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Q-whatare some of the dimensions of economic inequality and what is consideredincome?
Albert Duncan 0 and 1.0. Zero indicates perfect equality (all recipients receive equal amounts of income), and 1.0 indicates perfect inequality (one recipient receives all the income). The US Census Bureau usually reports two measures of income inequality: the shares of aggregate household inoome received by the quintiles and the Gini index. The Gini index for the US was 0.430 in 2014 (DeNavas- Walt, Proctor, 8; Lee 2015). In the United States, according to Dadush et al. (2012), different data-collecting entities use different methods to calculate income. For example, the Congressional Budget Ofce (CBO) uses households as earner units using post-tax and transfer income. The US and, therefore, the US Gini index reported by the CBO rose from 0.48 in 1979 to 0.59 in 2007. However, the US Census Bureau's reporting gave a Gini index of 0.46 in 200?. This was due to a difference in the definition of income. The CBO's income definition is income before government taxes and transfers, but the US Census Bureau data only includes some transfers. The US Census Bureau also calculates the supplemental poverty measure, which is not a pretax money income like the ofcial poverty measure (Fox 201?). It adjusts income for government transfer programs, such as the Supplemental Nutrition Assistance Program, school lunches, housing assistance, and refundable tax credits. All these aim at helping low-income households and individuals that are excluded from the ofcial poverty measure. Wealth inequality deals with the distribution of assets, and in the United States, the Federal Reserve Bank prepares the distribution of wealth data. In explaining the differences between income and wealth, Galbraith (2016) refers to income, which includes wages, salaries, dividends, rent, interest, stock option realizations, and realized capital gains, as cash earned for economic activity. In his denition of marks! income, he excluded public pensions, unemployment insurance, and other subsidies and benets. As in the case of income distribution, calculation of wealth distribution 2 Capitalism and Inequality is done by different entities using different measurements, resulting in a disparity in outcomes. In fact, commonly, wealth is narrowly defined as financial wealth-namely, cash on hand and the money value of tangible and nonliquid assets. Even just the market valuation of financial portfolios is commonly used to define financial wealth. However, some may extend the definition to include the value of income streams and insurance rights that, for the most part, cannot be transacted or encumbered. These include Medicare, Medicaid, and Social Security. When such transfers and public assistance are included, the poor and many elderly could benefit, reducing the wealth disparity (Galbraith 2016). To obtain net wealth, the value of the debts are subtracted subtracted from the value of the assets. Galbraith stated that financial wealth is the most unequal and that much of the US population has no net financial wealth, and this is especially true for African American and immigrant households. Even for the middle class, the value of financial assets may be smaller than the value of a mortgage debt, held against housing. In measuring global poverty, the World Bank Group (2016) and the World Bank national accounts (2015) first created a measure of well-being that shows the differences in the quality of life across an entire population. To determine the standard for well-being, a survey was conducted. The survey determined the quality of life based on the data range of consumption and income, which is created by dividing the population into those with the highest and lowest of well-being. This is done in order to better compare the data, which are the monetary values that are given to different variables that establish a point where income and consumption are deemed insufficient to have good quality of life. When that point 3Capitalism and Inequality is done by different entities using different measurements, resulting in a disparity in outcomes. In fact, commonly, wealth is narrowly defined as financial wealth-namely, cash on hand and the money value of tangible and nonliquid assets. Even just the market valuation of financial portfolios is commonly used to define financial wealth. However, some may extend the definition to include the value of income streams and insurance rights that, for the most part, cannot be transacted or encumbered. These include Medicare, Medicaid, and Social Security. When such transfers and public assistance are included, the poor and many elderly could benefit, reducing the wealth disparity (Galbraith 2016). To obtain net wealth, the value of the debts are subtracted subtracted from the value of the assets. Galbraith stated that financial wealth is the most unequal and that much of the US population has no net financial wealth, and this is especially true for African American and immigrant households. Even for the middle class, the value of financial assets may be smaller than the value of a mortgage debt, held against housing. In measuring global poverty, the World Bank Group (2016) and the World Bank national accounts (2015) first created a measure of well-being that shows the differences in the quality of life across an entire population. To determine the standard for well-being, a survey was conducted. The survey determined the quality of life based on the data range of consumption and income, which is created by dividing the population into those with the highest and lowest of well-being. This is done in order to better compare the data, which are the monetary values that are given to different variables that establish a point where income and consumption are deemed insufficient to have good quality of life. When that point 3Capitalism and Inequality poverty. In the United States, the US Census Bureau defines the poverty status by comparing pretax cash income against a threshold that is set at three times the cost of a minimum food diet in 1963 (Frumkin 2000). It is annually adjusted for inflation, family size, composition, and age of the householder. In 2014, the poverty threshold for a family of four was US $24,230. The official national poverty rate was 14.8%. There were 46.7 million people in poverty in the United States. Another important measurement in analyzing global inequality and that poverty among nations is income per capita. It measures a country's standard of living and can show the relative economic performance of different countries. In using the measurement for different periods, the real gross domestic product (GDP) per capita is used rather than a nominal measurement in order to adjust for inflation. In comparing the developed and developing countries, there is a huge difference in real GDP per capita. According to Investopedia (2017), the vast differences in per capita GDP are exemplified by comparisons between developed and developing economies. At US $132,099, Qatar had the highest 2015 worker output in the world when adjusted for purchasing power parity (PPP), a measure that pegs each nation's currency to the US dollar for comparative purposes. By contrast, Ethiopia, which sits toward the bottom of the global scale, held a per capita GDP of US $687 in 2015. The marked disparity experiences a reversion when GDP per capita growth is examined. Ethiopia, in which crude exploration activity ramped up in 2014, experienced the highest global growth in output per worker in 2015, at 8.5%, whereas 5Capitalism and Inequality poverty. In the United States, the US Census Bureau defines the poverty status by comparing pretax cash income against a threshold that is set at three times the cost of a minimum food diet in 1963 (Frumkin 2000). It is annually adjusted for inflation, family size, composition, and age of the householder. In 2014, the poverty threshold for a family of four was US $24,230. The official national poverty rate was 14.8%. There were 46.7 million people in poverty in the United States. Another important measurement in analyzing global inequality and that poverty among nations is income per capita. It measures a country's standard of living and can show the relative economic performance of different countries. In using the measurement for different periods, the real gross domestic product (GDP) per capita is used rather than a nominal measurement in order to adjust for inflation. In comparing the developed and developing countries, there is a huge difference in real GDP per capita. According to Investopedia (2017), the vast differences in per capita GDP are exemplified by comparisons between developed and developing economies. At US $132,099, Qatar had the highest 2015 worker output in the world when adjusted for purchasing power parity (PPP), a measure that pegs each nation's currency to the US dollar for comparative purposes. By contrast, Ethiopia, which sits toward the bottom of the global scale, held a per capita GDP of US $687 in 2015. The marked disparity experiences a reversion when GDP per capita growth is examined. Ethiopia, in which crude exploration activity ramped up in 2014, experienced the highest global growth in output per worker in 2015, at 8.5%, whereas 5Albert Duncan is statistically defined, it is called the poverty line. There is also an established point that marks the minimum food consumption that can sustain life, which is called the extreme poverty line. That point will differ from one country to the next due to a change in the circumstances of the population, but the process remains the same. With that information, we can understand how many people live below the poverty line. In addition, the World Bank uses the International Comparison Program in order to create a benchmark to measure extreme poverty, which was at US $1.90 a day in the 2011 purchasing power parity (PPP). This would mean that at US $1.90, a person would be able to purchase a sufficient quantity and quality of food to meet his or her daily caloric need. Most of the world's extremely impoverished people live in Sub-Saharan Africa and Southern Asia. While over one in ten people live in extreme poverty globally, in Sub-Saharan Africa, that figure is four in ten, representing 389 million people, which is more poor people than all other regions combined (World Bank Group 2016). The international measure of poverty is not applicable to advanced countries, like the United States, due to their relative prosperity. In fact, the measurement of inequality and poverty in America is complex and multidimensional that, at times, can cause the official figures not to be an accurate reflection of the economic well-being of households and individuals. Given that there are diverse ways of calculating income, there must be disparities in the measurements of the income mean, median, and Gini coefficient. In the United States, poverty is income that is measured below a certain minimum level, and in there, the US Census Bureau and the Department of Commerce prepare annual measures of poverty. According to Frumkin (2000), "Poverty has an evolving dimension over time and involves raising the standards periodically to reflect improvement in living conditions and higher aspirations afforded by the advancements in technology" (p. 86). This situation normally raises the number of persons living inAlbert Duncan is statistically defined, it is called the poverty line. There is also an established point that marks the minimum food consumption that can sustain life, which is called the extreme poverty line. That point will differ from one country to the next due to a change in the circumstances of the population, but the process remains the same. With that information, we can understand how many people live below the poverty line. In addition, the World Bank uses the International Comparison Program in order to create a benchmark to measure extreme poverty, which was at US $1.90 a day in the 2011 purchasing power parity (PPP). This would mean that at US $1.90, a person would be able to purchase a sufficient quantity and quality of food to meet his or her daily caloric need. Most of the world's extremely impoverished people live in Sub-Saharan Africa and Southern Asia. While over one in ten people live in extreme poverty globally, in Sub-Saharan Africa, that figure is four in ten, representing 389 million people, which is more poor people than all other regions combined (World Bank Group 2016). The international measure of poverty is not applicable to advanced countries, like the United States, due to their relative prosperity. In fact, the measurement of inequality and poverty in America is complex and multidimensional that, at times, can cause the official figures not to be an accurate reflection of the economic well-being of households and individuals. Given that there are diverse ways of calculating income, there must be disparities in the measurements of the income mean, median, and Gini coefficient. In the United States, poverty is income that is measured below a certain minimum level, and in there, the US Census Bureau and the Department of Commerce prepare annual measures of poverty. According to Frumkin (2000), "Poverty has an evolving dimension over time and involves raising the standards periodically to reflect improvement in living conditions and higher aspirations afforded by the advancements in technology" (p. 86). This situation normally raises the number of persons living in
