GROWING INCOME INEQUALITY

Growing Income Inequality

Growing Income Inequality

Proposal

The social policy problem I intend to address is growing income inequality among people which expands the gap between rich and poor. Inequality is a broader concept than poverty because it is defined in terms of total population though distribution of income is a growing concern of people. The solution I intend to propose is that government should take appropriate steps in order to minimize the growing income inequality among people as this is a social issue which may rise in the future that can create problem for the entire society. In particular, taxes on sectors which are exempted should be imposed, education level of people should be increased and government should encourage foreign investors to invest in local businesses. For this executive summary, I will be acting as a junior researcher for an NGO.

Problem Statement

The social issue that is addressed in the study is the growing income inequality among people, which widens or broadens the gap between rich and poor. Inequality is a broader concept than poverty as it is defined in relation to the entire population; however, with respect to income distribution, it is noted that there is a growing concern of people over income inequality.

Background

The study relates to growing income inequality, which is considered as the greatest risk in the next decade. Researchers identified that the growing income gap between rich and poor will create problems for the economy. Though some experts state that the unemployment in the U.S. and Europe may be permanently excluded from the rest of society; however, the numbers suggest that unemployment continues to rise in the next ten years which will bring negative consequences for the entire world.

The study maps and assesses the impact of equivalence scales as one the important factors affecting income inequality in society as an indicator of income inequality and on the order of households ranked by the amount of equalized income computed on the basis of specific equivalence scales. Income inequality is a natural part of every democratic human society. Basically, it is a measure of poverty, but also the degree of redistribution of the tax or social systems (Brison, 2012).

In addition to this, another most important long term risk is the debt problems of the developed nations. It is already clear that it will take many years for developed countries to reduce their debt, thus, it will also affect the income level of individuals.

Many economists are also concerned about the growing income gap as it may have harmful side effects. Income inequality has a questionable relationship to flourish as it can promote growth, because richer people invest more and people work harder if they receive financial incentives. But large income differences are inefficient because it prevents talented people in access to education and feed the anger that leads to populist politics which liquidate growth (Curry, 2012).

Even in more dynamic developing countries, inequality is an increasing concern. Most of the developing countries are under fire because people in these countries some are ...