Income Inequality Definition With Example

Examples of income inequality in a sentence how to use it.

Income inequality definition with example. Economic inequality refers to the inequality in terms of wealth distribution and opportunities among people belonging to different groups communities or countries. Consequently there will be an increase in both growth rate and income. Income inequality is the extent to which income is distributed in a population. The great recession of 2008 is a prime example of how dramatically income inequality can impact a country.

Income inequality is defined as an unequal distribution of income between the masses or a situation when a large proportion of total income is held by the small percentage of the population which is possible due to various reasons such as the variation in sources of income number of dependents easier availability of resources etc. In the united states that gap between the poor and the rich has expanded immensely over the past ten years. Income inequality usually compares socioeconomic groups. Its increasing trend indicates more disparity which can be appropriately expressed with the cliché the rich get richer while the poor get poorer.

The difference between the top and bottom incomes in a company is the wage ratio. Income inequality refers to the disparity in earning between top earners and the bottom earners tanzi and chu 21. Income inequality is a constantly debated topic today with different opinions and solutions. The less equal the distribution the higher income inequality is.

We usually express income inequality in percentage terms. However it may also compare the incomes of men versus women or white people versus african americans. For example if the ceo earns 10 000 000 per year and average worker s pay is 50 000 the wage ratio is 200 1. Income inequality includes wages and other incomes such as dividends investment income sales of things etc.

Working and middle class incomes became stagnant in the early 2000s which resulted in an increased demand for credit and in turn an unsustainable credit bubble for the majority of americans. Income inequality is how unevenly income is distributed throughout a population. Definition and overview of income inequality.