Rising income inequality is considered as a global issue. Over the last ten years, median household income has declined in many advanced economies that resulting median household easily trapped in the risk of falling into poverty. Based on the research, we found that the average income of the richest 10% of the population is higher nine times higher than that of the poorest 10%. After 20 years, some countries have developed the advanced technology to improve the productivity of 30% in industries sector. However, there would also 50% worker will encounter the risk of displaced.
With a declining population, the government’s economy will, too, decline due to the little occupations/participations, low amount of taxes, henceforth increasing the taxes for each individuals (however, mentioned previously, this may be a better solution). And lastly, the possibility of local residents traveling far to apply for the occupation in which one wishes for very likely due to the fall of employment (government.nl). This is what worries most governments, however, there more factors in which should be taken into consideration. Stated previously, taxes are more likely to increase for individuals in Germany due to increase of dependency ratio. Henceforth, individuals born in a year where the population has an uneven number of children, working age group, and retired people, they have the responsibility to pay more taxes for the abundance of retired elders.
This created an immense impact on human welfare. Life expectancy increased, infant mortality declined, and literacy had increased. A UN Human Development Report in 1997 concluded that “in the past 50 years, poverty has fallen more than the previous 500.”. The United Nations also reported in 2015 that 836 million people were still living in extreme poverty, but that is down from 1.9 billion and is considered to be at least progress (Crash Course Economics #16, 1:24). In the video Globalization and Trade and Poverty: Crash Course Economics #16, it reports that the World Bank also predicts that by 2030 the number of people living in extreme poverty could drop to less than 400 million, assuming that everything will keep improving (Crash Course Economics #16,
Elderly are vulnerable to economic instability. They are prone to higher risk of poverty due to withdrawal from work and health issues. Insufficient public transfer is not able to ensure adequate income of people after retirement. In most countries, poverty tends to increase with age. In other words, the older the individual, the higher chance of becoming poor.
This asset liability mismatch made thrifts vulnerable to the costs of high interest rates. With increasing inflation, competitive pressure and the high interest rates that thrift institutions had to pay, huge losses were incurred in early 1980s. Net worth of the entire industry approached zero, falling from 5.3 percent of assets in 1980s to 0.5 percent in 1982. DEFINING FEATURES OF THE CRISIS:- The S&L crisis of the 1980s was undoubtedly a failure of public policy and historically high interest rate. Financial deregulation transformed the character of the thrift industry.
One example of inequality in the US is black-white income inequality which still exists in the US. The income difference between median households of white and black has increased from $19,000 in 1967 to $27,000 in 2011. The average black household income composed 59% of average white household income in 2011, these percentage was equal to 55% and 63% in 1967 and 2007, respectively (Desilver, 2014). If discrimination because of skin color will be continued they will harm economy in some way because if these people will not have jobs they will increase the proportion of unemployed people in the country. The unemployment rate of black is two times greater than unemployment rate of white (Fields and Weller, 2011).
47% of the total US income is shared by top 20% of the population whereas just 5% income is shared by the bottom 20%. All these statistics indicate the extent of inequality among the citizens. The rich have become richer whereas the poor people have become poorer. After the richest citizens, next comes the population of executive officers of big organizations. 2.8 million dollars per year is their average compensation.
Global income inequality: When compared to other nations, the U.S. is one of the richest despite the severe income gap among its own citizens. Although many U.S. citizens are classified as low-income, their wages are still a great deal higher than citizens from poorer countries. Most of the world’s top 1% live in the U.S., increasing the overall national average income. Global inequality is also seeing a decline as developing nations develop and become industrialized. In spite of growing populations, especially in underdeveloped countries, the economic growth brought on by industrialization has helped many families escape living in poverty.
Causes of Economic Inequality: Inequality in earnings has increased two times in India over the last twenty years, making it the worst performer in this regard of all emerging economies. The top 10% of wage earners now make 12 times more than the bottom 10%, up from a ratio of six in the 1990s. Moreover, wages are not evenly distributed throughout the labour class. The top 10% of earners make almost five times more than the median 10%, but this median 10% makes just 0.4 times more than the bottom 10%. What then explains the rise in economic inequality?
Inflation has extended unexpectedly, mountain climbing from 7.7% in 2007 to nearly 12% for 2011, before declining to 10% in 2012 and to 2.11% in April 2015. Inflation rate in Pakistan averaged 7.99 %from 1957 till 2015, reaching an all-time high of 37.81% in December 1973 and a report low of -10.32% in February 1959. Pakistan suffered its most effective economic decline in GDP between 1951 and 1952. Corruption: Corruption is the alternative principal hassle of Pakistan. In Pakistan corrupt human beings have performed high ranks within the country.