Question

Income Inequality

What percent of total income in US is earned by the top one percent of earners? What are the contributing factors to growing income and wealth inequalities in US?

Answer 1

Income:

It is the income at the disposal of each household during the year. It includes self employment earnings, capital income, salary income, public transfers after deducting the income tax and social security tax.

Income inequality:

Income inequality can be defined as, there is a more concentration of money in the hands of the huge chunk of population as compared to the others. It is basically the gap formed between the rich and the poor.

According Federal Reserve report of 2016, top 1% of the U.S population possessed 39% approximately of the nation’s wealth. From the remaining, 90% population held 23% approximately of the wealth. Also, top 1% families had a record 24% approximately of all the incomes of the nation.

There are many factors which are to be blamed for such income inequality in the U.S. They are:

1. No flow of salary for the wage earner of U.S.
2. Reduction in tax for the rich
3. All time low in jobs provided by manufacturing sector
4. Inflation in stock market
5. More service jobs, less pay
6. Less investigation in labor disputes, decline in labor unions
7. Increase in skill based technology every day
8. Increase in immigrants
9. Globalization
10. Increase in dependency on automation