- Gap between rich and poor
Not the same as poverty
Poverty and inequality are not equal
- Poverty is a level that one is either over or under
- Inequality represents the gap between high income earners and low income earners
- For example, if the rich get richer and the poor get slightly richer then poverty decreases but inequality increases
There are different concerns for these two ideas
- Poverty-people are not getting their basic necessities
- While inequality deals more in fairness
Measuring inequality involves capturing the entire distribution of income
- Split into parts(e.g. fifths, tenths) and determine income variances from there.
Share of top1/5 has gone up while the bottom 1/5 has gone down.
- This could be due to the fact that people who want money are going to pursue it more aggressively causing their income to go up exponentially faster while someone who doesn’t care as much would tend to stagnate.
- Baby boomers are getting older throwing off the percentage
Why the increase in inequality?
- Technology has increased high income workers productivity-many good paying jobs have become obsolete. One such example is a middle manager who had staff just to complete reports and data, then file it. Now one tech savvy employee can do all the aforementioned.
- Unions now are weaker and the minimum wage is lower(adjusted for inflation)
- More single parent homes, in 1968 10%sph in 2000 the number jumped to 23%
- High income workers are tending to marry each other
- Stagnation of the poor
How to decrease inequality
Higher taxes on the rich, but as the chart show below they already pay a high share
Direct payments to the poor could aid in closing the gap
- Expanded EIC
Expanded services for libraries, schools, parks and mass transit(question: why are Baltimore cities library hours so inconsistent while the Baltimore county libraries have set hours which stay consistent as far as weekdays, weekends and Sundays?
- For any of these there could be increased hours or;
- Increased services(worker training, vocational)
- Stronger unions which could lead to higher wages and increased benefits
- Part of the American dream is that if you work hard and do the best with the hand you are dealt you could live a nice middle class life