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Income distribution in the U.S. is tied to many economic and non-economic factors which...

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lilylee | Student, College Freshman | Salutatorian

Posted June 11, 2013 at 12:16 AM via web

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Income distribution in the U.S. is tied to many economic and non-economic factors which change as the economy moves through normal cycles. There is not one dynamic at work but several.

What economic and noneconomic factors affect income distribution in the U.S.?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted June 11, 2013 at 12:34 AM (Answer #1)

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There are many factors that affect the way that income and wealth are distributed in the United States.  Let us look at a few of the most important factors.

First, we can say that supply and demand affect income and wealth.  This is an economic factor.  There are some skills that are in greater demand here in the United States while others have become much less useful.  This is one reason why the rich have gotten richer.  There is a great deal of demand for high-skilled workers and very little demand anymore for workers who are able to do things like running machines in factories.

Relatedly, the economic factor of globalization has helped to cause this.  Some jobs have become more lucrative now that they can produce goods and services for the whole world.  This makes people who can do things like banking much richer, but it makes other people poorer.  People whose jobs have been lost to overseas competition have had their incomes reduced.

Outside of economics, the major factor that causes inequality is access to education.  People who do not have college degrees are among the biggest losers in today’s economy.  Our educational system provides much better education to those who are already relatively wealthy and who have educated parents than it provides to people from lower parts of the socioeconomic strata.  This perpetuates a system in which the rich get richer relative to those who are not rich.

These factors, and many others, affect the income distribution in the US today.

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