Cause Of Income Inequality

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Inequality What is it? Income inequality is the unequal distribution of household or individual income across the various participants in an economy. Income inequality is often presented as the percentage of income to a percentage of the population. Stated in Ineqaulity.org “Income includes the revenue streams from wages, salaries, interest on a savings account, dividends from shares of stock, rent, and profits from selling something for more than you paid for it.”(Inequality) It also eludes to income as being distributed in an uneven manner among a national population.The gap between everyone else and the rich has constantly been growing since the year 2000. Inequality can be defined or measured in a number of different ways. A newer line …show more content…

There are many causes of income inequality. Executives and Wall Street are a cause of income inequality. Increased incomes for CEOs and financial sector professionals account for 58 percent of the top 1 percent of the income distribution and 67 percent of the top 0.1 percent. So the specific dynamics of compensation in those areas are wielding a big influence. Superstar effects is another cause of income inequality. The world is bigger and richer in 2014 than it was in 1964, being a "star" performer — the most popular athlete, author, or singer — is more lucrative than it used to be. The income inequality is massive when dealing with that aspect of it. Many of the causes of U.S. income inequality can be traced to an underlying shift in the global economy. This shift is about lessening a global income inequality. The richest 1 percent of the world's population has 40 percent of its wealth. Americans hold 25 percent of that wealth. Currently, the economic literature pinpoints three major causes of falling wages and the rise of income inequality in America. The three main causes are technology/education, trade/globalization, and institutions. This hypothesis focuses on the large wage premiums for workers with high levels of education and skills. Not only has income inequality been on the rise since the year 2000 but according to an article by Olga Branoff “Income inequality has increased in the United States over the past 30 years, as income has flowed unequally to those at the very top of the income spectrum.”(Olga) In this article, Olga states that “Part of this difficulty is rooted in the complexity inherent in larger labor market inequalities.”(Olga) This would include the falling of the labor force participation. The constant fluctuation and stagnation of median wages in America and the downward slope of the share of labor income. These are all part of current U.S. trends in the labor

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