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INCOME INEQUALITY AND POVERTY 8

Poverty and Income Inequality

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Running head: INCOME INEQUALITY AND POVERTY 1

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Introduction

Income inequality refers to the disparity in income distributions between members of different social classes in an economy with a small social class having a high concentration of income as compared to the others. Income inequality goes hand in hand with poverty. A country that has an unequal income distribution will definitely have divergences in its regional and economic status which results into a massive gap between the rich and the poor, with the rich getting richer and the poor getting poorer. The inequality is majorly caused by political instability, socioeconomic oppression of the poor by the rich, poor education policies and the general redundancy of the oppressed to lack critical consciousness that can change the inequality. Income inequality creates dependency on rich by the poor and limits the nation’s capabilities of development. It is, therefore, essential for the government as well as economy researchers to intensely conduct research experiments that could terminate income inequality. It is explicit that the main cause of persistent poverty now is high inequality of market income and the government as well as the citizens should persistently try to terminate it.

Annotation 1

Shehzadi, I., Siddique, H. M. A., & Majeed, M. T. IMPACT OF POLITICAL INSTABILITY ON ECONOMIC GROWTH, POVERTY AND INCOME INEQUALITY.

The authors of this documentation explain the direct and indirect impacts of political instability to economic growth which affects the market income and consequently leads to persistent poverty. The source’s structure is initiated by an introduction to describe the relationship between political instability, economic growth, income among citizens of a country and the consequent poverty. It also has a literature review section on related existing works, another section in which empirical methods that contains empirical methods, their formulation and methodology. The next section involves statistical summaries of the empirical methods, an explanation of the empirical results and the last section concludes.

The authors use both empirical statistics and results and draw content from other intellectuals of related works. The source reinforces the fact that political instability is a core cause of poverty directly, through government changes which directly affect the economy of the country and indirectly through issues such as terrorism and government’s response to such issues. They respond to the fact that inequality in market income is the main cause of persistent poverty by explaining that political instability, whether caused by government changes or by the informal sectors shortens the time span for formulation and implementation of policies that lead to optimal macro and micro economic performances. The misbalances in micro and macro economic implementation leads to less economic growth, inflation, income imbalances and generally negatively affects the economy thus leading to poverty. If political instability remains for a long time, misbalances persist as well leading to persistent poverty. The authors also explain how political instability affects saving, rates of investment, capital and inflation and how the effect on these sectors affect the potential of the economy which consequently leads to poverty.

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Roy, A. L., Raver, C. C., Masucci, M. D., & DeJoseph, M. (2019). “If they focus on giving us a chance in life we can actually do something in this world”: Poverty, inequality, and youths’ critical consciousness. Developmental psychology, 55(3), 550.

The purpose of this source is to explain the effect of poverty and income inequality to the increase in the youths’ choice of getting involved in critical action behavior as a way of changing the oppressive social and economic status as established by a critical consciousness framework. The source is structured into two studies; Study 1 describes the critical issues that low income minority groups youths (aged 13-17) in Chicago refer to once asked what they would say really affects them in terms of structural oppression. Study 2 identifies the qualitative reports of youths that had gotten involved in critical action behavior and the relationship between poverty, income inequality in the neighborhoods, exposure to violence and the choice of the youth to get involved in critical action behavior. The authors majorly draw their conclusions from qualitative and statistical works created by other intellectuals as well as their own primary statistics drawn from the youths under study.

The source strongly contradicts the perception that high income inequality in the market is the leading cause of persistent poverty. It illustrates how critical consciousness caused by income inequality and social-economic oppression, actually does the opposite; it prompts the youth to embark on ways that would enable them to bring change in the communities with an aim of terminating poverty. The racial and ethical minority youths get involved in critical conscious activities such as applying for scholarship, career development and making efforts to create just political and social system as a way of evading poverty in contrast to what the previous source by Shehzadi et al. argues. The source shows that the social-economic and structural oppression does not necessarily lead to income inequality and consequential persistent poverty if the youth make the decision of changing the oppressive systems through critical consciousness.

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Palma, J. G. (2019). Why is inequality so unequal across the world? Part 2 The diversity of inequality in market income─ and the increasing asymmetry between the distribution of income before and after taxes and transferences.

The source answers the question whether inequality in income distribution affects the disposable incomes that different individuals and nations have and the choices that the rich and the poor make. The source is structured into two parts; Part 1, addresses how diversely income is distributed among countries and various social classes in the world and Part 2 addresses the potential of those nations and social classes in making market choices. The authors draw their conclusions and perspectives from the works of other intellectuals from different nations and also draw their own statistical inferences of how disposable incomes affects the choices of OCED countries as well as third world countries.

The source presents close-up statistical evidences of how OCED countries spend their disposable incomes on production and manufacture of a massive amount of export and own consumption goods such as machinery which boosts their economic status. It explains that the OCED’s ability to largely depend on themselves reinforces the government’s revenue to invest in more productive high income ventures hence considerable equality in the market and less poverty. In contrast, third world countries depend on OCED countries’ exports and loans from IMF and other global financial organization such that the government hardly has any disposable income to elevate its market income. As a result, the government is unable to fully cater for the economic needs of the country, which leads to less market income for the citizens, consequently poverty prevails. The source explicitly shows how inequality in market income among nations leads to persistent poverty.

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Manduca, R. A. (2019). The contribution of national income inequality to regional economic divergence. Social Forces, 98(2), 622-648.

The author of this source discusses how national income inequality has contributed to economic and regional divergence of the U.S. population such that the poor in the metropolitan cities have tripled the statistics of the poor in 1980. The author has structured the paper in a yearly chronological order to explain the state of the nation’s economy since 1980 to 2013 to 2019 and the processes that caused economic and regional divergences and the gap between the rich and the poor in the U.S. He explains that the spatial distribution of the rich and the poor, high dependency levels, incarceration and deindustrialization as the main causes of persistent poverty and economic and regional divergence.

The author uses historical data, Census microdata and research from other intellectuals compare the economic status in 1980 and the current economic status of the national income inequality that has led to regional and economic divergences. The source relates to the other documentations on persistent poverty and inequality in national income since it gives an overview of how a nation’s income inequality can lead to regional divergence on basis of how much the people in the economy earn which causes a disparity between the regions owned by the rich and how richer they grow, and the region inhabited by the poor and how poorer they become. The source answers the research question, how persistent poverty is caused by inequality in market income, in terms of how the areas in which the rich live are more developed and have better infrastructure as compared to areas that are dominantly inhabited by the poor and that is why there is regional divergence – the rich area and the poor area majorly caused by inequality in national income per head.

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Allais, S., Cooper, A., & Shalem, Y. (2019). Rupturing or reinforcing inequality? The role of education in South Africa today. Transformation: Critical Perspectives on Southern Africa, 101(1), 105-126.

This paper discusses the relationship between education, poverty and market and labor income and the relationship between poor education and persistent poverty. The source contains recommended policies for better education providence in schools in South Africa on the basis that better education will increase the chances of poor people in the labor market which will in turn lead to more income and consequently termination of poverty. The paper is structured thematically in terms of the educational policies that have been in existence since public school education was initiated, the weaknesses of those policies and the recommendations to make them better.

The authors use their own research results, historical documents as well as documents from other intellectuals who documented their works as early as 1980. The source relates to income inequality and persistence poverty in terms of the contribution of education in enlightment of the children and the exposure education offers such that people get skilled, get higher chances of being in profitable labor markets, get higher income which would ultimately terminate poverty. This source supports the fact that income inequality in the market is a major contributor to persistence poverty and changing education policies to make them better and more applicable in the labor markets could lead to more income pathways which could lead to termination of poverty in South Africa as well as other developing countries.

The source answers the claim that persistence poverty is caused by high inequality in market income by illustrating how individuals who have had education from systems that have practical policies have better skills, better jobs and higher income as compared to those who have no education or whose education system’s policies are faulty. The latter individuals, due to poor skills and education have lesser market income and are the ones who mostly dwell in poverty. If poor policies are not done away with, the ultimatum is poverty persistence.