The issue of income inequality has been stealthily haunting the United States of America for quite some time already. From the late nineteen seventies up until today, income inequality is an issue that is recurring. Now if one would want to know more about the income gap in America, here are some of the facts and arguments.
Now before discussing the economic situation of this country, it is very important to first define the meaning of income gap. Now in a nutshell, income gap is the big gap in equality between the number of rich people and the number of poor people in a country. If one would put it in easier terms, this would be the income bracket.
Now in America, what is happening here is that the rich occupy a big amount of money from the country while the rest are left in poverty. The two classes are actually very high which means there are a lot of rich people and a lot of poor people. The middle class people on the other hand have a low share of the profits.
Now of course in order to study this, economists studied the wealth generated by several countries. They take a sample of eighteen countries and studied how the distribution of wealth are for these countries ranging from the year 1975 up to the year 2007. Now they were able to conclude from the results that the United States was the country wherein the rich benefited the most.
Now the reason as to why this is the case is simply because the US is a free market. Being in a very democratic country, the US supports the existence of a free market. Due to them being a free market, the wealth distribution among the people is not monitored by the government and the market is left alone to do whatever it wants.
Now the million dollar question right now is that is this phenomenon good for the economy or bad for the economy. Now a lot of people would argue that it is in fact healthy for the economy because the rich people can make the country wealthy which means that they can contribute more to the economy. When that happens, then the country will be able to prosper better because of bigger taxes.
Others believe this gap is very unhealthy because the more the unemployment rate would be going up, the less people with spending power. Now with the power all being squeezed at the top, these economists believe that the economy of the US will suffocate itself to death. This is simply because it will not be utilizing all of its people and therefore not be fully productive.
So as one can see, this income inequality is one of the controversial issues that have sprung up in the US. Clearly many people still have the mindset that people should earn as much as they work. However, it can also be seen that as the unemployment rate in the country goes up, the economic growth in the long term may take a turn for the worse.
Now before discussing the economic situation of this country, it is very important to first define the meaning of income gap. Now in a nutshell, income gap is the big gap in equality between the number of rich people and the number of poor people in a country. If one would put it in easier terms, this would be the income bracket.
Now in America, what is happening here is that the rich occupy a big amount of money from the country while the rest are left in poverty. The two classes are actually very high which means there are a lot of rich people and a lot of poor people. The middle class people on the other hand have a low share of the profits.
Now of course in order to study this, economists studied the wealth generated by several countries. They take a sample of eighteen countries and studied how the distribution of wealth are for these countries ranging from the year 1975 up to the year 2007. Now they were able to conclude from the results that the United States was the country wherein the rich benefited the most.
Now the reason as to why this is the case is simply because the US is a free market. Being in a very democratic country, the US supports the existence of a free market. Due to them being a free market, the wealth distribution among the people is not monitored by the government and the market is left alone to do whatever it wants.
Now the million dollar question right now is that is this phenomenon good for the economy or bad for the economy. Now a lot of people would argue that it is in fact healthy for the economy because the rich people can make the country wealthy which means that they can contribute more to the economy. When that happens, then the country will be able to prosper better because of bigger taxes.
Others believe this gap is very unhealthy because the more the unemployment rate would be going up, the less people with spending power. Now with the power all being squeezed at the top, these economists believe that the economy of the US will suffocate itself to death. This is simply because it will not be utilizing all of its people and therefore not be fully productive.
So as one can see, this income inequality is one of the controversial issues that have sprung up in the US. Clearly many people still have the mindset that people should earn as much as they work. However, it can also be seen that as the unemployment rate in the country goes up, the economic growth in the long term may take a turn for the worse.
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