Monday, October 26, 2009

Gap between the rich and poor

One measure used by communists and socialists is to determine economic prosperity among those across all economic "classes".

A statement is made that the economic growth that has occurred has not helped those that are considered poor by whichever metric is used. The way to measure this is look at top income earners and those under a poverty level. If this measure is becoming wider than in the past, it shows that the poor is either getting poorer or not enjoying whatever growth has occurred in the economy.

Sounds great! One should be a champion of those in the lower economic levels and this seems a simple way to measure there relative levels of prosperity.

Reasonable Questions:

-Does measuring income solely determine ones relative level of prosperity?
-Historically has this metric accurately portrayed economic success?
-Does an increase in the gap between the "rich" and "poor" signal a negative sign for those that earn lower incomes?
-What inputs account for the change in levels of relative income?

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