Income Distribution in the U.S Essay Example | Topics and Well Written Essays - 2250 words

Income Distribution in the U.S - Essay Example It looks at the income that the rich and the poor are getting. It also critically looks at the factors that can lead to income distribution inequalities like taxing, technology and globalization. It helps in explaining various theories like human capital and economic discrimination. For this purpose, it helps an economy to come up with ways to reduce the gap between the rich and the poor. It has been a global concern in fighting poverty. Even though poverty can not be fully eradicated it can be reduced. It is important to look at how factors of production are distributed within an economy. How easy it is for every individual to access these factors is another way to know how well the income is distributed within an economy (Richard, pp.345-450). It is important to look at the income distribution trends in America to find out how the gap between the rich and the poor can be reduced. Very many economists are interested in fighting the gap between the rich and the poor. The gross domestic product (GDP) has been refuted in telling if the citizens of a country are rich or poor. Many economists argue that a country can have a very high gross domestic product but it is only being produced by 10% of the citizens who are the elite and affluent people of the society. The Gini coefficient has been used by the American economists to tell if the country has equal distribution of income. It can simply be said that some professions are well paid but others earn very low wages (Richard, pp.345-450). It is notable that 1948 to 1968, the Gini coefficient reduced. When the Gini coefficient reduces then it means that the citizens’ income per citizen is increasing. Thus between those years the income inequality in America had reduced meaning that families were receiving more income than before. On the contrary, the Gini coefficient increased between 1968 and 1998, this meant that the