Income Equality

INCOME EQUALITY MONDAY, APRIL 18, 2011 Some causes of income inequality are changes in the labor's share of income, inequality at the bottom of the income distribution, especially labor mobility, skill-biased technical change, inequality among high income groups, consumption inequality, geographical inequality, international differences in income distribution, and gender differences, especially since 1979 through 2005. There are some compensating differentials like poverty line, race, age and family size that could also be the cause of income equality. Labor's share of income could be the result of globalization and trade with other countries. As a country learns to specialize in the production of goods and services, it has a comparative advantage where productivity growth increases and living standards arise. Global competition keeps inflation in check, and frees up capital flow to keep interest rates low. Feminization is another result in why labor's share of income causes income equality. Over the last 2 or 3 decades, women have become increasingly active in the workforce. This can show three processes in the labor market: (1) A rise in the female labor force participation, (2) replacement with male workers with (cheaper) female workers, (3) employment opportunities with "female" traits. Other causes of income equality might be natural resources and natural vegetation that are available in each country, different countries might enjoy certain natural advantages, the history of economic development of countries like industrialization and development of technology, the current political and legal situation of the country, the current culture of the people of the country such as entrepreneurship, businessmen and member organizations. Trade with other countries as Sir James Goldsmith said, "free trade with low-wage countries can harm and threaten low-skilled workers in advanced industrial countries." From Ross Perot's view, "freer trade with Mexico can eliminate industrial jobs and reduce wages of semi-skilled U. S. workers." Skilled and unskilled workers and workers with the same characteristics of gender, race, education and experience can also cause income equality. Resources www.emeraldinsight.com/journals.htm?articleid=847825&show... www.brookings.edu/articles/.../spring_poverty_burtless.aspx www.enotes.com › Business Group wiki.answers.com › ... › Business & Finance › Personal Finance www.nber.org/digest/dec08/w13982.html www.imf.org/external/pubs/ft/wp/2006/wp06294.pdf www.econ.utah.edu/genmac/WP/06-4.pdf