America is known to be one of the highest economies in the world but what many people do not know is that the number of poor people in the country is still on the rise. Even up until today income inequality in this country is still rising steadily. So for those who are interested to know, here are some facts about the income gap in America.
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, it can actually be seen that the rich are clearly hogging all the money that is circulating in the country. It is for this reason that there are rich people as well as super rich people and a lot of slum areas in the country. Of course as for the middle class, they also get a share of the wealth generated by the country but most would still go to the rich.
Now the OECD was able to do a study on this. In this study, they surveyed the income generated by eighteen different countries between 1975 to the year 2007 and how these countries distributed the money to their citizens. Now what they found out was that in the US, the majority of the wealth generated in the country were actually all hogged by the rich.
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.
Of course one will now tend to ask himself whether this is actually a good thing or a bad thing. Now the common argument in this situation is that the powerhouses like the CEOs and the firms are actually contributing to the economy because they are wealth generators. They will be able to contribute to a better economy through exports and would also contribute to bigger taxes for the government.
On the other side of the coin, some economists would argue that it is unhealthy because having a high poverty rate and unemployment. With all the wealth being wealth being tipped at the rich people, the poor people do not have much spending power. When this happens, the country will not be able to benefit from all the population which is bad for the long term.
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, it can actually be seen that the rich are clearly hogging all the money that is circulating in the country. It is for this reason that there are rich people as well as super rich people and a lot of slum areas in the country. Of course as for the middle class, they also get a share of the wealth generated by the country but most would still go to the rich.
Now the OECD was able to do a study on this. In this study, they surveyed the income generated by eighteen different countries between 1975 to the year 2007 and how these countries distributed the money to their citizens. Now what they found out was that in the US, the majority of the wealth generated in the country were actually all hogged by the rich.
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.
Of course one will now tend to ask himself whether this is actually a good thing or a bad thing. Now the common argument in this situation is that the powerhouses like the CEOs and the firms are actually contributing to the economy because they are wealth generators. They will be able to contribute to a better economy through exports and would also contribute to bigger taxes for the government.
On the other side of the coin, some economists would argue that it is unhealthy because having a high poverty rate and unemployment. With all the wealth being wealth being tipped at the rich people, the poor people do not have much spending power. When this happens, the country will not be able to benefit from all the population which is bad for the long term.
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.
No comments:
Post a Comment