Assignment 3 - Economic Inequality

Wealth vs. Income

Income and wealth are terms which are often used interchangeably but they’re not the same. While the two concepts often go hand in hand, using the terms interchangeably is misleading. America’s most wealthy individuals don’t necessarily draw the highest levels of income. Wealth is the net worth of an individual, that is, the value of all your assets minus all your liabilities. It includes all your assets such as money, real estate, and personal property. While wealth represents what you own, income is what you earn, and it consists of the inflow of cash. Income is usually expressed in monetary terms such as the total amount you receive as a salary, wage, profit, interests, rents, and other earnings for a certain period. It is what you earn and spend for consumption and also what you save. Having a huge income does not ensure that you will become wealthy. High income earners usually have high standards of living which make them spend more while there are many who earn less income but may save more and acquire wealth. It all depends on how a person manages their income.

The Assignment

Please read the following article and watch the two videos provided and answer the following questions:

"Wealth Inequality in the United States", wealthinequality.org  (please read this page for this assignment, though you are welcome to read the rest of the article if you wish) Links to an external site.

Wealth Inequality in America Links to an external site.

A Look at Income Inequality in the United States Links to an external site.

1. In American history, when was the share of wealth held by the wealthiest Americans at its peak?

2. Where does the wealth of  the vast majority of Americans come from? How does this differ from the top 1%?

3. How does the wealth of the median White family differ from the wealth of the median Black and Latino family?

4. The 1% of richest Americans possess what percentage of American wealth? How does that compare to the wealth in the hands of the bottom 80%?

5. Approximately when did the income of the top 1% surpass the income of the bottom 50% (give me a decade)? List three factors that may have contributed to that change.

6. Based on the article and videos above,  in what ways does gender impact income inequality? 

7. Are there regional differences in income inequality? If so, why?

8. How much more does the average CEO earn than his or her average employee?

9. Are most of the "rich" self-made or did they inherit their wealth?

10. Is this an insurmountable problem? Will it only get worse and worse? Or are there possible solutions to this issue? I'm looking for your opinion. There isn't a right or wrong answer as long is you give it some thought. Keep your answer reasonably short. A paragraph should be sufficient.