In recent years, increasing inequality in the distribution of income has been a subject of considerable public concern, political attention, and academic research. Income inequality is a measure of how equally the income pie is divided among all members of society. The relative income, or gauge, can be defined how well the poor are doing economically compared to the rich. In other words inequality is a measure of how equally the income pie is divided among all members of society. According to Paul Ryscavage in Income Inequality in America, income is influenced by several social, economic, and demographic factors. Occupation, industry of employment and source of income represent the economic factors. The main social factors are household composition, education level, and education quality. Finally, age, sex, and race compose the demographic factors (15). Socio-economic diversity can be a clean representation of how well income is distributed among social groups.

In an ideal society the majority of households should have incomes above the cost of basic needs to create a well-balanced economy. Therefore, the foundation of economic success is based largely on this distribut

Borland, John. Fear of Falling. California Journal pp. 16+ Aug. 1996.

John Borland points out in "Fear of Falling" that the income gap has been steadily increasing since the postwar era. Currently the income inequality is at its highest level ever (1). US Bureau of Census indicates that an increase of 4.7 % of the total income allocated at the top 5 %, while the lowest quintile had a decrease of 1.2% of the total income held between 1970 and 1996 (473).

People. New York, Oxford University Press Inc., 1988.

Government has already taken steps in increasing the minimum wages but Hacker and Ferguson agree that minimum wage is still too low to generate income above the poverty line (230; 5). Wages have a major impact on income distribution. Economists and politicians acknowledge the fact that low wages increase the poverty. Ryscavage explains that in order to defeat the poverty, government has to increase the minimum wage (88). The involvement of government is essential because of the competitive market. Corporations have to cut down in production costs and usually pay the minimum for labor and never take the initiative to increase the wages on their own.

distribution. New York, Praeger, 1962.

Ryscavage, Paul. Income Inequality in America: An Analysis of Trends. Armonk, M.E.

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