BA Income Inequality

What is the turning point where inequality began in great scales?

After the Great Recession

What is the elephant chart?

Who are the winners?

Emerging economies (China, India, brazil)

What characteristics do the “winners” have?

• They have strong central governments 

• have space to build factories and stuff from other countries 

• Good infrastructure and low wages are major advantages

What was the location of the “winners”

They were by the ocean + they were poor so it was easier for nations to come in

Why were the “loosers”

the countries that were extremly poor and had a bad goverment so they were not attractive

Who were the loosers?

• Middle class and lower middle class in Industrialized countries

• Africa (poor) 

Why was the middle class affected?

Jobs for them decreased due to

• Technology 

• Outsourcing and competition from emerging economies

In the United States, what drives the economy?

the middle class because they have enough money to buy stuff and spend their money, which just makes a big chunk of the demand in the world.

Why is the middle class crucial in the USA?

because it is so much of the employment as well as so much of the consumers

What are the % of how much of the income goes to which class in the USA?

• 62% of the income went to the Middle class

• 29% of the income went to the Upper class

• 10% of the income goes to the Lower class

What is the Lorenz Curve representing?

curve of inequality

Explain the lorenz curve

The straighter the line is the less inequality there is that nation, and the more the curve is curved there is more and more inequality

What is the Gini Coefficient?

is what messures the area between the straight and the curved line 

What are taxes?

Money that you give to the goverment 

What are transfers?

Money that you GET from the government (like FAFSAm social security, employment benefits etc) 

Why would there be taxes AND transfers?

The goal is to even out inequality

Before taxes and transfers, what are the countries that have the most enequality?

The USA and UK

What is the century that seems to be doing the best with taxes, transfer inequality?

South Korea

How has the USA been affected or not by inequality in a timeline?

Inequality was very high, than WW2 brought it down and now its just higher and higher

Why is inequality growing so much in the United States?

Tax cuts benefit the Rich

Liberalization and deregulation are 2 important reasons as to why inequality is growing in the USA, what does this mean?

Liberalization means reducing government control over the economy

Deregulation specifically means removing government rules and limits on industries.

What is the issue with liberalization and deregulation?

That it usually only benefits the wealthy 

What did the decline of labor union cause?

it has weakened worker bargaining power and especially harmed Black workers, who historically gained the most from union representation.

Who was Margaret Hilda Thatcher?

• was the longest-serving British prime minister of the 20th century 

• the first woman to hold that office

• Iron Lady“ for her uncompromising politics and leadership style. 

(She was like really controversial because she benefited the economy, but not the poor) 

What is the social mobility in the USA? is it easy or hard?

The USA has low social mobility; the “American dream” is almost impossible.

The poorest Americans have only a 7% chance ti climb up 

What is the social mobility in Europe? is it easy or hard?

It is a lot easier to climb up if you are in Europe than in the USA Europeans tend to be more pessimistic 

What social outcomes tend to improve with income in developing countries?

In developing countries, higher income is linked to better life expectancy, health, education, and other social outcomes.

In developed countries, are life expectancy and education correlated with GDP?

No, in developed countries, social outcomes like life expectancy and education are not strongly correlated with GDP.

What factor is negatively correlated with life expectancy and other social outcomes in developed countries?

Income inequality — as inequality increases, life expectancy and other social outcomes tend to worsen.

What is the life expentancy in the USA?

Life expectancy in the U.S is the lowest in the developed world in spite of being one of the richest countries.

How are Homiside rates in the USA

Homicides rates in the US are by far the highest in the developed world.

In develop societies what tells the well being of people?

INCOME INEQUALITY