty and inequality measurements can be less than ideal.
  • As with any statistical modeling and measuring approach, there is a great deal of complexity to capture within a finite algorithmic structure, making the accuracy and efficacy of many poverty and inequality measurements less than ideal.
  • The most popular measurement of income inequality is the Gini index, which leverages a simple scale of 0-1 to derive deviance from a given perfect equality point.
  • The Gini index still has important implications about relative inequality in this circumstance, but it neglects to point out positive gains.
  • This is done as a result of lifestyle choice or religion, and is counted into poverty and inequality levels despite the fact that the individual being counted has actively pursued this place in society.

• Arguments in Favor and Opposed to Economic Growth

  • Economic growth has the potential to make all people richer, but may have downsides such as increased inequality and environmental impacts.
  • For example, in a country with low inequality, a country with a growth rate of 2% per head and 40% of the population living in poverty can halve the poverty in 10 years.
  • In contrast, if the same country has high inequality it will take nearly 60 years to achieve the same level of poverty reduction.

• Infant Industry Argument

  • Despite the standard argument from mainstream economists postulating that free trade and open markets is the ideal system to allow for capitalistic development, there are many economists who believe that some degree of protectionism is the only way to minimize income gaps and substantial inequity from economy to economy (see ).
  • Alexander Hamilton first pointed out the inequities of developing economies with young industry in 1790, which was later picked up and developed by Daniel Raymond and Friedrich List in the 19th century.
  • This map demonstrates the vast difference in overall economic power across the globe, underlining the inequities that need to be addressed in economic policy formulation.

• Defining and Measuring Economic Mobility

  • Race/Ethnicity: In the United States in particular there is huge inequity between Caucasian workers and that of other backgrounds (African American, Hispanic, etc.).
  • Approaching this social tie with income inequity has taken a great deal of political reform over the years, and has much left to accomplish in terms of enabling movement across economic levels.This could in many ways be coupled with immigration, or the concept of being different socially or ethnically from a group that has historically achieved high income levels.

• Personal Income

  • Personal income data can provide governments with useful information in the formulation of public policy to combat income inequality.

• Financing the US Government

  • The income derived in this manner is then used to transfer income to lower income groups, thereby, reducing inequalities related to income and wealth.

• Typical Lengths of Unemployment

  • Social: Within the economy, long-term unemployment increases the inequality present in the economy and impedes long-run economic growth.