distribution of income and wealth

distribution of income and wealth

the spread of material resources in a society This is an indicator of social inequality for, by identifying the trends in the spread of resources, it is possible to ascertain whether a society is becoming more or less equal. ‘Income’ refers to the material resources obtained in the form of wages and salaries; through social benefits and pensions; through interest paid on investments; and from rents. There is no precise definition of WEALTH, but it generally refers to the accumulation of resources, both monetary and non-monetary Although the number of'S elfmade’ rich people has increased, inherited wealth is still a vital element in any examination of who is wealthy Being wealthy is a relative notion. For example, there are a number of people who might be considered ‘super rich’ who own over one billion pounds. A Gallup Poll undertaken in 1986 showed that over two thirds of the population believed someone to be wealthy if their level of wealth was over £200,000. Coincidentally, this corresponded to the level of wealth enjoyed by the richest 1% of the population.

Examining the distribution of income and wealth is very difficult for three reasons:

  1. the data are often inaccurate;
  2. the most appropriate unit of analysis is difficult to determine and might refer to individuals or families or households;
  3. it is difficult to evaluate non-monetary assets.

The Royal Commission on the Distribution of Income and Wealth (1974-79) used income tax returns to examine income distribution, supplementing its findings with data from the FAMILY EXPENDITURE SURVEY and the New Earnings Survey. Between 1976 and 1977 it found that the top 50% of the population received 75.9% of all income. Taxation slightly reduced this. Between 1979 and 1989, however, there was evidence of widening inequalities in income distribution. Between 1979 and 1987, for example, the top 20% of earners in the UK enjoyed a 22% increase in income, which is six times that of the bottom 20%. The Royal Commission found that wealth distribution, so far as it could be determined, was less equally distributed than income. That trend has continued. Between 1979 and 1988 inequalities in both disposable and final incomes widened. (‘Final income’ refers to ‘disposable income’ after the payment of indirect taxes, such as VAT and the council tax, and after the receipt of government benefits such as health and education services.)

All the evidence is that inequality has increased over the last two decades. This increase appears sharper in the US and UK, where the new economic policies associated with THATCHERISM have been especially pursued, and less in Europe where they have not. On a world-scale – and one aspect of GLOBALIZATION – the gap in incomes between the richest and poorest nations has also increased. See also POVERTY, CLASS, UNDERCLASS.

References in periodicals archive ?
The distribution of income and wealth in the United States has grown increasingly unequal, according to the Federal Reserve.
Currently, 63% are satisfied with the opportunity for a person to get ahead by working hard, compared with 32% who are satisfied with the distribution of income and wealth.
The author notes that researchers have observed a steadily widening gap in the distribution of income and wealth in the United States, with the top 5 percent of households accruing an increasing share of the resources.
(NBC News/Wall Street Journal) Gallup, January 2014 Extremely/Very important for the President and Congress to address Top problem: The economy 89% Where income distribution ranks: The distribution of income and wealth 57 Note: The distribution of income and wealth ranked 10th of the 19 issues Gallup examined.
Reynolds (Cato Institute) provides a guide to the growth and distribution of income and wealth in the US.
Distribution of income and wealth in the United States, 1998 Distribution of: Household Net Net financial income worth assets All 100.0% 100.0% 100.0% Top 1% 16.6 38.1 47.3 Next 9% 24.6 32.9 32.4 Bottom 90% 58.8 29.0 20.2 (Wealth defined as net worth -- household assets minus debt.) Source: Analysis of 1998 Survey of Consumer Finance data by Wolff, published in State of Working America 2002/2003, Lawrence Mishel, et.
13 A third hypothesis is that demographic changes, particularly the growth of households consisting of a single woman and her children, caused both the distribution of income and wealth to become more unequal.
Strict emphasis by policy makers on the efficiency objective either ignores the objective of equity or assumes the distribution of income and wealth is always equitable.
The distribution of income and wealth is described by the editors as "egalitarian." That is an odd word choice, particularly given that the extent of inequality is significantly different in urban areas than in rural ones.
Economic Fairness and the Distribution of Income and Wealth in the United States.
Perhaps because of this strongly held desire, Americans of all income classes tend to believe that the distribution of income and wealth is more equal than it is.
The question on the fairness of money and wealth distribution does not include explicit assumptions about the causes of the current unequal distribution of income and wealth, nor does it discuss or imply any particular course of action designed to remedy the situation.
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