Question

what are the five myths about income inequality by joseph stiglitz?

Answer 1

Myth 1-Inequality has never been worse

Inequality is not a big problem. If we take into consideration,taxes,transfers etc the inequality between the rich and the poor is not very large and is not growing at a great speed.

Myth 2-Money was not earned by the rich .

The rich get rich because they work for it and they work very hard.It has been found that working time for professionals who earned more increased while working time for low income earners has fallen.

Myth 3--The rich stay rich the poor stay poor

There are families which stay rich for generations .But at times wealth dispels through generations.Wealth which is collected by fearless entrepreneur or businessmen do not stay for long.. A certain percentage dissappears by the end of the second generation and a larger percentage by the end of the third.It is also possible that children born to poor parents may reach the top when they grow.

Myth 4--More poverty means more inequality..

Poverty and inequalityare not the same .It has been seen that poverty rates rise even when inequality level has remained steady but poverty level fell during period when inequality rose.

Myth 5- The political process gets misrepresented because of inequality.

It is generally felt that  inequality distorted the political process which favored the rich and punished the poor.The federal government spends a huge amount everyyear for welfare of the poor people.