income inequality | History & Origin

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This is often presented by giving a percentage of a population and stating what portion of the overall income is earned by that percentage.</p> <p>For example, according to US Census data from 2019, the wealthiest 20% of Americans accounted for about 52% of all income earned in the US (with the wealthiest 5% earning 23% of all income at the time). This means that in 2019, 80% of all Americans earned only about 48% of all income in the US.</p> <p>There are a few terms that sound similar to <em>income inequality</em> but that are used in distinct ways.</p> <p>The term <em>wealth inequality</em> is often broader and uses <em>wealth</em> to refer to the entirety of a person鈥檚 <a href="https://www.dictionary.com/browse/monetary" target="_blank" rel="noopener">monetary</a> assets (all the money they have), not just their income (which can be thought of as the money that a person adds to their existing wealth).</p> <p>The terms <em>wage gap</em> and <em>pay gap</em> typically refer to the differences in the average pay of individuals who do the same job. For example, in the US, many studies show a <em>wage gap</em> between men and women, with women earning less for the same roles (and women of color often earning even less).</p> <p>Wage gaps can be thought of as one factor that contributes to<em> income inequality</em> (which in turn contributes to <em>wealth inequality</em>), but <em>income inequality</em> is thought to be driven by many causes (which are discussed below).</p> <p>The term <em>income inequality</em> is often used to imply that different people鈥檚 levels of income are not just unequal but unfair due to being the result of <a href="https://www.dictionary.com/browse/systemic" target="_blank" rel="noopener">systemic</a> factors. For this reason, it鈥檚 a term usually used by people who believe that<em> income inequality </em>is a problem (and a widespread and increasing one).</p> <p><strong>Example:</strong> <em>Reports repeatedly show that income inequality has continued to increase, with the top earners earning more and more and the lowest earners continuing to earn the same. In other words, the rich are getting richer while the poor stay poor.</em></p> </div> </div> <div class="atw-socials"> <ul> <li> <a href="https://facebook.com/sharer/sharer.php?u=https%3A%2F%2Fwww.dictionary.com%2Fe%2Fhistorical-current-events%2Fincome-inequality%2F" target="_blank" data-linkid="begyaa"> <i class="fa fa-facebook" aria-hidden="true"></i> </a> </li> <li> <a href="https://twitter.com/intent/tweet/?text=income+inequality&url=https%3A%2F%2Fwww.dictionary.com%2Fe%2Fhistorical-current-events%2Fincome-inequality%2F" target="_blank" data-linkid="agbu2i"> <i class="fa fa-twitter" aria-hidden="true"></i> </a> </li> </ul> </div> </div> <div class="article-word__row article-word__row--transparent article-word__row--flex"> <div class="ad ad-atw-hot-mobile atw-mobile-ad" id="ad-wrapper-atw-hot-mobile"> </div> <script> var adWrappers = document.getElementsByClassName('ad-atw-hot-mobile'); var getAdWrapper = () => { if (adWrappers.length === 1) { return adWrappers[0]; } else { for (adWrapper of adWrappers) { var childNodes = adWrapper.children; if (childNodes.length === 0) { var grandParentNode = adWrapper.parentNode.parentNode; var isVisibleNode = !(grandParentNode.style.display === 'none') if (isVisibleNode) { return adWrapper; } } } } } var adWrapper = getAdWrapper() if (adWrapper) { var adUnit = document.createElement('div'); if (isSovrn) { adUnit.classList.add('dictionary_right_rail_300x250_flex_2'); adUnit.setAttribute('data-text', 'Sovrn Advertisement'); adWrapper.appendChild(adUnit); var hasWindow = typeof window !== 'undefined'; var hasProperBuildSlots = hasWindow && typeof window.properBuildSlots !== 'undefined'; if (hasProperBuildSlots) { window.properBuildSlots(); }; } else { adUnit.id = 'crb-ad-slot-atw-hot-mobile' adUnit.setAttribute('data-text', 'GPT Advertisement'); var adContainer = document.createElement('div'); adContainer.classList.add("ad__container"); if ("") { adContainer.classList.add(""); } adContainer.id = "crb-ad-container-atw-hot-mobile"; adContainer.setAttribute('data-text', 'GPT Advertisement'); var adContainerInner = document.createElement('div'); adContainerInner.classList.add('ad__container-inner'); adContainerInner.id = "crb-ad-container-inner-atw-hot-mobile"; adContainerInner.setAttribute('data-text', 'GPT Advertisement'); adWrapper.appendChild(adUnit); adContainerInner.appendChild(adUnit); adContainer.appendChild(adContainerInner); adWrapper.appendChild(adContainer); } } </script> <div class="article-word__related-words"> <h2 class="article-word__row-title">Related words</h2> <a data-linkid="uqagl6" href="https://www.dictionary.com/e/historical-current-events/tax-day/">Tax Day</a>, <a data-linkid="uqagl6" href="https://www.dictionary.com/e/gender-sexuality/pink-tax/">pink tax</a>, <a data-linkid="uqagl6" href="https://www.dictionary.com/e/acronyms/wic/">WIC</a>, <a data-linkid="uqagl6" href="https://www.dictionary.com/e/historical-current-events/cultural-competence/">cultural competence</a></div> </div> <div class="article-word__row" id="origin"> <div class="article-word__origin"> <h2 class="article-word__row-title"> Where does income inequality come from? </h2> <div class="article-word__origin-content"> <div class="examples__item left"> <div class="examples__item__wrapper"> <div class="examples__item__content" style="height: auto;"> <span><img width="300" height="300" src="https://www.dictionary.com/e/wp-content/uploads/2021/06/20210614_atw_incomeInequality_800x800-300x300.png" class="attachment-medium size-medium" alt="" loading="lazy" srcset="https://www.dictionary.com/e/wp-content/uploads/2021/06/20210614_atw_incomeInequality_800x800-300x300.png 300w, https://www.dictionary.com/e/wp-content/uploads/2021/06/20210614_atw_incomeInequality_800x800-150x150.png 150w, https://www.dictionary.com/e/wp-content/uploads/2021/06/20210614_atw_incomeInequality_800x800-768x768.png 768w, https://www.dictionary.com/e/wp-content/uploads/2021/06/20210614_atw_incomeInequality_800x800-83x83.png 83w, https://www.dictionary.com/e/wp-content/uploads/2021/06/20210614_atw_incomeInequality_800x800-160x160.png 160w, https://www.dictionary.com/e/wp-content/uploads/2021/06/20210614_atw_incomeInequality_800x800-380x380.png 380w, https://www.dictionary.com/e/wp-content/uploads/2021/06/20210614_atw_incomeInequality_800x800-500x500.png 500w, https://www.dictionary.com/e/wp-content/uploads/2021/06/20210614_atw_incomeInequality_800x800-700x700.png 700w, https://www.dictionary.com/e/wp-content/uploads/2021/06/20210614_atw_incomeInequality_800x800.png 800w" sizes="(max-width: 300px) 100vw, 300px" /></span> </div> <div class="examples__item__description"> </div> </div> </div> <p>The term <em>income inequality</em> has been used since at least the 1960s. In recent years, use of the term has become more widespread as <em>income inequality </em>has become a more mainstream political issue.</p> <p>Many organizations have reported statistics showing that<em> income inequality </em>has increased globally as well as within certain countries and populations. In the US, statistics show that <em>income inequality</em> has significantly worsened over the past several decades, with a gap larger than most other countries.</p> <p>Along with the gap between the highest and lowest earners (cited above), 2019 statistics compiled by the US Census Bureau also show large gaps in average yearly income among several different groups and categories, including:</p> <ul> <li aria-level="1">Unmarried men ($48,496) and Unmarried women ($34,612);</li> <li aria-level="1">City/Metropolitan households ($71,961) and Other households ($52,100); and</li> <li aria-level="1">Asian households ($98,174), White households ($72,204), Hispanic households ($56,113), and Black households ($45,438).</li> </ul> <p>Some economists and other observers state that<em> income inequality</em> is (at least partially) a natural result of the economic conditions created by <a href="https://www.dictionary.com/browse/free-trade" target="_blank" rel="noopener">free trade</a>. However, many others argue that the greater level of<em> income inequality</em> seen in the US and other countries is due to systemic factors that unfairly widen the gaps in the incomes of different groups. Some activists and politicians have proposed or called for policies aimed at lessening <em>income inequality</em> by addressing such factors, including racism, misogyny, political corruption, unequal political power based on wealth or social class, and unequal tax burdens on the rich and the poor.</p> </div> </div> </div> <div class="ad ad-atw-origin-mobile atw-mobile-ad" id="ad-wrapper-atw-origin-mobile"> </div> <script> var adWrappers = document.getElementsByClassName('ad-atw-origin-mobile'); var getAdWrapper = () => { if (adWrappers.length === 1) { return adWrappers[0]; } else { for (adWrapper of adWrappers) { var childNodes = adWrapper.children; if (childNodes.length === 0) { var grandParentNode = adWrapper.parentNode.parentNode; var isVisibleNode = !(grandParentNode.style.display === 'none') if (isVisibleNode) { return adWrapper; } } } } } var adWrapper = getAdWrapper() if (adWrapper) { var adUnit = document.createElement('div'); if (isSovrn) { adUnit.classList.add('dictionary_right_rail_300x250_flex_2'); adUnit.setAttribute('data-text', 'Sovrn Advertisement'); adWrapper.appendChild(adUnit); var hasWindow = typeof window !== 'undefined'; var hasProperBuildSlots = hasWindow && typeof window.properBuildSlots !== 'undefined'; if (hasProperBuildSlots) { window.properBuildSlots(); }; } else { adUnit.id = 'crb-ad-slot-atw-origin-mobile' adUnit.setAttribute('data-text', 'GPT Advertisement'); var adContainer = document.createElement('div'); adContainer.classList.add("ad__container"); if ("") { adContainer.classList.add(""); } adContainer.id = "crb-ad-container-atw-origin-mobile"; adContainer.setAttribute('data-text', 'GPT Advertisement'); var adContainerInner = document.createElement('div'); adContainerInner.classList.add('ad__container-inner'); adContainerInner.id = "crb-ad-container-inner-atw-origin-mobile"; adContainerInner.setAttribute('data-text', 'GPT Advertisement'); adWrapper.appendChild(adUnit); adContainerInner.appendChild(adUnit); adContainer.appendChild(adContainerInner); adWrapper.appendChild(adContainer); } } </script> <div class="article-word__row" id="examples"> <div class="article-word__examples"> <h2 class="article-word__row-title"> Examples of income inequality </h2> <div class="article-word__examples-list"> <div class="examples__item"> <div class="examples__item__wrapper"> <div class="examples__item__content text" style="border: 2px solid #92d6ff;"> <span>Learning gaps are not a student or teacher capacity problem. They are a public funding problem. We can not address learning opportunity until we address income inequality and its intersection with race, gender, and disability. Learning benchmarks obscure learning conditions.</span> </div> <div class="examples__item__description"> @BBFarhadi, April 25, 2021 </div> </div> </div> <div class="examples__item"> <div class="examples__item__wrapper"> <div class="examples__item__content text" style="border: 2px solid #92d6ff;"> <span>More than 420 million wild animals have been traded in 226 nations over two decades, according to new figures. Researchers say income inequality is driving the trade and suggest high-income countries should pay poorer ones to conserve wildlife.</span> </div> <div class="examples__item__description"> Helen Briggs, <em>BBC</em>, May 5, 2021 </div> </div> </div> </div> </div> </div> <div class="article-word__row" id="usage"> <div class="article-word__usage"> <h2 class="article-word__row-title"> Who uses income inequality? </h2> <div class="usage__content clear"> <p>The term <em>income inequality</em> is often used by those who believe it is a widespread problem that results from systemic factors. It has become a frequent topic in US politics that鈥檚 often discussed alongside similar issues, including wealth inequality and wage gaps.</p> <blockquote class="twitter-tweet" data-width="500" data-dnt="true"> <p lang="en" dir="ltr">Economic slumps are inevitable, writes Scott Martelle, but the pandemic demonstrated the dire impact of growing income inequality. </p> <p>Here鈥檚 why he believes our economy must provide for the vulnerable as it recovers.<a href="https://t.co/8HjPg1cnnD">https://t.co/8HjPg1cnnD</a></p> <p>— Los Angeles Times (@latimes) <a href="https://twitter.com/latimes/status/1401637575471808515?ref_src=twsrc%5Etfw">June 6, 2021</a></p></blockquote> <p><script async src="https://www.dictionary.com/e/wp-content/themes/dictionary-com/js/build/bundle-theme-twitter-embeds.js"></script></p> <blockquote class="twitter-tweet" data-width="500" data-dnt="true"> <p lang="en" dir="ltr">Keeping workers employed during the worst phase of a crisis can reduce income inequality. Ramping up job reallocation efforts during the recovery can further bend the inequality curve over the medium term. Read more in our latest <a href="https://twitter.com/hashtag/IMFBlog?src=hash&ref_src=twsrc%5Etfw">#IMFBlog</a>: <a href="https://t.co/kuG5WWJstq">https://t.co/kuG5WWJstq</a> <a href="https://t.co/Jql70NRC96">pic.twitter.com/Jql70NRC96</a></p> <p>— IMF (@IMFNews) <a href="https://twitter.com/IMFNews/status/1401183289839435777?ref_src=twsrc%5Etfw">June 5, 2021</a></p></blockquote> <p><script async src="https://www.dictionary.com/e/wp-content/themes/dictionary-com/js/build/bundle-theme-twitter-embeds.js"></script></p> <blockquote class="twitter-tweet" data-width="500" data-dnt="true"> <p lang="en" dir="ltr">The investigation my colleagues kicked off today makes concrete something that economists have understood and debated for years: Wealth inequality has actually increased much more than income inequality, and the tax system isn't doing much about it. 1/ <a href="https://t.co/Y6F1r7o41o">https://t.co/Y6F1r7o41o</a></p> <p>— Lydia DePillis (@lydiadepillis) <a href="https://twitter.com/lydiadepillis/status/1402283138039095300?ref_src=twsrc%5Etfw">June 8, 2021</a></p></blockquote> <p><script async src="https://www.dictionary.com/e/wp-content/themes/dictionary-com/js/build/bundle-theme-twitter-embeds.js"></script></p> </div> </div> </div> <div class="ad ad-atw-usage-mobile atw-mobile-ad" id="ad-wrapper-atw-usage-mobile"> </div> <script> var adWrappers = document.getElementsByClassName('ad-atw-usage-mobile'); 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