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Income Inequality

ISU IF1 Financial English Group Presentation
by

Henry Lee Mou Yen

on 19 December 2016

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Transcript of Income Inequality

We'll show you..
THE UNBELIEVABLY SWEET ALPACAS!
Wherever there is great property,
there is great inequality.
So, What Causes Income Inequality ?
Cute animation about income inequality
$1.25
Wednesday, November 19, 2014
Vol F. Eng.
National Gini Coefficient
WTH is this "Income Inequality" ?
The Effects of Income Inequality
Why Does it Matter?
1) There's a wide and growing gap in how much parents invest in their kids. High-income families spend increasingly more on tutoring, art, sports, books, and so on relative to low-income families.

2) The academic achievement gap on standardized tests between students for low-income versus high-income families has increased by 40% over the last 30 years, the period of rising inequality.

3) College attainment has increased much more among kids from wealthy families. The wealthier your family, the more likely you are to go to a top-tier college.
Income Inequality
Possible Solutions
Can We Solve This Issue?
Equality of opportunity, still?
USA Market
“The extent and continuing increase in inequality in the United States greatly concern me. I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity”
-Janet Yellen, US Federal Reserve chairman
References:
http://www.wikiwand.com/en/Reaganomics
http://www.wikiwand.com/en/Trickle-down_economics
https://www.cia.gov/library/publications/the-world-factbook/
http://www.cbo.gov/publication/49440
http://www.cbo.gov/sites/default/files/cbofiles/attachments/49440-Distribution-of-Income-and-Taxes.pdf
http://www.forbes.com/sites/taxanalysts/2014/03/26/why-raising-taxes-on-the-rich-is-important/
http://www.usni.org/store/books/forthcoming/lucky-few
http://www.prb.org/Publications/Articles/2008/luckyfew.aspx
http://www.cbpp.org/cms/?fa=view&id=3629
http://www.bloomberg.com/news/2013-03-13/taiwan-shrinks-wealth-gap-as-xi-s-communists-struggle-in-china.html
https://publications.credit-suisse.com/tasks/render/file/?fileID=BCDB1364-A105-0560-1332EC9100FF5C83
http://www.therichest.com/rich-list/poorest-list/10-countries-with-the-worst-income-inequality/
http://www.cbsnews.com/news/oecd-says-chile-has-widest-inequality-gap/
http://www.bloomberg.com/news/2014-04-28/gap-between-rich-poor-worse-in-china-than-in-u-s-study-shows.html
http://en.wikipedia.org/wiki/List_of_countries_by_income_equality
http://money.cnn.com/2014/01/21/news/economy/growing-income-inequality/
http://www.forbes.com/sites/jamespoulos/2013/12/31/how-income-inequality-really-matters/
http://www.federalreserve.gov/newsevents/speech/yellen20141017a.htm
http://www.forbes.com/billionaires/
http://www.theguardian.com/money/2014/oct/17/federal-reserve-chair-janet-yellen-inequality-gap-rich-poor
http://www.bostonfed.org/live101714/
http://www.politico.com/magazine/story/2013/12/income-equality-ripple-effect-john-podesta-100891.html#.VGiL0PmUchN
http://eng.stat.gov.tw/ct.asp?xItem=3458&CtNode=1597&mp=5
http://www.salaryexplorer.com/salary-survey.php?&loctype=1&loc=212
http://www.independent.co.uk/news/world/worlds-first-trillionaire-is-alive-today-9326532.html
http://www.telegraph.co.uk/finance/10808915/World-could-see-first-trillionaire-in-25-years.html
http://china.ahk.de/fileadmin/ahk_china/Marktinfo/Studies/2013_GCC_Wage_and_Salary_Report_Public_Version_01.pdf
http://www.nytimes.com/2013/07/20/world/asia/survey-in-china-shows-wide-income-gap.html
http://stats.oecd.org/Index.aspx?DataSetCode=IDD
http://inequalityforall.com/fact-4/
http://en.wikiquote.org/wiki/Adam_Smith
http://en.wikipedia.org/wiki/Want_Want
http://data.worldbank.org/indicator/SI.POV.GINI
http://www.nytimes.com/2013/12/16/opinion/krugman-why-inequality-matters.html
http://www.jstor.org/stable/1811581
http://mixedmeters.com/2012_08_01_archive.html
http://www.neweconomics.org/blog/entry/this-is-how-we-solve-economic-inequality
etc.

Final Update: November 17, 2014
Beginning in the 1979, economic growth slowed and the income gap widened.
Reaganomics
refers to the economic policies promoted by U.S. 40th President
Ronald Reagan
during the 1980s. These policies are commonly associated with supply-side economics, referred to as
trickle-down economics
by political opponents and free market economics by political advocates.
Trickle-down Economics
Their idea was that giving more money to rich people would benefit everyone because the rich would use that money to hire the poor.
Result
Brief History of Income Inequality
National Gini coefficient is a number between 0 and 1, where:

0 = perfect equality
(everyone has the same income);

1 = absolute inequality
(one person has all the income, and everyone else has zero income).
It's the gap between the rich and the poor.
It's the state of affairs in which assets, wealth, or income are distributed unequally among individuals, or population, or even countries.
-Adam Smith
"Imagine three types of wealthy people. One guy is putting his capital into building his business. Then there’s a woman who’s giving most of her wealth to charity. A third person is mostly consuming, spending a lot of money on things like a yacht and plane. While it’s true that the wealth of all three people is contributing to inequality, I would argue that the first two are delivering more value to society than the third. I wish Piketty had made this distinction, because it has important policy implications."
-Bill Gates
"Taxation is not only a way of requiring all citizens to contribute to the financing of public expenditures and projects and to distribute the tax burden as fairly as possible; it is also useful for establishing classifications and promoting knowledge as well as democratic transparency."
-Thomas Piketty
1. Make high-quality education available to all
- Increase the supply of skilled labor, and reduce the income inequality due to education differentials.

2. Minimum wage legislation
- Raise the income of the poorest worker, for the ones that don't lose their jobs due to a minimum wages.

3. Nationalization or subsidisation of products
- Providing goods and services that everyone needs cheaply or freely (such as food, healthcare, or housing).
- Government can effectively raise their purchasing power of the poorer members of the society.

4. Progressive taxation
- The rich are taxed proportionally more than the poor, reducing the amount of income inequality in society.

5. Unionization
- Organization may reduce income inequality by negotiating standard pay rates.
Global Overview:
=
Labor
Demanded
Labor
Supplied
They were born just too late to be World War II heroes and just too early to be New Age firebrands
Therefore..
http:// youtu.be/aTOK_3JNfuA?t=19s
5m37s
http:// youtu.be/C2tET0EzzcI
57m09s
Full transcript