Chad Blenz
Econ 101, Written Report
19 April 2015
There are multiple factors that make measuring inequality difficult. Such as In-Kind Transfers, which are known as nonmonetary items such as, food stamps, housing vouchers, and medical services that are provided for the poor. Standard measurements of the degree of inequality do not take account of these in-kind transfers, which are relied on by the poorest individuals in our society, and without these in-kind transfers as part of income, there is a huge consequence on the measured poverty rate.
Another factor that we must keep in mind when measuring inequality is the economic life cycle. The economic life cycle sheds light on the correlation between age and income. The young have a substantially …show more content…
Transitory forces are fluctuations in ones current income. In this scenario, ones current income is not reflective of their typical annual income for whatever reason and this why we must look at one’s permanent income when measuring their standard of living, which is representative of their normal, or average, income.
There are many different approaches to reducing inequality, many of which focus on helping people escape poverty. One of these approaches is the fluctuation in minimum wage. Advocates view the ability to alter the minimum wage as a way of helping the working poor without costing the government anything. Minimum wage uses the tools of supply and demand and its effect is largely dependent upon the elasticity of demand. Advocates of a high minimum wage argue that the demand is more elastic, especially in the long run when firms can adjust employment and production more …show more content…
In-Kind transfers are designed to help provide the poor with some of the goods and services they need to raise their living standards. One of the more commonly known In-Kind transfers is referred to as food stamps, which are government vouchers that can be used to buy food at stores; the stores then redeem the vouchers for money. The goal for this government driven program is to provide purchasing assistance for low-income people in the United States so they can obtain adequate and nutritious diets for low-income. This federal aid program is administered by the U.S Department of Agriculture, under the Food and Nutrition Service. Food Stamps cost around 74 billion dollars a year and supply around 46 million Americans with an average of $125 for each person per month in food
Econ 101, Written Report
19 April 2015
There are multiple factors that make measuring inequality difficult. Such as In-Kind Transfers, which are known as nonmonetary items such as, food stamps, housing vouchers, and medical services that are provided for the poor. Standard measurements of the degree of inequality do not take account of these in-kind transfers, which are relied on by the poorest individuals in our society, and without these in-kind transfers as part of income, there is a huge consequence on the measured poverty rate.
Another factor that we must keep in mind when measuring inequality is the economic life cycle. The economic life cycle sheds light on the correlation between age and income. The young have a substantially …show more content…
Transitory forces are fluctuations in ones current income. In this scenario, ones current income is not reflective of their typical annual income for whatever reason and this why we must look at one’s permanent income when measuring their standard of living, which is representative of their normal, or average, income.
There are many different approaches to reducing inequality, many of which focus on helping people escape poverty. One of these approaches is the fluctuation in minimum wage. Advocates view the ability to alter the minimum wage as a way of helping the working poor without costing the government anything. Minimum wage uses the tools of supply and demand and its effect is largely dependent upon the elasticity of demand. Advocates of a high minimum wage argue that the demand is more elastic, especially in the long run when firms can adjust employment and production more …show more content…
In-Kind transfers are designed to help provide the poor with some of the goods and services they need to raise their living standards. One of the more commonly known In-Kind transfers is referred to as food stamps, which are government vouchers that can be used to buy food at stores; the stores then redeem the vouchers for money. The goal for this government driven program is to provide purchasing assistance for low-income people in the United States so they can obtain adequate and nutritious diets for low-income. This federal aid program is administered by the U.S Department of Agriculture, under the Food and Nutrition Service. Food Stamps cost around 74 billion dollars a year and supply around 46 million Americans with an average of $125 for each person per month in food