The Essay is written as below; Kindly look into.
Explanation:
What is the main difference Between Income Inequality and poverty?
First of all we need to see the main difference between Income Inequality and Poverty. Poverty is a term which is used to measure the basic standard of living of individuals in the country while Income inequality is the unfairness in the distribution of income among various individuals living in an economy. It is ratio of percentage of income to the percentage of population.
Policies to reduce income in quality and poverty
We now explain certain policies to reduce income in equality and poverty. Following are some factors of polices taken to reduce income inequality and poverty.
1. Increase the minimum wage.
Normally the minimum wages is defined as “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract. The minimum wage in any economy is designed to create a minimum standard of living to protect the health and well-being of employees. The government could increase the national minimum wage. This is an effective way of increasing the incomes of the low paid and therefore reducing wage inequality.
2. Expand the Earned Income Tax.
The policies which encourages the higher savings rates and lower the cost of building assets for working and middle class households can provide better economic security for struggling families. Access to fair, low-cost financial services and home ownership are also important pathways to wealth. Strong evidence shows that the earned income tax has been an effective tool to increase work and reduce poverty.
4. Invest in education.
There are differences in early education and school quality which are the most important components contributing to persistent inequality. Timely Investments in education, beginning in early childhood with programs can increase economic mobility, contribute to increased productivity and decrease inequality. AS poverty affects education and our children living in poverty tend to be exposed to more stress, more intense & longer lasting stress that negatively impact attention, focus, cognition, IQ and social skills.
In the underdeveloped countries and developing countries, people instinctively know that education is a good thing for their children, and in developed countries, we have a lot to learn and to relearn about the importance of education. People who live in poverty are aware of the fact that sending their children to school will give them opportunities that they didn't have.
5. Progressive Taxes.
A progressive tax imposes a higher rate on the wealthy than on the poor. It's based on the taxpayer's ability to pay. Poor families spend a larger share of their incomes on cost of living expenses. They need all the money they earn to purchase and pay for basics like shelter, food, and transportation. A tax decreases their ability to afford a decent standard of living by subtracting from their income.The wealthy can afford the basics. A tax decreases their ability to invest in stocks, add to retirement savings, or purchase luxury items.
Conclusion and Comparative Assessment
We need to evaluate each of these policies mentioned above, if wisely implemented, has the potential to lift the working families out of poverty. It will support greater economic mobility and reduce the inequality rise and growth. All of these policies could be endorsed at the local, state and federal levels if there is political will. The question arises
How does income inequality affect poverty?
Both of these factor; Inequality and poverty affect each other directly and indirectly through their relation with economic growth. Poverty can be reduced through increases in income, like changes in the income distribution, or through a combination of both. It is however clear that both concepts are related, but neither replaces the other.” Therefore, it can be conditional that inequality exists because there is private property or clearly established hierarchies. But there are areas where inequality is unavoidable. If policymakers at the state level are deeply concerned about reducing poverty in their countries, they should start by reducing or limiting inequalities in the society.
