Income & Wealth Inequality
Nick Name
Income Inequality
Income Equality measure the difference in incomes between the rich and poor.
- There are multiple ways do measure it
- A common way to measure it is using the Gini Coefficient
- The Gini coefficeficient ranges from 0 to 1.
- The higher the coefficient, the more unequal things are
- There is no set definition for who is rich and who is poor
- Looking at the top 1% is a common metric for those who are "rich"
- Looking at average incomes for entry level employees or minimum wage is a way to analyze those who are "poor"
- A common way to measure it is using the Gini Coefficient
- Also referred to as "The Wealth Gap"
Contributors Vs. Leaches
- One theory is that people/firms who leach on the financial system increase inequality:
- Example: JP Morgan Chase & Jamie Dimon
- Jamie Dimon did not create the firm, but is a billionaire from it
- JP Morgan pays it's CEO and Executives huge compensation packages, but barely pays deposit holders anything
- Example: JP Morgan Chase & Jamie Dimon
- This is in contract to people/firms that create value by making or improving the way we live:
- Examples: Henry Ford and the assembly line; Edison and the light bulb
Concerns As of 2018
Inequality Throughout History
- Recent inequality is nothing new
- Almost every civilization has experience it - it's natural to humans
- Typically ends with
- Revolution: the people revolt and redistribute wealth
- war/sickness/famine/natural disasters: many people die