We constantly hear that "the gap between rich and poor is widening", but does that really mean ANYONE is worse off?
For example, Say there are two people. One makes $100,000 a year. The other makes $10,000 per year. The difference in their incomes is $90,000.
Over the next year they both experience a 10% increase in income. Now the first person is making $110,000 a year and the second is making $11,000 a year. Both are better off. Both have more money to spend.
However, the difference in their incomes has increased from $90,000 to $99,000. Even though no one is worse off than before and indeed both are better off, the gap between rich and poor has just widened by $9,000!
Doesn't this example show the income gap to be a meaningless argument? In fact, if incomes continue to rise, doesn't that mean that the income gap HAS to increase?
2007-10-10
14:05:22
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7 answers
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asked by
David M
6