6. Income inequality a. Please explain the factors that have contributed to incr

Question

6.   Income inequality
a.   Please explain the factors that have contributed to increased income inequality since
1969,
i.   Discuss each of the following as it contributes to increased income inequality.
1.   Greater demand for high skilled workers
2.   Demographic changes
3.   International trade, immigration, and the decline of unionism
4.   The great recession of 2007
5.   Any other factors that you can identify
b.   What are 6 results of the growing income inequality in America and what can we do to correct this growing problem?
i. For each of the items listed above, discuss what might be done to eliminate the problems that cause growing income inequality

c.   Explain how discrimination reduces domestic output and income,
i.   Look at the items under Discrimination in the notes and discuss how each contributes to the reduction of domestic output and income.
d.   Explain the difference between Social Insurance Programs and Public Assistance
Programs, and give 3 examples of each. i.   Social Insurance
1.   What is it?
2.   Explain the 3 examples relative to what they do for the beneficiaries of each program.
ii. Public Assistance
1.   What is it?
2.   Explain 3 of the examples relative to what they do for the beneficiaries of each program.
e.   Discuss the pros and cons of reducing spending on these two types of programs relative to stimulating economic growth.
i.   Some Google research should help with this.

Explanation / Answer

1.   Greater demand for high skilled workers

We often tend to forget history too soon, The workers that made the nation great were the workers working in the world war II period, Their skills were absolutely useless later on after the war, So they just become unemployed and useless

2.   Demographic changes

Demographic changes contributed to the problem, Lower fertility rate after great recession esentially made things much worse and only fewer young people were available for work

3.   International trade, immigration, and the decline of unionism

International trade is one reason, One World One market philosophy changed everything, Immigration have worsened job crisis for american workers and Decline of unionism has also contributed to easy lay off and hire and fire mechanism which just made workers life miserable

4.   The great recession of 2007

After 2007 companies found a great reason to layoff non-perfomers, They just removed most of the workers who were low performers. Housing crisis, credit crisis together contributed to unemployment. Now after even 9 years economy still is in very bad shape, Rich just withered off crisis with ease while poor just stuck in quick sand.

5. Free trade:

US has written a blanck cheque to china. Today there are no factories in US, Most of the goods in walmart come from China and most of the things that we do with mind are made in India. What do we do ? We just consume goods from China and enjoy services from India. writing them billions of dollars worth of cheques

Income inequality arises due to all the above factors. There is no way an american worker can make products at the same price as chinese workers. Globalization must have some protection towards US workers but esentially most of the profit is made by large corporations and neither workers in both countries ever benefit from the trade.

This creates poverty in both countries.

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