Question

(15%). 2. Provide some basic statistics on the Wealth vs. Income inequality in the U.S.

Which one is higher?

Better answers will start with explaining what the difference between wealth and income inequality is,

then provide key statistics on where the U.S. on each of the measures and how it compares to other countries,

and concluded with a few words of discussion what these numbers mean.

Answer 1

Wealth and income inequality are both part of economic inequality which is often referred to as wealth gap. The income inequality is basically the difference in the annual income of the people of U.S. where as the wealth inequality is said when there is an unequal distribution of the assets among the people of a country or the residents of a country. The difference among wealth and income inequality may be understood as on the basis of this example.Suppose there are two person Mr.X and Mr. Y and they both have income of say $20000 but Mr. X has wealth of $ 100000 but Mr. Y has no such wealth.So with the same income Mr. X will have a lavish life while Mr.Y have to struggle for his survival.With the help of this example we can see that wealth is very important as compared to income.

Income inequality is high in U.S as per the data U.S is ranked 10th among the countries who have income ineuqality before taking into considetrations the taxes and tranfers.France, the U.K. and Ireland are the top three countries which have unequal income distribution. But U.S is ranked second in income inequality after the taxes and tranfers are taken into consideration.

This is so because 1/4th of the worker level of U.S which comprises of the nurses,the staff of fast food chain etc. earn less than $10 per hour.There annual income is as low as about $ 20000 which is very low.The facts says that after the financial crises in the year 2008 the rich got more richer and the poor people started fighting for their survival.During the period starting from the year 2000 to 2006 the poverty has increased by 15%.These workers do not have a medical insurance for themselves and their families.The reason behind these inequality are the outsourcing of cheap labour and unfair exchange rates.Technology has also taken place of the workers resulting in the income inequality.The top 1% population of rich people have a total of 40% of the total wealth.Out of which U.S has 25% of total wealth.

These facts and figure shows that there is a high pace of income inequality in U.S.