¶ … Income Distribution Gap
The global fiscal crisis will be borne by the millions of people who do not have a share in the benefits that were derived from the global economic expansions that occurred previously. Not only has the gap widened between low wage earners and high wage earners in nations across the globe, the world's income gap distribution has widened. Economists have long concluded that a limited degree of income inequality contributes to worker motivation, promotes innovation, and rewards talent and effort. Nevertheless, when income differences become too great, the dynamics become counter-productive. Runaway income inequality is considered to be a destructive force, such that "rising income inequality represents a danger to the social fabric" ("Board of Canada," 2012). The repercussions from excessive income inequalities include children not attending school so they can contribute to household earnings by going to work, increased crime rates, lower life-expectancies, and malnutrition.
In the years between 1990 and 2007, global employment reportedly increased by 30% and was accompanied by income redistribution away from laborers and into the hands of the wealthy. The overall result was a significant decline in share of wages in total national income, or gross domestic product (GDP). Latin America and the Caribbean saw the largest decline in wages as a share of gross domestic product (GDP) at 13%, while more developed countries with advanced economies fell nine percent overall. High inequality countries are predominately in South America and southern Africa. Those countries that are considered to have low inequality are found in Europe. Canada and the United States are identified as medium income inequality countries. Interestingly, the increase in income inequality has proved to be greater in Canada than in the United States. To achieve global perspective, consider that the people who are grouped as the richest 10% in the world receive 42% of the total world income, while the people who fall in the poorest 10% receive just one percent of the world total income ("Board of Canada," 2012). Global income distribution is very highly skewed toward the 16 richest countries that make up the top decline in the world income distribution ("U.N. Report," 2008).
Moreover, working families experience an increase in their levels of debt in order to pay for consumables and, notably, for housing investments in countries that permit or permitted "unregulated financial innovation" ("Board of Canada," 2012). The recent fiscal crisis is unlikely to impact the wealthier people who saw the greatest increase in come; however, future policy can have important impacts. For instance, "falls in income concentration due to economic downturns are temporary unless drastic regulation and tax policy changes are implemented and prevent income concentration from bouncing back" ("U.N. Report," 2008).
As awareness of the world income gap has increased, national leaders and economists have come to share the perception that globalization is not advantageous for most of the world's population (World of Work Report, 2008). The dynamics influencing the development and sustainability of income inequalities are complex and numerous. Analysts point to the role of financial market deregulation, the erosion of traditional redistribution systems due to lower taxation on high-income earners, and the overall ineffectiveness of traditional policies and institutions to deal with excessive inequalities that are market-driven.
A metaphorical frame. Considering when and how different countries have benefitted from global economic perspectives is a useful frame for understanding the growing gap between national economies. Metaphorically, nations can be thought of as starters in a long-distance race. The starting points of runners are staggered across the track in what appears to be a carefully calculated attempt to create an equal running distance for each runner, given that the track consists of concentric lanes that are shorter in total length at the inside of the track and longer at the outside of the track. Accordingly, the International Association of Athletic Foundations (IAAF) has established that the standardized track lane width is 1.22 meters, and a formula [ L = 2S + 2pi (R + (n-1)w) ] is used to calculate the various distances for each track. Using the formula to calculate the distances, it can be shown that the track in lane 2 is 407.67 meters, lane 3 is 415.33 meters, lane 4 is 423 meters, lane 5 is 430.66 meters, lane 6 is 433.38 meters, lane 7 is 446 meters, and lane 8 is 453.66 meters. Hence, runners who draw the inside track will start further forward on the track to make up for the differences in track length in absolute terms, and so that the same finish line can be used for...
To an average individual within the United States however, the relevance is reduced, with importance only for gathering general knowledge on the country. The jurisdiction of the analysis expands as far as the data is available and does not constitute intrusion on matters of national secrecy. 2. Review of Literature 2.1 Research Tools The primary tool to be used in the answering of the posed questions is that of conducting research. This
S. It too had run into a deep recession and too sought ways out of it by considering tax options. In a similar way, both candidates running for the South Korean presidency in the 2012 presidential elections vowed to "to prioritise "national reconciliation," better "economic democracy" and social welfare" (BBC News (17 December 2012) South Korea's presidential candidates) and to do this via easing South Korea's income gap between rich
Political Science Canada: Comparative Politics Canada, like any other nation suffered terribly from the effects of the global financial crisis. The economic impacts from Global Financial Crisis were resolved through Canada's political and provincial administration structures. The Great Recession further intensified such trends towards elements of the precarious unemployment across Canadian provinces such as British Columbia mostly with certain population groups. This paper intends to illustrate how the global fiscal crisis has
In other words, there are few controls in place to ensure responsible spending or, in the case of Greece, that the books are not cooked. The implication of this is that Greece makes errors and commits fraud, knowing that the eurozone will be forced to bail them out or risk grave instability. The other nations are then forced to bail Greece out, because they share a common currency and
Running head: The COVID- Slowdown and the Global Financial Meltdown of 2008 1The COVID-19 Slowdown and the Global Financial Meltdown of 2008 14The COVID-19 Slowdown and the Global Financial Meltdown of 2008Coronavirus virus, commonly known as COVID-19, has caused the world\\\'s greatest fear since the 2008 global financial crisis. With its rapid transmission rate, the World Health Organization announced that it had surpassed the epidemic situation to a pandemic. The
Economics - Country Analysis Country Overview and Current Events (News) Ethiopia, traditionally known as Abyssinia, is a landlocked Sub-Saharan country located at the Horn of Africa in East Africa, bordering Somalia, Kenya, Eritrea, Djibouti, Sudan, and the newly-created South Sudan. It covers approximately 1,126,829km2 of land; about the size of the state of Texas, and was, until the split of Sudan, the second-largest country in Africa. Being landlocked, Ethiopia largely relies on
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