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income_inequality

income_inequality - Income Inequality two ways of thinking...

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Income Inequality two ways of thinking about distribution of income relative income inequality - the amount of income the poor have relative to the rich absolute deprivation - the amount of income the poor have relative to some measure of “minimally acceptable” income Trends in income inequality in US (Table 17.1 ) measure of income inequality= % 20 _ _ _ _ % 20 _ _ _ _ top income of share bottom income of share •1967-1975: decrease in income inequality •1980-2004: big increase in income inequality Income inequality in US versus other OECD nations (Table 17.2 ) “The share of income received by the lowest quintile in the US is smaller than in any other nation, and is less than half of the worldwide average. The share of income received by the highest quintile in the US is higher than in any nation except Mexico, and is nearly 25% higher than the worldwide average.” (482) Poverty Rate poverty line - the federal government’s standard for measuring absolute deprivation poverty line developed in 1964 •used nutritional standards to determine minimally acceptable diet •priced out the cost of buying this bundle of goods for families of different sizes •multiplied food bundle cost by three (average family of 3+ spent 1/3 of budget on food) •these amounts have simply been updated for inflation ever since Poverty Lines by Family Size (2006) Size of family unit Poverty line 1 $9,800 2 $13,200
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