Economics of Public Issues (20th Edition) (The Pearson Series in Economics)
20th Edition
ISBN: 9780134531984
Author: Roger LeRoy Miller, Daniel K. Benjamin, Douglass C. North
Publisher: PEARSON
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Question
Chapter 11, Problem 3DQ
To determine
The way by which the rise in the retirement plans have affected the conclusion about inequality.
Concept introduction:
Inequality:
Inequality is a type of discrimination based on income and other aspects of an individual. According to Karl Marx, the inequality of income has increased in the market because labors are exploited at an extreme level. Hence, the rich becomes richer and poor becomes poorer, thereby widening the inequality gap.
Explanation:
- As per the new statistics, the income inequality has decreased significantly. However, the capitalist economy states that the gap has widened. The fact that income inequality has been stagnant for most of the people, calls for contemplation.
- The exclusion of private retirement plans has made the inequality statistics wrong. If the rise in such plans is included in the calculation of inequality, then it will certainly increase the level of inequality existing in an economy.
- Income statistics highlights the rising income or wealth of the individuals. This has led to an increase in the income of the people of the lower income group rather than the richer section of the society. Therefore, the level of income inequality might fall.
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