Question

Income Inequality - Video Assignment

In this video you will learn some basic facts concerning the distribution of income in the U.S. and the Lorenz Curve that gives a graphic representation of the distribution. Next, the major causes of income inequality are discussed with real world examples. Third, the debate over income inequality, the gender pay gap, and income mobility implied by this debate is examined.  

Instructions:

1. After watching the following video write a one page reflection.
2. Your reflection must cover all the topics examined in the video.
3. Submit your assignment as a file upload..

https://www.youtube.com/watch?v=CHReFKy_Mi4&list=PL1oDmcs0xTD9Aig5cP8_R1gzq-mQHgcAH&index=1

Answer 1

Income equality existed throughout the world whether it’s a business or it’s an individual prospective. If we consider the Hollywood film industry there are some films which earn more than the usual revenue. On the other hand some films earn less or the marginal. As per example we can consider the movies like “The Avenger End Game” and the “Missing Link”, one move earned 2.5billon USD and the other one earned 25million USD, this is close to 1% of Avenger End Game movie. There is no system to distribution of the profit from the high earner to the low earner movies. Not only in businesses has the income inequality existed on individual as well. The actors like Robert Daddy Junior and Vin Diesel earns more than the other co-actors of then and the business men like Mark Zuckerberg and others earns more than the normal population.   Below are the reasons for income inequality in people.

BY Visual Appellation:

The slim, smart beautiful and tall people earn more than the people who are not physically look good. This is not the culture of the organization or ethics but this becomes the one of the biggest issue of income inequality.

The Gender Inequality:

Women are paid less than the men in the market. This discrimination is about 80% of women paid less than their counterpart men. This is not just due to the gender gap this is because women are the primary care giver of child. After having children if its father/mother takes voluntary leaves for the taking care of child then on economic terms it’s known as “Child Wage Penalty”. Parents need to borrow this penalty for taking care of their child. If a woman forcefully or intentionally becomes a primary care giver of her child then the income inequality existed on gender. After sometime if someone joins back to labour force then it will take some time to get back to her last positions and last compensation.

The Lorenz Curve:

As per the curve we can measure the distribution of total income among its population.

Figure: 1

If Lorenz curve becomes the figure 1, its states that the income is equally distribute among its countrymen and there is no income inequality or no income gap. On real scenario it’s not true there is income inequality among household. By the below diagram we will be able to point out this. On figure 2 we can able to see that the gap between the curve and the straight line increase the income inequality. As per data 20% of population of USA earns only 4% of total income, 40% population earn only 13% of total income, 60% earn 28% of total income and 80% population earns 50% of country’s income. By this we can easily estimate that rest of the income shared has been earned by the rest 20% of population. So in reality the income inequality exists.

Figure: 2

Lorenz curve can only estimates the income gaps among individuals but can’t depict the case of ‘Income Mobility’.

Income Mobility: Income mobility is a situation when someone stats earning and increased the income thereby. When someone recently joins labour force from education then he earns less and belongs to the 20% of the population who earns less when his/her income increases then he/she moves upward to the curve. So we need to take care of it also.

This income gap can’t be erased by decreasing the high earner because economist doesn’t permit to operate this action as it will not make someone better off not making others worse off.