What happens when any country has high income inequality?
If the separation of nation’s wealth is based on the rule where a little group of people keeps the majority of a nation’s capital, the balance of pоwer in this state is skewed or deformed. Therefore, low and middle classes of society have less access to capital and less access to nation’s resources, consequently, they have low chance for breaking out the cycle of poverty. While economists all over the world think on what optimal wealth distribution actually is, many inhabitants of different countries agree that the Gini index is the most real indicator of the health and vitality of a country. The Gini index represents the main principle, which based on income distribution between country's citizens. This number, which ranges between zero and one and is based on residents' net income, helps define the gap between the rich and the poor, with zero representing perfect equality and one representing perfect inequality.
Gap between Rich and Poor: World Income Inequality
To understand how many inhabitants of a country are poor, it is not enough to
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These measures include an increase in the real wages for employed population, a strengthening of pensions through the financial base by increasing the nominal wage. It is necessary to establish a mechanism for regulating incomes of the population, taking into account the territorial specificities of different countries. It is possible to achieve better equitable distribution of income by the government through improving the tax system. It is efficient to introduce the most effective control of real incomes and to enact laws for damages in cases of non-payment wages. All these measures are able to smooth and even eliminate an inequality in the distribution of material wealth among members of society and improve the living standards of a population in a