Social Inequality

Question 1

How does measuring income differences also measure inequality?

Answer 1

• Measure peoples income and or wealth via a survey to determine how much variance there is.
• Societies are more equal when income and wealth are more similar, while the opposite indicates an unequal society

Question 2

What are two simple ways of accessing inequality?

Answer 2

1) Comparing individuals to the average income (But this would only provide the range above or below the average)
2) Divide up the population into groups: sort individuals from high to low income.

Question 3

How do you compare the share of income in a society and determine if it is equal or unequal?

Answer 3

Compare what each group should get, it society is equal than each share would be equal.

Question 4

How has household income changed over time?

Answer 4

The top 20% takes 40% of the income
The rich are getting richer but the bottom 20% arent getting poorer
There is no trend, therefore the richer are getting richer and the poor aren’t going anywhere.

Question 5

How has income distribution changed over time?

Answer 5

The bottom quintile has remained unchanged

• This means the poor didn’t get richer or poorer
• The rich on the other hand didn’t get richer
• The middle quintile lost income
• Therefore, the rich receive the biggest share of growth in income

Question 6

Why do the rich get richer but the poor stay the same?

Answer 6

• The rich are making money in investments
• If a rich person gets 10% raise and so does a poorer person. - - - The rich person gets way more money because they make more money.
• The rich revive larger pay increases

Question 7

Why is family income not just made out of income?

Answer 7

• Some families receive money from the government in the form of social assistance
• Some income get taken away in taxes

Question 8

What are taxes and transfers?

Answer 8

Taxes: The money the government takes
Transfers: Money being moved from the rich to the poor because of taxes

Question 9

What does income look like after taxes and transfers

Answer 9

• If the government didn’t take taxes, the 20% of the highest bracket would get 52% of all the money in the country
• After taxes they still end up with 44% of the countries money

Question 10

How do taxes effect health care?

Answer 10

Giving healthcare to everyone in the world is impossible

• Healthcare in the USA is expensive but if you have insurance you get the best care in the world
• In Canada, our taxes are put in healthcare but it is not always the best.

Question 11

How does Canada compare to other countries in taxes?

Answer 11

• Canada is more unequal than European countries

- USA is more unequal than us

Question 12

What does it mean to be an unequal society in terms of money?

Answer 12

Means more of the money earned goes to the rich people.

Question 13

Who are the poor in Canada?

Answer 13

Single parents with a young child 
- Women 
- Because of divorce 
- Spend their time taking care of kid so they cant find work 
- Low levels of education 
Seniors in America

Question 14

Why do we take money from the rich and give it to the poor?

Answer 14

• It reduces the gap between the rich and the poor

- When you give the poor money, they can sometimes raise above the poverty line

Question 15

How do political views effect the gap between the rich and the poor?

Answer 15

Some believe that we should help one another (give the rich’s money to the poor) and some believe that we shouldn’t (your money is your money)

Question 16

Who are the rich in Canada?

Answer 16

• Canadas top 1% (people who are making 190 thousand a year)
• 50% that have a uni degree (medicine, law, dentistry, engineering)
• 3% had no education
• 80% are men
• 90% are white

Question 17

What is the ‘Gini Coefficent’

Answer 17

A sophisticated way of measuring inequality

- A summery measure of inequality, usually applied to household incomes

Question 18

What is the Gini Number? And how is it calculated?

Answer 18

How economists measure how unequal society is

• Gini = A / (A+B)
• A number between 0 -1
• 0 is a society that is completely unequal
• 1 is a society that is completely equal
• Calculated from the Lorenz Curve

Question 19

How is the Gini effected by time?

Answer 19

When high paying jobs made of educated people go away, they are replaced by minimum wage jobs.

Question 20

How is the Gini effected by taxes and transfers?

Answer 20

By taking money from the rich and giving it to the poor, we make the inequality gap smaller.

Question 21

How is inequality driven by wage differences?

Answer 21

Wages effect it because if someone can make a company lots of money, they will get paid lots of money.

Question 22

How is inequality driven by social transfers?

Answer 22

Social transfers effect because the higher the transfer the smaller the gap?

Question 23

What are some causes of inequality?

Answer 23

• Loss of high paid low end jobs (manufacturing) due to cheap imports
• Expansion of the lower paid service sector (retail, fast food, etc)
• Poor people don’t have unions to fight for them
• Deregulation (Governments allowing organizations to do what they want)
• Slashing tax rates

Question 24

How are the poor effected by wealth inequality

Answer 24

• Composition of wealth (financial assets, real estate)

Question 25

What does the Gini show in wealth inequality?

Answer 25

• The gini signifies that wealth is very unequally distributed

Question 26

Who are the super rich?

Answer 26

• It is hard to get info about the super rich because they wouldn’t be captured in a random sample and their is very few really rich people.
• 1% of the population but a minority of those 1% are SUPER rich.

Question 27

What did the Forbes Survey reveal about the SUPER rich?

Answer 27

• The survey captured billionairs and showed that in Canada, there might be around 160 families with more than 20 million dollars and about 40 billonaires.

Question 28

What are some causes of wealth inequality? (5 points)

Answer 28

• Comes from unequal earnings, unequal possession of assets
• It is passed on from one generation to another
• Rich parents invest in their children human capital, ensuring future inequality.
• The rich marry the rich
• The rich have few children, which ensures wealth is not diluted

Question 29

How do we define poverty?

Answer 29

• It is difficult and no one agrees on the same definition.
• Same is true for the definition of rich
• Absolute poverty

Question 30

What is absolute poverty?

Answer 30

• Refers to the money needed to buy necessities to survive
• In a community to find out what you need to survive (food, rent, etc) Calculate the cost and if you make less than that amount, you’re poor if you are not, then youre not.

Question 31

What is Relative poverty?

Answer 31

• Poverty is the relationship to the community standard of how you should be living
• Is another measurement of poverty based on relative differences

Question 32

What is a relative measure of poverty?

Answer 32

• A relative measure of poverty could be defined as anyone who has an income below 50% of the median income.
• This type of measured tends to be used in developed countries.

Question 33

How does stats canada define poverty?

Answer 33

• Uses a definition that incorporates both absolute and relative poverty
• This is called the Low income Cut Off line
• Reflects the relative income required for a family to obtain basic essentials
• Accounts for family size and city size .