The Economics of Income Inequality: Exploring Different Sources of Income - Essay Sample

Introduction

Different sources of income are many people's source of sustaining their living standards. In every country, the income of each person can never be the same, and variability of earnings depends on the nature of the work one is doing, level of experience, the amount of work one handles, among many other decisive factors. All these differences can be termed as income inequality under economics. The paper explains all that involves the issue of income distribution and inequality. The objectives can be achieved with the question being, what are the causes of income inequality in the United States?

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Determinants of Income Inequality

Income inequality is seen as a noticeable difference and disparity in how the income of various people is distributed amongst different groups, populations, countries, or social classes (Reardon & Bischoff, 2011). Economically, the levels of social classes are determined by the differences brought about in the distribution of income to the individuals in the society or nation that they live in. Besides determining the social classes in society, income inequality also influences other things like the amount of political power, levels of wealth, and the kind of social status one holds in society. The inequality of income is a great determinant of the kind of life one lives, the health quality of families and individuals, and their well-being.

The levels by which the individuals get their income can vary through gender, age groups, race, the stature of disability, and levels of ethnicity in the country. These are the social determinants of the distribution inequality of income in society. The paper will focus on income inequality rather than the wage gap by the gender, age, and race of individuals of a particular career in the country. The paper focuses on the career field that is quite populated in the nation, which is the medical and teaching career in the country. The doctors and teachers seem to hold a huge number of people that work in the society of the United States. Most of them have different levels of working experience in their various sectors earning different amounts of salary to sustain their living standards.

In the United States, the employees have the highest levels of wage gaps among themselves as compared to other nations in the world today, no matter how developed they are. This is because most of the people depend on the salaries from the government as their sources to sustain their livelihood more than even the private sector (Gelman, Kenworthy & Su, 2010). The disparities of the wage gap, which are gender, age, and race, can sharply determine the wage bill of an employee in the United States.

The wage gap on a smaller scale can be determined by the level of education that one holds at the workplace and has also contributed to a noticeable kind of wage gap. This is because the less educated have their wages reduced in a way that is not proportional, which in the end benefits the rich and educated in society.

Focusing on gender as a determinant of income inequality in the United States, there has been a decreasing wage gap between male and female employees. The cause is the reduced number of men that earn wages as compared to the ladies who earned less in the past years. The wage gap is noticeably higher in the public sector than in the private sector in the United States and has been generally higher among women than in men.

As said earlier, in the past years, men were earning a higher percentage of income as compared to women, although it has been significantly reducing in recent years (Kenworthy, 2007). Various measurable factors greatly determined the wage gap between men and women. Such factors are the level of education, occupational grouping, and experience that an individual has been able to attain while they have been working in recent years. Some of the factors like gender discrimination are quite difficult for them to be measurable, and yet, in the end, they contribute greatly to the growth of income inequality. Gender can affect the wage gap of various careers, but as for this, the paper shall dwell on how it affects the wage bill gap in the doctors and teachers.

The Effect of Gender on the Wage Gap Among Doctors

The main question now comes in, how does gender affect the income inequality amongst the doctors. In most countries, doctors of any kind tend to earn a good amount of salary, mostly due to the nature of work that they do. The gender wage gap has widened in recent years in the United States. Despite the pay increase for the medical doctors and physicians in various fields, the situation in the income between women and men is getting worse. The reason behind it is that the pay increases have not been similar between both the female and male doctors. In the year 2018, the men primary healthcare physicians earned more income than women by a gap of 18%. (Kane, 2018).

Most female workers claimed that their male colleagues were given better contract terms. This term allowed them to attend to more patients as compared to those in the female gender, making them get more financial income than female colleagues. Besides, others claimed that there was biasness in terms of determining the level of productivity between men and women.

Whereby men were more productive as compared to women, and thus their salaries were a bit higher than of women due to this kind of consideration by the employer. To solve this, there should be more transparency and equality when treating both genders. In this way, employers will be tapping out the best out of their employees, thus improving work productivity in the medical sector. It also promotes workplace practices and ethics hence promoting equality in terms of income amongst the employees.

The Effect of Gender on the Wage Gap Among Teachers

Gender can also affect the earnings of those in the education sector, where the male and female teachers have a difference in their wages that they earn. It has seemed to be a problem in the United States, where the female teachers are mostly seen as low in terms of their skills deployed at the workplace, with a poor kind of social status and thus are meant to receive lesser income as compared to the male teachers in schools (Farinde, Abiola, Lewis & Chance, 2012). Despite all these issues, the teaching sector in the United States is highly filled with women.

Generally, the occupations that are highly dominated by women usually earn less salary compared to the work input they have. This can be seen as one of the causes of income equality between males and females since, in the same field where the female dominates, the male individuals get more income as compared to the females since they are considered to be more skillful than their female counterparts. In teaching, different grades of teachers get different amount of income; so, when the quality of grades rise is when the salary of the teachers' increases. Something serious is that as the level of the grades goes up, the number of the female teachers reduces by a huge gap as compared to those handling students in the lower grade, and now more male teachers get to earn more income because of their numbers in the upper grades. This creates a huge gap in wage inequality between male teachers and their female colleagues in schools.

The reason behind this issue is that most of the male teachers who get to teach students at the higher levels have more experience and higher levels of education and achievements, which makes them qualified to teach at the higher levels as compared to the female teachers who have lesser qualifications. Furthermore, there is the perception that male teachers cannot interact easily with young children in the lower grades.

These kids are left under the rightful responsibility of the female teachers to educate and prepare them for the higher grades where they will now meet the male teachers. This perception allows room for a greater amount of wage bill gap between the male and female teachers in the United States since those teaching in higher grades have a higher income. This assumption also makes teachers assume that teaching older children is harder than teaching, the younger ones, which now makes more female teachers teach young children in the lower grades. Women choose this because of their natural habit of caretaking young children and would not demand much income to do this particular duty for the children. This will increase the wage gap between male and female teachers.

The Effect of Racism on the Wage Gap Among Doctors

Besides having gender as the cause of income inequality, racism can also contribute highly to this issue. Looking at the United States, for example, you find that a White employee will earn higher than a black employee, which now brings a disparity in the wage bill. The white male physicians earn more salary than the black male physicians by a substantial gap. On the other hand, both white and black physicians earn almost the same salary with or without any kind of standardization. The issue of racism affecting the salary that the doctors earn seems to only affect the physicians of the male gender.

This issue in the United States seems to have come from the admission of the medical students in the medical colleges, whereby more whites tend to get highly admitted as compared to the blacks (Dickman, Himmelstein & Steffie2017). Once there is a lesser number of blacks being admitted to the medical colleges, white medical doctors will flood the job market as compared to the blacks. Hence, more whites will have higher chances of earning higher income as compared to blacks in the same field.

This encourages more chances for income inequality between white and black medical physicians. There should be equality when admitting medical students in schools and colleges. Consequently, they have equal opportunities, which brings a healthy competition in terms of work out and performance while at the same time maintaining the health wage bill gap between the whites, blacks, Caucasians, Asians, and other races that live in the United States. Also, the disparities between the races persist due to behavior adjustments of the medical physicians, specialty, and working hours.

The Effect of Racism on the Wage Gap Among Teachers

Racism can also affect the wage gap between teachers when it comes to the education sector. Latino-American teachers have a better chance of getting a good working environment as compared to blacks. This includes their salary and their chances of increasing their education levels. As a result, it contributes to the increased gap in income inequality in the nation.

We also look at the female teachers under various grades of schooling. It's noted that the early care education teachers are most of the black race and receive a lower amount of wages, while the higher grades of learning are mostly taught by the white female teachers who receive a huge amount of salary (Wallace, Mendola, Liu & Grantz, 2015). This has made this particular sector of education to be the most racially diverse area. Most of the teachers who teach at the early care education levels are African American and Hispanic women who are of the black race.

This particular disparity can make a teacher in the early child care to fail to deliver the quality services that they are expected to produce. This happens even though for a given case, you can find that a teacher in the early child care has a degree in education, as same as the teacher who is at the higher-grade education level. Yet, their salaries and roles are quite different (Fisher &Houseworth,2012). This will always have a great impact on the wage bill gap between the two groups of teachers in the United States.

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