Income inequality essay

Income inequality is an important issue in the USA. There exist many factors which are assumed to drive income inequality: discrimination, social differentiation, the impact of geographic location and neighborhood, etc. Income inequality is high in the developed countries, and the processes of globalization tend to aggravate inequality. In particular, the incomes of upper and middle class citizens tend to increase, and the incomes of bottom middle and low-income class further decline. Income inequality also depends on the state: for example, in 2009 the lowest income inequality was witnessed in Maine while the highest income inequality was recorded in Texas (Noah, 2013).

Some of the growth of income inequality is attributed to the increasing power of multinational corporations, global financial institutions and people possessing great power. In 2011, an international movement named “Occupy” emerged; the goal of this movement is to achieve greater equality in the distribution of income and resources among people. The leaders of this movement state that income inequality undermines democracy and leads to social instability (Noah, 2013).

Structural factors shaping income inequality are interrelated with the governmental policies, decisions and strategies. Income inequality has many negative consequences for the society such as the lack of opportunities for young people, low social mobility, discrimination, increased level of stress and aggression, etc (Reardon & Bischoff, 2011). Among the factors influencing income inequality there are the policies pertaining to unemployment insurance and minimal wages, tax reforms and changes, tax policies and programmes of income support (Banerjee, 2010).

Furthermore, income inequality itself causes more dangerous social tendencies such as the segregation of affluence and poverty and deterioration of low-income communities. Income inequality is assumed to relate to gender, but the research data associated with income inequality also indicate that there might exist gender stratification or the stratification of particular social groups pertaining to income.

It is important to analyze existing distribution of income in the context of racial/ethnic differences, gender differences and social groups formed by different combinations of racial/ethnic and gender characteristics. It is likely that there are several vulnerable social groups which are struggling to overcome income inequality. Studying the specifics of income inequality is important because addressing this social issue will help to enhance social stability, might contribute to the reduction of crime and strengthening of the economy in general.

Research question

The major research question considered in this paper is formulated as follows: “Among U.S. adults, how does the level of income differ between gender and race/ethnicity?”. The data for this analysis will be based on the data of Current Population Survey (CPS) which was conducted for the Bureau of Labor Statistics by the U.S. Census Bureau. It should be noted that instead of absolute income values, income groups will be considered in order to establish more precise borders for identifying income inequality.


In this research, there will be three major hypotheses. Hypothesis 1: Among U.S. working adults, differences in income level exist between genders. Hypothesis 2: Among U.S. working adults, differences in income level exist between different races/ethnicities. Hypothesis 3: Among U.S. adults, differences in income level exist between the different social locations created by race/ethnicity and gender.

Basing on the preliminary analysis of sources devoted to studying income inequality, it is possible to assume that there exists gender-based income inequality and income inequality related to race/ethnicity. Therefore, the initial assumption is that both Hypothesis 1 and Hypothesis 2 are correct. Furthermore, it is assumed that there are specific social locations for which income level difference is statistically significant, i.e. that Hypothesis 3 also holds.

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