China Income Inequality

Income is an economic standard to retain a successful life in today’s society. An average individual hopes for stable, reliable and a fair income, however, when the standards don’t meet expectation, it gives rise to social and economic issues. One of the more prominent issue we are facing in our income inequality. The standard definition for income inequality would be the gap between individuals or households who makes the most money and who makes the least, or as some would put it, the gap between the rich and the poor. Most data suggest a rising inequality in income, which caused a lot of concern and distress in people, mostly about matters such as unequal access to opportunity and resources such as nutrition and education. However, some
As evident as it sounds, income inequality suppresses economic growth of a nation. Arguments can be made that income inequality would lead to a harder working society, resulting in prosperity. Even though there are some statistics from countries that prove that right, such as Chinas GDP growth from 1979 to 1984, they are inconsistent and often fall of the chart. These short-term growths are often mistaken for positive attributes of income inequality, however, over the long term, it acts as a negative influence on the economic growth. Although, China had a growing economy since 1980’s, the income inequality only rose higher and has one of the highest disparities among wealth distribution. A study done to understand the relationship between inequality and economic growth states that, under external situations when there are individuals faced with unequal opportunities that they deem unfair, those individuals will also exhibit lower effort, and the consequences of this behavioral response could be substantial. This discouragement effect could show up not only in on the job work effort but also in human capital investment and other activities that help a person advance into higher earnings groups (Hyejin Ku and Timothy C. Salmon,
Study in the early 21st century established a positive relation between crime rates and income inequality. Since resources and job opportunities or resources are rather scares in an unequal nation, the individual is more likely to hold resentment or hostility in general if they don’t get the job or resources. Additionally, the economic standpoint of the individual will also lead him to be belittled or given less importance to, resulting in high chances for criminal behavior. Another factor that increases crime rates are the reduced spending for law enforcement in certain areas due to the rich-poor wage gap. This allows for less control of a particular region or district and allowing more crime to take place. A society with balanced income will have sufficient money to spend on law enforcement. A study also show that violent crimes decreases when economic growth improves as well as, violent crime is jointly determined by the pattern of income distribution and by the rate of change of national income, we can conclude that faster poverty reduction leads to a decline in national crime rates (Pablo Fajnzylber, Daniel Lederman and Norman Loayza, 2002). Most of these factors are just correlations and not causations. There is no real evidence implying poverty caused violent crime and some argue that poor people should have less incentive to commit a crime if they want to get out of