Income Inequality Research Paper

Economic inequality is the differences found in various measures of the economy within individuals of a group, groups in a population, and among countries. (Huffington Post 1). Economic inequality is sometimes called income inequality, wealth inequality, or the wealth gap. (The Equality Trust 2). There are three main types of economic inequality. Income, is the extent to which income is distributed unevenly in a group of people. Income is not just the money by pay, but also money received from employment, investments, shares of stock, savings, state benefits, pensions and rent. Pay inequality is a person’s pay, which is different from income. Pay refers to payment from employment only. This can be on hourly, monthly or annually based. Wealth
(Williams, Zoe 2). Poverty and inequality are not the same, however poverty does play a major role in economic inequality. People in poverty are those who are considerably worse-off than the majority of the population. At their level of deprivation they are unable to access goods and services that most people consider necessary for an acceptable standard of living. (Howarth, Robert B 6). Poverty is defined as having a household income which is less than 60% of median income (Howarth, Robert B 13). Inequality refers to the difference between levels of living standards, and income, across the whole economic
The middle class promotes education and investment, it brings in social interactions and civic engagement. John Maynard Keynes known as the economist that came up with Keynesian economics and Keynesian theory, said that “one of the core connections between the middle class and economic growth is that stable middle class consumption is needed to spur investment”. (Huffington Post 18). Investment drives economic growth, but sufficient overall levels of consumption are needed to make those investments. So during a recession demands are up, hoping that it will stimulate consumption. People often blame the wealthy for consuming all of our money, but in reality the wealthy save more than the middle class and consume less. This means that when incomes are stagnant, there isn’t enough demand in the economy to encourage productive investment. (Huffington Post 25). In order to spur sustainable economic growth, the middle class needs to be able to consume, and for that to happen their incomes need to