Poverty
income at which a family of a given size (generally a family of four) is living in poverty. In 2023, this was $30,000/year for a family of four.
Poverty Line
Visual representation of income inequality
Provide a mathematical model for income inequality by comparing it to perfect income equality
lorenz curve
Getting a HS diploma leads to an increase of $8,000/yr, getting a bachelor's degree leads to an increase of another $25,000 annually.
Less Education
Government help available to people who qualify for it, generally under a certain income threshold (Ex: Medicaid available for a family of 3 making less than $24,860 in 2023)
Means-tested
Percentage of households below the poverty line. In 2023, this was 11.5%.
Poverty Rate
a lorenz curve is a graph that shows
he distribution of income or wealth within a population
Efficiency wages provide incentives for workers to stay loyal to the company
No Labor Power
Government help available to everyone who fits a certain demographic (Ex: Social Security available for all ages 65+)
Non-means-tested
Define absolute and relative poverty.
Absolute poverty is when people can't afford basic necessities like food, shelter, and clothing, while relative poverty measures how someone's income compares to the average in their society.
how is a lorenz curve how is it used to measure income inequality?
The Lorenz curve visually shows how income is distributed among a population, helping to measure income inequality by comparing the actual distribution to an ideal where everyone has an equal share.
Gender pay gap exists even accounting for different jobs of men and women
Discrimination
Governments can reduce inequality
tax relief and income support or transfers
What is the difference between absolute poverty and relative poverty?
Absolute poverty refers to the inability to afford basic necessities like food, shelter, and clothing, while relative poverty refers to one's income or consumption relative to the median in one's society.
How does the Lorenz curve assist in measuring income inequality?
The Lorenz curve visually represents income distribution within a population, allowing for the comparison of actual income distribution to an ideal state of equality, thus measuring income inequality.
Identify and explain three factors contributing to income inequality.
Technological Changes, Globalization, and Educational Disparities
two strategies governments can employ to reduce income inequality.
Progressive Taxation
Social Welfare Programs
How many people are in the U.S were living below the poverty line in 2023
40 million
if the Gini coefficient is 0 how equal is the income distribution
complete income equality
Name one factor contributing to income inequality and explain its impact.
One factor contributing to income inequality is technological changes, which can lead to job automation, altering the demand for certain skills and exacerbating wage disparities.
What are two strategies governments can implement to address income inequality?
Governments can address income inequality through progressive taxation, where higher-income individuals are taxed at higher rates, and by implementing social welfare programs to support those in need, such as unemployment benefits and healthcare subsidies.