Solutions To Income Inequality Essay

it can be interpreted that this specific type of inequality can be damaging to a nation’s economic growth and should be remedied to improve that nation’s health as well as the well-being of its citizens.

What are the solutions to income inequality? The solutions to income inequality include both internal and external factors. Based on econometrics, the most important internal factors contributing to a decline in income inequality are policy changes, higher education spending, more tax revenue and robust GDP growth. An external factor that contributed was elevated Foreign Direct Investment. Growing exchange rates have also had a small impact on the decline of income inequality. Income inequality rates fell by three-fourths Gini points

In the same year, President Luiz Inácio Lula da Silva expanded the current cash transfer system Brazil had at the time to create Bolsa Familia with the purpose of reducing poverty, improving public services like healthcare and education, and extending the program to include more citizens. The new implementation were able to positively affect the lives of many of its natives given its short lifespan; the poverty rate decreased from 37.5% in 2001 to 24.9% in 2009, public spending in public education led to improved quality and an increase from 68.5% to 81.5% in enrollment, and enrollment into Bolsa Familia expanded from 6.5 million in 2004 to over 12 million in 2011. The policy tackled income inequality as the cash transfer were accountable for 80% of “Brazilian families’ non-labor income and for 49% of the total reduction in non-labor income inequality” (COHA). While still infantile in execution, Bolsa Familia shows promise to the Brazilian people of a prosperous that can be spread to a larger amount of its people than was previously capable

Today, the region’s level of inequality is staggering compared to the rest of the world. However, Latin America has been able to decrease its most troubling issue through economic growth along with proper government spending to support its impoverished citizens. As a result, the region’s economy expanded by 6%, the overall poverty levels returned to the pre-crisis levels with the rate dropping to 32.1% in 2010. The Gini coefficients of individual Latin American nations are comparable with America’s; Uruguay and Venezuela numbers were at .433 and .412, respectively, while the United States had .468 during the late 2000’s (Gasparini and Lustig 3). While the area is not a perfect economic utopia, Latin America is making strides in attempting to do so given the relatively short time they have implemented their policies to redress the inordinate issue of income