LECTURE 5: ECONOMIC INEQUALITY

Question 1

Economic inequality

Answer 1

Differences in wealth and how we measure them and is often measured in incomes

Question 2

Operationalizing

Answer 2

Turning abstract concepts into measurable observations

Question 3

Dunning Kruger effect

Answer 3

We think things are simpler than they are, the more we know about something the more complicated we realize it is

Ex: stereotypes about poverty

Question 4

Inflation

Answer 4

To access income over time, we need to consider inflation

Ex: stats with CPI consider how product prices have changed

Question 5

Average vs median income

Answer 5

Average income: tend to skew up there’s a few very rich people in society… this makes the average income appear higher than representative of the average person

medians “tend to be more truly representative of incomes

Question 6

Active vs passive income

Answer 6

Active: exchanging time for money
Ex: money earned for your labor

Passive: stock market income
Ex: interest

Question 7

Investments

Answer 7

Shares (own small portion of company) and bonds (loaning a company or gov money) some are riskier than others; less risky ones, gov bonds tend to have lower returns

Question 8

Why does the stock market matter

Answer 8

1. You need to know this for your own life
2. The rich stay rich through passive income

Question 9

Allostatic load

Answer 9

• the cumulative burden of chronic stress and life events

Question 10

Mathew effect

Answer 10

• the factors that let the rich stay rich

Question 11

Taxing the wealthy

Answer 11

Canada ranks 20th away OCED countries with a top marginal tax rate of 55%

Question 12

Ascribed status

Answer 12

Attributes adv and disadv assigned at birth

Question 13

Achieved status

Answer 13

Attributes adv and disadv developed throughout life as result of effort and skill

Question 14

Quintiles

Answer 14

We distinguish inequality between groups by separating the population into. 5 income groups. When looking at within quintile income differences over time, we see that inequality has grown

Question 15

Why did inequality grow in Canada

Answer 15

1. The rich got richer
2. Workers lost bargaining power
3. Corporate consolidation

Question 16

Oligopoly

Answer 16

When a marked is dominated by a small number of large sellers/ producers and it is often results in competitors price matching in mutually beneficial ways

Ex: airline industries

Question 17

Main takeaways

Answer 17

1. Inequality has grown in Canada since 1980
2. Because of the Mathew effect and passive income the rich stay rich
3. Inequality has risen due to globalization

Question 18

House hold income

Answer 18

Households gained an extra income

As women moved into the labor market household incomes have increased but individual incomes have actually slightly decreased

Question 19

Debt

Answer 19

Having a high income is not the same as being wealthy (net worth)

• debt invisibilizes the difference between rich and poor we can’t see who has debt

Question 20

How to measure global inequality

Answer 20

• absolute poverty (lack of material well being resources)
• relative poverty ( lack of economic resources)
• extreme poverty (less than $1.25 a day)