In “The Upside of Income Inequality” Gary Becker and Kevin M. Murphy shed light on wealth gap, the reason behind it and the lesser thought perks it has. Throughout the article, the writers claim that it should be noted that inequality accord with being appreciative towards the return on investments made in human capital i.e. it rewards those who educate themselves more and are more adept and so is a positive catalyst toward the wage gap. According to me, the writers came across quite biased and ignorant. Though they did make some valid points regarding education and wage gap. It seemed as if they were quite determined to prove that education was the only reason behind the issue and disregarded important issues like unemployment, inherited wealth
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They claim that it is not indispensable for politicians in United states to be this much concerned about this growing income inequality as because of the obviousness in case of china and India regarding the inequality and economic growth. Now, their claim rest upon an assumption that different countries follow the same economic pattern. And while their research might be true for China and India, the same is not the case for America. The Economist in their article “How Inequality affects growth” argues that inequality has a great potential of impairing the GDP, if the lower class continues to suffer and have estimated that “a rise in the income share of the bottom 20% actually boosts growth.” [1] Research conducted by the International Monetary Fund and the National Bureau of Economic Research also point that societies which are more equal in terms of their financial status experience stronger growth rate, higher economic expansions, and are more prone to quickly recover from recessions. …show more content…
They constantly conclude that the most obvious reason behind wage gap is the demand for people who are more educated and skilled. But, then there is a really concerning problem of unemployment rising all across the world, which also includes unemployment among graduate students and people with bountiful degrees and a high level of education. Alyssa Davis, Will Kimball, and Elise Gould in their report “The Class of 2015” for ‘Economic Policy Institute’ extensively, with substantial statistics and research outcomes, covers the hardships high school as well as college graduates, are facing to get a good job. [3]
Becker and Murphy also ignored to write anything about the wealth gap created by people who just inherited their money without facing any hardships or without necessarily getting a good education. According to Uniform Financial Evaluation (UFE), “at least 62 percent did not, in fact, make their fortunes “entirely from scratch.” [4] So counter to their argument education did not play any part in the difference between these people and people with low-
They claim that it is not indispensable for politicians in United states to be this much concerned about this growing income inequality as because of the obviousness in case of china and India regarding the inequality and economic growth. Now, their claim rest upon an assumption that different countries follow the same economic pattern. And while their research might be true for China and India, the same is not the case for America. The Economist in their article “How Inequality affects growth” argues that inequality has a great potential of impairing the GDP, if the lower class continues to suffer and have estimated that “a rise in the income share of the bottom 20% actually boosts growth.” [1] Research conducted by the International Monetary Fund and the National Bureau of Economic Research also point that societies which are more equal in terms of their financial status experience stronger growth rate, higher economic expansions, and are more prone to quickly recover from recessions. …show more content…
They constantly conclude that the most obvious reason behind wage gap is the demand for people who are more educated and skilled. But, then there is a really concerning problem of unemployment rising all across the world, which also includes unemployment among graduate students and people with bountiful degrees and a high level of education. Alyssa Davis, Will Kimball, and Elise Gould in their report “The Class of 2015” for ‘Economic Policy Institute’ extensively, with substantial statistics and research outcomes, covers the hardships high school as well as college graduates, are facing to get a good job. [3]
Becker and Murphy also ignored to write anything about the wealth gap created by people who just inherited their money without facing any hardships or without necessarily getting a good education. According to Uniform Financial Evaluation (UFE), “at least 62 percent did not, in fact, make their fortunes “entirely from scratch.” [4] So counter to their argument education did not play any part in the difference between these people and people with low-