Inequality and the Rich-Poor Divide

Paper Summary:

Are the rich getting richer and the poor getting poorer? The author brings a variety of articles that discuss the concept of inequality and how serious it really is. One article shows how income and wealth are not the same thing, another shows how rich and poor groups keep on changing, yet another discusses whether inequality is actually a problem, and finally an article defining the poverty gap as both income and asset poverty. There are differing views on what inequality consists of and what is problematic or just a product of the natural economy. The author concludes with these unresolved arguments and shows how complex the situation is.

From the Paper:

"An article published in the Multinational Monitor titled "The Wealth Divide: The Growing Gap in the United States Between the Rich and the Rest" presents an interview with Edward Wolff, a professor of economics at New York University. The article provides information on the wealth gap in the United States, starting by noting that there is a difference between wealth and income. Wolff describes how wealth refers to the things that people own, including a home, real estate, shares, general belongings, and savings. One of the important things about wealth is that it determines how much income a person needs. For example, a person who owns their home outright and does not have a mortgage will be better off than a person who does not own their home, even if the two individuals have the same level of income. The other important point about wealth is that it provides a measure of security when individuals are unable to produce income for any reason. Wolff also describes trends and statistics regarding wealth in the article. These statistics include that in 1998, the richest one percent of households had 38 percent of all wealth and that the gap between the most wealthy and the least wealthy becomes constantly larger. This shows the extent of the inequality that exists in regards to wealth. It also shows how the wealthiest people make up only a small amount of the total population, yet have over one-third of the wealth. This shows that inequality does not exist only in regards to income, but is equally concerning in regards to the distribution of wealth."

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