econ 311 income inequality

econ 311 income inequality - ECON 311 Income Inequality...

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ECON 311 Anonymous Income Inequality March 24, 2008 Most would agree that the rich should not become richer at the expense of the poor. Yet, one of the biggest failures of the American government is the allowance of the current levels of income inequality. I would like to outline some examples regarding how bad the problem has become, and a plan to resolve this issue. To begin, there is evidence from the Economist studies that shows the great increase in income inequality. Take a look at these three examples: The increase in income for the bottom fifth of the earning population grew a mere 6.4% from 1979 to 2000. The income growth for the top 1% grew by 184% though. Over the course of the last thirty years, the real annual income for the top 100 CEOs has gone from 39 times the pay of the average worker to over 1,000 times their pay. In 2001, the top 1% of households earned 20% of the whole economy’s income. In addition to the growth in income inequality has been a lacking growth in economic mobility. One Indiana University study of 2,749 father and son pairs showed that over 29 years nearly 70% of the sons had either stayed in the same economic class as their fathers or done even worse and moved down. Of the fathers starting in the bottom quarter, only 10% of their sons moved up to the top quarter. It’s hard to say just one thing causes these inequalities and their growth. One of the problems is definitely the education system. The fact is that elite schools seem to want this trend to continue and they promote it by having “legacy” policies and other
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econ 311 income inequality - ECON 311 Income Inequality...

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