Inequality of income doesn't have to entail a bad economy?

[fakename]

Here’s a guess that if correct, might prove enlightening (or not, my insight is actually pretty low-brow).

We know that income inequality is based on taking fifths of the working population and then seeing how much each fifth makes.

Thus, some quintiles have so and so income and so and so % of total income and some quintiles make more than others.

Under some conditions, a quintile can have less money than another w/o it being bad. For instance, if there are more factories or businesses then there will be a need for more people and the expansion of the labor force would lower wages plus the magnitude of the increase in labor could be greater than the magnitude of the rate of providing more than the necessary for daily life. In relation to the other quintiles, inequality would have increased greatly.

Is that an accurate view of how inequality statistics could disguise an otherwise booming economy?

 

[Bakmoon]

Here’s a guess that if correct, might prove enlightening (or not, my insight is actually pretty low-brow).

We know that income inequality is based on taking fifths of the working population and then seeing how much each fifth makes.

Thus, some quintiles have so and so income and so and so % of total income and some quintiles make more than others.

Under some conditions, a quintile can have less money than another w/o it being bad. For instance, if there are more factories or businesses then there will be a need for more people and the expansion of the labor force would lower wages plus the magnitude of the increase in labor could be greater than the magnitude of the rate of providing more than the necessary for daily life. In relation to the other quintiles, inequality would have increased greatly.

Is that an accurate view of how inequality statistics could disguise an otherwise booming economy?

You are very right. Income inequality does not necessarily mean that the economy is doing bad. However, income inequality usually isn’t used as a measurement of how well the economy is doing anyways because of this reason. The reason why a lot of people have a problem with high income inequality isn’t that it means a bad economy or that everyone should have the same of everything, but that it can be a sign that the game is rigged, so to speak. If there are a lot of barriers for the poor from being able to improve their economic situation (such as lack of education, difficulty obtaining start up loans, legal impediments to starting small businesses etc…) this will lead to income inequality. Income inequality is more of a barometer of whether or not lower and middle class people have a chance of being able to rise up economically than it is a way of seeing how the economy is doing as a whole.

 

[josethekke]

in india about 10% of the population is having only 17rupees per day for their survival sothey cannot pay for their basic needs only few organization is doing some help they are voiceless and not organizesd peolple in the community

 

[fakename]

You are very right. Income inequality does not necessarily mean that the economy is doing bad. However, income inequality usually isn’t used as a measurement of how well the economy is doing anyways because of this reason. The reason why a lot of people have a problem with high income inequality isn’t that it means a bad economy or that everyone should have the same of everything, but that it can be a sign that the game is rigged, so to speak. If there are a lot of barriers for the poor from being able to improve their economic situation (such as lack of education, difficulty obtaining start up loans, legal impediments to starting small businesses etc…) this will lead to income inequality. Income inequality is more of a barometer of whether or not lower and middle class people have a chance of being able to rise up economically than it is a way of seeing how the economy is doing as a whole.

Yes but it’s also possible for there to be income inequality, lower wages and enough stuff for everyone (even exceeding basic needs).

It doesn’t really matter if the system is not flexible enough for everyone to get to the top or to move; feudal society was more restricted in that sense at certain times, and it was still a good society.