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A curve that shows how much the actual distribution of income varies from an equal distribution

Lorenz curve


What are reasons for income inequality?

Education, wealth, discrimination, ability, monopoly power


Why does education affect income inequality?

Because people have more education, education puts people in a better position to get a higher paying job that require a higher level of skills


Why does wealth effect income inequality?

Some people hold more wealth than others, and the distribution of wealth is even more unequal than the distribution of income


How does discrimination affect income inequality?

Women may not be promoted to executive positions and some companies because male executive simply are not accustomed women and roles of power, some unions may deny immigrants or ethnic minorities membership on grounds that they don't belong, discrimination causes women and minority groups to be crowded into other labor markets where oversupply drives down wages


How does ability affect income inequality?

Some people have certain natural abilities such as professional athletes, the same is true for popular performers


How does monopoly power affect income inequality?

Some groups hold monopoly power allowing them to obtain higher wages for their members.


What does poverty measure?

It depends on prices, the standard of living, and the incomes that others earn.


Annual dollar amounts used to evaluate the money income that families an unrelated individuals receive

Poverty guidelines


What is one reason for the continued high poverty numbers?

The growing gap in the distribution of income


How does the growing gap in the distribution of income effect poverty?

1. It involves a structural change in the economy as industry changes from goods production to service production. 2. The growing gap between well-educated and poorly educated workers. 3. Declining unionism. 4. The changing structure of the American family


Economic and social programs that provide regular assistance from the government or private agencies because of need



Programs that provide direct cash assistance to those in need phone to the category of income assistance

Temporary assistance for needy families, supplemental security income ( blind or disabled)


Program that assist poor people but do not provide direct cash assistance phone to the category of general assistance

Food stamps, Government issued coupons that can be redeemed for food


What is a another general assistance program?

Medicaid, A joint federal state medical insurance program for low income people.


What are some social service programs?

Child abuse prevention, foster care, family planning, job training, child welfare, and daycare


Provides federal text credits and sometimes cash to low income workers

Earned income text credit


Areas where companies can locate free of some local, state, and federal tax laws and other operating restrictions

Enterprise sounds


What do enterprise zones do?

They benefit the area residents because they can find work without worrying about transportation, thereby helping depressed areas to grow again.


A program that requires welfare recipients to exchange some of their labor for benefits



What are some examples of workfare?

Assisting my enforcement officials or sanitation and highway crews, or perform other types of community service work


A proposed type of tax that would make cash payments to certain groups below the poverty line

Negative income tax


How is negative income tax different from other antipoverty programs?

It is a market-based program designed to encourage people to work. And the negative income tax would be cost-effective because it would take the place of other costly welfare programs.