It is common knowledge that america is one of the superpowers in the world and has one of the biggest economies. What most people do not realize to see is that the income gap in america is really big even if the country is seemingly very prosperous. Here are some facts and information that would be discussing this economic issue.
Now before discussing the economic situation of this country, it is very important to first define the meaning of income gap. Now in a nutshell, income gap is the big gap in equality between the number of rich people and the number of poor people in a country. If one would put it in easier terms, this would be the income bracket.
Now in America, what is happening here is that the rich occupy a big amount of money from the country while the rest are left in poverty. The two classes are actually very high which means there are a lot of rich people and a lot of poor people. The middle class people on the other hand have a low share of the profits.
Now the OECD was able to do a study on this. In this study, they surveyed the income generated by eighteen different countries between 1975 to the year 2007 and how these countries distributed the money to their citizens. Now what they found out was that in the US, the majority of the wealth generated in the country were actually all hogged by the rich.
Now the reason as to why this is the case is simply because the US is a free market. Being in a very democratic country, the US supports the existence of a free market. Due to them being a free market, the wealth distribution among the people is not monitored by the government and the market is left alone to do whatever it wants.
Of course one will now tend to ask himself whether this is actually a good thing or a bad thing. Now the common argument in this situation is that the powerhouses like the CEOs and the firms are actually contributing to the economy because they are wealth generators. They will be able to contribute to a better economy through exports and would also contribute to bigger taxes for the government.
Of course there is also the other side of the story which claims that a high rate of poverty or unemployment will not be good for the economy. Now the thing about this is that with an unemployment rate, the people will not have much spending power. Of course when this happens, the country will not be able to get taxes from everyone.
So as one can see, this income inequality is one of the controversial issues that have sprung up in the US. Clearly many people still have the mindset that people should earn as much as they work. However, it can also be seen that as the unemployment rate in the country goes up, the economic growth in the long term may take a turn for the worse.
Now before discussing the economic situation of this country, it is very important to first define the meaning of income gap. Now in a nutshell, income gap is the big gap in equality between the number of rich people and the number of poor people in a country. If one would put it in easier terms, this would be the income bracket.
Now in America, what is happening here is that the rich occupy a big amount of money from the country while the rest are left in poverty. The two classes are actually very high which means there are a lot of rich people and a lot of poor people. The middle class people on the other hand have a low share of the profits.
Now the OECD was able to do a study on this. In this study, they surveyed the income generated by eighteen different countries between 1975 to the year 2007 and how these countries distributed the money to their citizens. Now what they found out was that in the US, the majority of the wealth generated in the country were actually all hogged by the rich.
Now the reason as to why this is the case is simply because the US is a free market. Being in a very democratic country, the US supports the existence of a free market. Due to them being a free market, the wealth distribution among the people is not monitored by the government and the market is left alone to do whatever it wants.
Of course one will now tend to ask himself whether this is actually a good thing or a bad thing. Now the common argument in this situation is that the powerhouses like the CEOs and the firms are actually contributing to the economy because they are wealth generators. They will be able to contribute to a better economy through exports and would also contribute to bigger taxes for the government.
Of course there is also the other side of the story which claims that a high rate of poverty or unemployment will not be good for the economy. Now the thing about this is that with an unemployment rate, the people will not have much spending power. Of course when this happens, the country will not be able to get taxes from everyone.
So as one can see, this income inequality is one of the controversial issues that have sprung up in the US. Clearly many people still have the mindset that people should earn as much as they work. However, it can also be seen that as the unemployment rate in the country goes up, the economic growth in the long term may take a turn for the worse.
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