A farmer with a $5 million net worth might have an income of $20,000 a year, while an investment banker with $1 million might have an income of $300,000 a year.
The farmer with $5 million of assets is wealthier than the investment banker.
The Monetary Fund was 60,000.
The United States has more wealth than income.
Cumulative percentage of families/households 400 Microeconomics distributed than income and that the bottom 40 percent of the U.S. population has close to zero wealth.
The Lorenz curves don't give you a sense of how much wealth it takes to become a billionaires.
You can get a better sense from the following numbers.
Bill Gates, who founded Microsoft and became the richest person in the United States, had a net worth of $90 billion.
Six of the wealthiest people in the United States were people who founded platform businesses.
Most of us don't have a chance of becoming one of the top 5 percent of wealthholders in the United States, which requires a total wealth of at least $2.4 million.
People used to want to be a millionaire.
The ultimate goal of the millionaire's club is not to be a billionaire in the 2000s.
The millionaire's club is exclusive.
The club is constantly changing and people don't always stay there.
A number of families who were in the club earlier are no longer in it.
The world stock market collapsed in 2008 and many billionaires lost a lot of money.
Some of the people and families might only be multimillionaires.
The share distribution of inequality is just one of many dimensions of income and wealth that can be taken.
The distribution of income was once considered important.
Today's focus is on the distribution of income based on race, ethnic background and other factors.
Table 18-2 shows an idea of the distribution of income.
Some econo mists argue that a new professional/non professional class distinction is occurring in the United States because of income differences by type of job.
White people and black people have vastly different incomes.
The distribution of income by wages, profits, and rent was the focus of early economists.
Rent, profit, and wages were received by landowners, capitalists, and workers.
An important part of economists' analyses of the economy and policy was the tension among these classes.
Even though class divisions by income source have become blurred, other types of classes have taken their place.
There is a kind of upper classes in the United States.
This isn't saying that such classes should exist, but that they are.
It is possible to divide the U.S. population into two classes.
Income source no longer determines class divisions.
Upper-class people don't necessarily get their income from rent and profits.
Most of the income of the CEOs of major companies is paid for their services.
We have upper-class people who derive their income from wages and lower-class people who derive their meager income from profits, usually in the form of pensions, which depend on profits from the investment of pension funds in stocks and bonds.
People who become rich earn interest and profits on their wealth as well as income from wages.
The growth in the size of the middle class has made the most difference in the class structure in the United States compared to other countries.
The class structure used to be seen as a pyramid by economists.
From a base composed of a large lower class, the pyramid moved upward through a medium-size middle class to a peak occupied by the upper class.
The middle class is the most developed in the United States.
The portrayal of dia mond geometrics has become less appropriate in the last 30 years.
Some in the middle class have done well and moved into the upper middle class, while others have done poorly and expanded the number at the bottom.
Globalization pushed your wage down or left you out of work if your job was in a tradable sector such as manufacturing.
The class structure in the United States is more like a pentagon than a pyramid.
Those in nontradable sectors such as government workers or semi skilled service workers, whose jobs could not be easily replaced with immigrant workers, remained in the middle class.
The lower class is being expanded to include many formerly in the middle class.
Those in the lower class are less likely to move up the ladder into the middle class and those in the upper class are less likely to move down the ladder into the middle class.
The middle class is still large, but a group of people who are just get ing along are always on the edge of poverty.
The bottom group includes a disproportionate percentage of blacks and has been expanded by a significant number of immigrants.
The bottom group has been expanded by the loss of middle class jobs.
The difference is significant.
The median wealth of white households is 20 times that of black and Hispanic.
The typical Hispanic and black household has $6,000 in wealth, compared to $100,000 for the white family.
The lower class and their children can't enter the middle class because of the decline of social mobility.
The increase in the size of the middle class in developed countries has blurred the divide between capitalists and workers.
The distributional fight was mostly between workers and capital in early capitalist society.
Union workers are pitted against nonunion workers, while government workers are pitted against manufacturing workers.
The old are against the young, women are against men, and blacks are against Hispanics and Asians.
Class warfare is sometimes called class warfare.
Hispanics and blacks have faced more job losses in the past few years than whites.
Blacks and Hispanics were more optimistic about their futures than whites.
People's acceptance of the U.S. economic system is based on what people think is fair and what they don't think is fair.
We now turn to that question.
Judgements about the distribution of income are based on the values the analyst applies to the situation.
Income distribution can be justified depending on one's values.
Friedrich Nietzsche, the 19th-century German philosopher, argued that society's goal should be to support its best and brightest.
Lesser individuals should work for the well-being of these supermen.
According to a 20th century philosopher, a high level of income inequality is necessary to sustain the arts, beauty, education, and civilization.
He and others say that a world of equal income would be a world without beauty.
Even if we don't own beautiful, expensive homes, or aren't devoted opera fans, these philosophers argue that our lives are improved because some people do own such homes.
The lives of everyone are enriched by the creation of diversity.
Philosophers disagree strongly.
They argue that the goal of equality is ridiculous.
For many people, the Q-5 is self-evident, that greater inherent value of equality is not open to question.
John Rawls, a Harvard University professor who believed that equality is desirable and that society's goal should be to maximize the welfare of the least well-off, agreed that to meet that goal some inequal ity is necessary.
If you make the least well-off worse off than they otherwise would have been, then you should not pursue equality any further.
Everyone would get $10,000 per year under one policy.
The least well-off person gets $12,000 per year, while everyone else gets $40,000.
The second policy is better than the first because it involves more inequality, according to Rawls.
Economists don't care about justifying the distribution of income.
Explanation of the effects that policies will have on the distribution of income is limited by economists in their objective role.
Because all real-world economic policies have distribution effects, you have to make certain judgements about income distribution in order to judge economic policies.
There is a brief discussion of income distribution and fairness.
Equality is seen as fair by the U.S. population.
Most people, including me, share that view.
Equality of income is not related to people's view of fairness.
If you divide the income between John and Fred, you will get $50,000 a year.
Fred gets a lot of money.
Think for a second.
The idea of policies that achieve higher in order to increase income has been argued against by theoreticians.
The goal of policy analy has not always been to make it unavoidable.
He believes that using income as a measure of welfare nomic policy is not the best approach and suggests replacing it with luxuries.
Only policies that increased basic with a measure.
The goal of eco goods was good for Sen, but the welfare implications of policies that increase luxuries were more problematic.
The 1930s marked a major change in how society achieved certain things.
Capabili policy was conceived for Sen. Economics began focusing much ties are best measured by basic indicators such as life more on the utility of all goods, downplaying the benefits of luxuries and infant mortality rates.
The goal of economic policy is to lead good and happy lives.
Regardless of how the income was divided, Sen's work is contro income.
The goal of division of goods into necessities and luxuries should always be kept in mind, and we should not simply accept the goal as being in the purview of positive policy.
I'm hoping that you don't have enough information to make a decision.
There is more information about fairness.
John gets $50,000 for holding down often difficult to say what is fair and three jobs, while Fred gets $12,000 for sitting around doing nothing.
At this point, what isn't?
Most of us would change our minds again.
People don't argue that Fred deserves more just because John works more.
If we discover that Fred is an invalid 2, how about that?
People's needs are different.
People's efforts are different.
You should have grasped my point by now.
A person's income is only one of many dimensions that people consider important in making value judgments about fairness.
When people talk about equality of income, they often mean they believe in equality of opportunity for people with good genes.
The inequality of income is fair if equal opportunity of equals leads to it.
There's a lot of latitude for debate on what constitutes equal opportunity of equals.
Needs, desires, and abilities are not the same in the real world.
You have to answer that question before you can judge an economic policy because you have to decide whether the policy's effect on income is fair.
If society is to meet its ideal of fairness, some redistribution of income from the rich to the poor is necessary.
We need to consider what programs exist and what their negative side effects are.
The side effects can subvert the intention of the pro gram so that less money is available for redistribution and less money is available for inequality.
A tax may cause people to work less.
There is a decrease in measured incentive effect when people try to avoid taxes.