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Cause Of Income Inequality Essay

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First, the cause of Income Inequality is Global trend changed. Over the past forty years, the costs of transportation has reduced by because of improvement of technology, automation, and communication dramatically. New markets have opened, bringing growth opportunities in countries rich and poor alike, and hundreds of millions of people have been categories out from poverty. However, inequality has also risen. So, this has showed that the globalization has play a very important role in affecting the income inequality in this global.
Next, Technological changes rapidly and categories between labour. Due to the rapid growth of technology, the distance of income inequalities become far and far. New information technology has led to improvements in productivity and well-being by leaps and bounds, but has …show more content…

A labour market is the place where workers and employees interact with each other. In this market, labour demand is the firm 's demand for labour and supply is the worker 's supply of labour. The changes of bargaining power can the demand and supply of labour. The more flexible labour market institutions can faster foster economic dynamism by reallocating resources to more productive firms and enabling firm restructuring. However, greater flexibility can put forward challenges for workers, especially those with low skills, and hence play an important role in explaining inequality developments (Alvadero and others 2013). A decline in trade union membership (union rate) could reduce the relative bargaining power of labour, exacerbating wage inequality (Frederiksen and Poulsen 2010; Wilkinson and Pickett 2010 ;Jaumotte and Osorio-Buitron ,2015) and forthcoming International Monetary Fund (IMF) work finds that a reduction in the minimum wage relative to the median wage is associated with higher inequality in advanced economies, while a decline in unionization rate is strongly associated with the rise of top income

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The root of the inequality issue lies in the government policies, as they hold the power to determine where the money lies on the spectrum of the rich, middle class and the poor. Normally, when an economy is suffering, employment as well as wages adjust accordingly and sales as well as profits suffer as well. However, because of this inequality employment rates and wages actually suffer while the sales profit. Political forces, as much as economic ones are what leads to inequality. As the government controls the distribution of sources as well the distribution of income that comes from a market.

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Krugman enlightens the readers on how income inequality can set Americans back, and how the union could help out by increasing the minimum wage. In order to reduce the market inequality minimum wage has to be increased

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The distribution of incomes and wealth in the 1920s and now are diverse but similar in several ways (Ucsc.edu). A person’s wealth is determined by what they own, not including any debts. A person’s income is how much money one may make on a job or money someone obtain. Income inequality is real and has affected people for many years, and it is still occurring currently. The distribution of wealth in the 1920s earned the name roaring twenties due to the sustained prosperity, new technology advancements, and exciting culture (Shmoop.com).

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As I have continued to carry on my passions in the school community and through extracurricular activities I believe I will be able to do the same at Saint Francis. One of the many things I am passionate about is soccer, and other sports. I enjoy being a part of a smaller community with the same interest, and passions. I am also interested in being a part of the other clubs at Saint Francis such as photography, baking club, and being a shadow host. One of my favorite activities is to play soccer, I have been playing soccer since a very young age.

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There is a profound gap of wealth between median black and white families, In Race, Wealth, and Intergenerational Poverty, Darrick Hamilton, Professor of Economics and Policy, and William Darity, Professor of Public Policy, discuss the causes of this gap, and measures that can be taken to resolve the disparity. Hamilton and Darity assert the claim that we live today in a post-racial America is false, largely due to the fact that the disproportionate wealth gap between median white and black families exists. They present statistics from a 2002 survey, demonstrating the gap of net worth between white and black families to support this. Hamilton and Darity, using this evidence, dismisses the assertation that race is no longer a determining factor in one’s life chances, which many claim is so gesturing to the election of President Barack Obama, but the evidence of the wealth gap supports the contrary. As to why this gap still exist, Hamilton and Darity dismiss the two most proposed reasons.

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There are people who work 40 hours a week and are still in poverty; this is a highly prominent issue. The uneven distribution of wealth, known as wealth inequality, is a problem that plagues not only America but also the world. With wealth inequality, there are two main issues and one solution to those issues. The problems are that the wealth in America is unevenly distributed and there people in America who work 40 hours a week and still have very little money. Wealth inequality is the root of all problems faced in America.

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Families as a whole will argue the point that an increase in minimum wages will allow families the abilities to put more food on their tables, while providing the base necessities need in the family. However, most analyses of the minimum wage focus on its unintended employment consequences. (Freeman, 1996) Some major companies have agreed to increase the minimum wages in some States, nevertheless, the amount that the wages have been increased by is not enough to get a family from beneath poverty. Proven the fact that job markets in some cases are not working in the best interest of their employees.

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Smith would suggest that today’s inequality gap is unhealthy to both people and society as a whole, and raising minimum wage is a solution to address the current social inequality issue. Labors must earn wages that will sustain their and their families’ basic life. However, in the process of determining wages, capitalists are usually the decision-makers. On one side, they tend to make labors’ wages as low as possible to generate more profits, and sometimes even lower than labors actually deserve. On the other hand, labors seldom have the bargaining power to negotiate wages with their employers.

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Inequality in the accumulation of wealth in the U.S.’s black population stretches back to times of slavery and lack of reparations for their group’s enslavement to the Social Security Act and the Federal Housing Act (GIB 1). Racial discrimination lurks in the U.S.’s housing market from its very conception after WWII, when GIs began to return home in search of a new home (RTPI). Although, the Federal Housing Administration by no means a starting point for the cause of wealth inequality, it certainly exacerbated the gap. White suburbs like “Levittown” created a white exclusive ideal neighborhood which devalued black and other nonwhite homeowners. Housing discrimination prevented blacks and nonwhites from accumulating wealth like whites would

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3.1 How income inequality affect on people live in America. The income gap in America affects people, who live in this country. The issue has a strong impact in America’s society; in particular, the nutritional disparity between rich and poor people. In USA, the food gap becomes the top signal for the class distinction, but it used to be clothing or fashion. The food inequality in America is not only influencing the poverty, it is also cost hundreds of billions of dollar per year because of Non Communicable Diseases (NDCs) (Ferdman, 2014).

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The problem with the widened wealth gap is that the inequality may harm the quality. Meaning that those in the higher classes see it as you can use the money with no restrictions. However, economist believe that the “relationship between inequality and economic freedom, with the possibility that policies that are meant to reduce inequality will reduce economic freedom, which will then only make inequality worse.”

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Evaluate to what extent rising income inequality was one of the triggers of the subprime mortgage crisis in the U.S in the 2008. The United States have suffered two major economic shocks in the last century, in 1929 and in 2008. In both cases, the pre-crisis stages had one common feature, a sharp increase in income inequality, followed by a sharp increase in households debt leverage. Between 1983-2008 there was a rapid increase in the United States’ debt-to-income ratio, this increased the probability of the economy facing a financial crash, such as the one experienced in 2008.

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Wealth and Inequality in America Inequality The inequality in America has increased over time; the gap between the rich and the poor has become a problem that many Americans don’t see. Inequality is the extent of income which is distributed unequally among the citizenry. The inequality of the United has a large gap between the poor and the rich making it unfair to the population, the rich are becoming wealthier and the poor remain poor. The article “Of the 1%, By the 1%, For the 1%”, authored by Joseph E. Stiglitz describes that there is a 1 percent amount of American’s who are consuming about a quarter of the United States income in a year.

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Introduction All over the world, there is an obvious contrast between the living standards and lifestyle of the rich and the poor. Moreover, there is a large gap between the populations of poor and wealthy. This is known as the Wealth Gap, and it is caused by Wealth Inequality. Wealth Income/Inequality is defined as “The unequal distribution of assets within a population.” Wealth is defined as more than just the amount of income a person has, but instead the value of a person’s assets.

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Inefficient policies all around the world and especially in our country are contributing to problems in the society. And the biggest problem which the world faces today is the problem of “Poverty” and “Inequality”. It is hard for one to determine whether poverty causes inequality or is it the other way around because both these problems are interrelated. Poverty is something which is caused due to transferring wealth in to the hands of a specific group and the unjust policies of the government. And inequality is discriminating a person in all spheres of life which gives a rise to sense of deprivation.

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