Question

Which is greater in the United States today, the income gap or the wealth gap?

Why is it sociologically important to make a distinction between the two?

Answer 1

• There is pronounced wealth gap between the rich and poor than income gap.Wealth refers to the assets one possess,whereas Income refers to the money one receives after a specific period of time,for the work done.
• Wealth includes one's personal financial holdings or savings,stock investments,family home etc.,whereas Income includes one's wages,salaries,cash assistance from government etc.
• Wealth is more important to understand the inequalities which exist,as wealth generates income,so income inequality depends on wealth inequality.The wider gap which is seen between African Americans and White Americans is the wealth inequality,due to discriminations the African americans face especially related with housing.
• People face more car loans,credit card balance,student loans,mortgage and other bills which are yet to be paid,thereby increasing the wealth gap between rich and poor.Poor experience more negative debt in America,as the value of their debts is more than the value of their assets,unlike the rich who experience positive wealth.
• The rich have the bulk of their wealth coming stock investments,holding shares in companies,owning properties and other lucrative sources.The poor have their wealth coming from only their households,making them suffer from more than 3/4th of America's debts.