Income inequality is an economic, social and moral issue that has gained increased attention in the United States and other developed economies since the 1980s. It refers to the unequal distribution of income among members of a society, or between genders.
Income inequality measurement is based on the Lorenz curve which plots the amount of income against the number of individuals in an organization. In 2018, individuals in the top 10% of earners took home 40% of aggregate national income, up from 37.6% in 2017. The top 20% also saw its share rise from 53% to 54%.
In comparison, individuals in the bottom 20%, or bottom 40%, saw their portion shrink from 9% in 2017 to 8% in 2018. According to data released by Thomas Piketty at the Paris School of Economics and Emmanuel Saez at UC Berkeley from 2013 to 2016, global income inequality reached its highest level since 1913.
Global inequality
There are many aspects of income inequality that have been studied. Global income inequality is evaluated by taking a country’s economy as a whole. Globally, the most unequal countries are clustered in East Asia and the Pacific region.
After these two regions, the world’s most unequal countries are clustered in sub-Saharan Africa. These regional distributions are significant, because sub-Saharan Africa had the least unequal income distribution in the world in 1995, and the most unequal in 2007.
Income inequality in the United States
In the United States, income inequality is measured by the Gini index. The Gini index is most commonly used to compare income inequality across countries. The Gini index is a number between 0 and 1, with 0 representing perfect equality and 1 representing perfect inequality. The U.S. Gini index increased from 0.44 in 1979 to 0.53 in 1989.
Since then, the U.S. Gini index has been on a gradual downward trend, reaching 0.48 in 2007, and then 0.44 in 2012. The increase in income inequality between 1979 and 1989 was mainly due to the rising income of high-income individuals. Income inequality between 1989 and 2007 was mainly due to rising income inequality within the top 1% of earners.
Gender inequality
Income inequality is not only found among members of a given nation. It also exists within different cultures. Gender inequality is one such example. The World Economic Forum (WEF) has conducted a survey, titled The Global Gender Gap Report since 2006, to measure and analyze the level of inequality between genders in the different countries of the world.
They have measured and analyzed the level of disparity in four areas: economic participation and opportunity, health and survival, education and skills, and political empowerment. The report has found that the Nordic countries have the least amount of gender inequality, while the Arab countries have the highest level of gender inequality.
Social inequality
Another form of income inequality that has garnered significant attention is social inequality. This type of inequality concerns the unequal distribution of wealth and privileges within a community, such as race, age, education, and status.
This type of inequality is commonly found in developed countries. In the United States, there is an enormous amount of inequality among racial and ethnic groups. Income inequality is also high among educational groups, such as high school and college graduates.
Moral implications of income inequality
Many people believe that income inequality is immoral and unfair. There are many moral implications of income inequality. One moral implication of income inequality is that it can affect society negatively. A society with a large amount of income inequality is more likely to experience many negative consequences. Some of the moral implications of income inequality include the following:
– Income inequality can lead to social unrest. Many people believe that income inequality is unfair, and a large percentage of them will want to fix it. A large percentage of these people will not agree with the existing social norms and will want to change these norms. If these people are a majority in a society, they will want to address the inequality that they feel is unfair. Income inequality can lead to social unrest if it truly is unfair.
– Income inequality can cause a society to be less safe. A society with high levels of income inequality is more likely to experience crime and violence. If this happens, the government has to spend more money to protect its citizens. If the government is spending more money to protect its citizens, it cannot spend as much money on other things, such as infrastructure. This will hurt the country’s overall well-being.