Monday, December 5, 2011

Income Inequality

One way to define income inequality is by the ratio of income at high percentile to low percentile. If the ratio has increased, then income inequality has increased or widened. As shown in class, the U.S. is growing through a period of increased income equality. But, what this article shows is that many European countries, more specifically Britain are experiencing the same phenomenon. In Britain, the ratio of income at high percentile to low percentile is 12, which means that the top 10% is earning 12 times as much as the bottom 10%. The article mentions that the rich are working more when the poor are working the same amount of hours, which I thought was interesting because it goes against the normal supply curve of labor.

http://www.guardian.co.uk/society/2011/dec/05/income-inequality-growing-faster-uk


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