National Income Distribution

Income Distribution in the United States

Introduction

One of the most significant economic issues in the United States is the distribution of income. The American economy is among the richest and most productive in the world; however, there are disparities among members of our society when it comes to income levels. This paper will examine the current state of income distribution in the United States and analyze how the income distribution affects the economy, the political system and social conditions.

Background

The distribution of income in the United States refers to the percentage of national income that is held by different income groups. The majority of income in the United States is held by the top 10 percent of earners. Inequality has been an issue in the United States since the country’s inception. While there have been many efforts to reduce the level of inequality, it still remains relatively unchanged in most economic metrics.

Analysis

The unequal distribution of income in the United States has various implications on American society. The most obvious implication is that the vast majority of the population does not have access to the same opportunities as those in the upper classes. This can lead to a social structure in which there is a clear division between the haves and have-nots, which can lead to frustration and discontent among those without the same economic resources.

The unequal distribution of income can also have an effect on the political system. Wealthy individuals and corporations often have greater influence in the political process due to their ability to donate large sums of money to political campaigns. This can lead to policies that favor those with greater wealth and can lead to a situation in which government policies favor those with greater economic resources.

Finally, the unequal distribution of income can affect the economy as a whole. Low wages and a lack of economic opportunity lead to lower consumption among lower income households, thus reducing consumption and economic growth. This can have a ripple effect that not only affects those at the lower end of the income scale, but can also lead to a slower rate of overall economic growth.

Conclusion

The unequal distribution of income in the United States is an issue that has become increasingly important in recent decades. The implications of the income distribution on the American economy, the political system, and social conditions are significant. Therefore, it is important that policy makers take the necessary steps to address this issue and create a more equitable distribution of wealth in our country.

Income distribution in China refers to the way the national income is allocated among different individuals and groups in China. In the past decades, China’s economy has grown steadily and rapidly and the level of economic development has improved significantly. This growth has enabled the nation to increase its income per capita substantially. It has also created opportunities for rising living standards, better social welfare and reduced income inequality. However, the income distribution in China has continued to be highly skewed and largely regressive.

An important factor driving China’s skewed income distribution is its dual- track economy, which has created a structure of two broadly separate labour markets—one for rural workers, and another for urban employees. Rural labourers in China are typically poorer and more disadvantaged, in comparison to those in the cities, because of lower wages, more limited access to social security, and lack of well- paying jobs. In addition, due to the hukou system, which restricts rural migrant workers’ access to social security in the cities, they have to bear higher costs of living in cities than their urban counterparts. This has caused a vast difference in terms of income distribution between rural and urban areas.

Besides that, the different ownership structures of enterprises can contribute to the inequitable distribution of income in China. A massive state- owned enterprise sector continues to exercise considerable control over large swaths of the economy, resulting in around 40% of income in 2015 being earned by the state sector. Meanwhile, the share of income earned by households decreased from over 80% in 1978 to around 60% in 2015. Hence, these ownership structures, combined with weak labor protection, create an environment where wages of workers are often kept low, thus resulting in an inherently unfair distribution of income among different sectors of society.

Finally, the relatively fragmented social security system in China is also responsible for the poor income distribution. This system fails to provide adequate social protection for those with insufficient income, including pensioners, children, rural migrants and those in the disadvantageous situation. As such, those who fall into those categories are unable to escape the poverty trap, and this contributes to the skewed income distribution in China.

To sum up, China’s income distribution is highly unequal, largely regressive and highly detrimental to social stability. It is therefore vital to address these issues directly in order to create a fairer, and more balanced, economic system