What is a definition of poverty which is understood as a relative value, the lack of economic freedom, material well-being, relative stability of social conditions. Through its maintenance, expansion and refinement, the state can prevent high income inequality.
There is a set of definitions of poverty which is characteristic for the area under consideration.
There are several common to middle class: charitable and highly paid social groups, financial and administrative services, public organizations, government ministries, large corporations, and so on.
Middle class is distinguished by high heterogeneity and even ambiguity in many objective and subjective criteria. This prevents the understanding of the common interests of representatives of the middle class.
It’s important to mention in a “What income inequality is?” essay that the presence of the middle class provides stability and dynamic economic development, helps to prevent and neutralize the impact of the social economy on the national economy. The activity of the middle class includes a huge number of enterprises, organizations, waste disposal and regulation of industries, increases and decreases in the supply of goods and services.
There are two main types of the middle class: active and passive.
Active class includes organizations, groups, collective (federation unions) organizations, political parties, companies, social groups.
In the passive group, organizations, collective (federation) organizations, political parties, companies, educational and cultural institutions, working conditions and positions, but not all this is recognized.
In the modern form, the middle class is distinguished by high heterogeneity and even ambiguity in many objective and subjective criteria. This prevents the understanding of the common interests of representatives of the middle class.
There is a stereotype of the effective movement for the middle class, which makes it difficult for the middle class to serve as a “model” for the entire society. Remember in the essay on income inequality that, in modern America, there are many “grandeur” types of entrepreneurs, and their practitioners are often rewarded with high incomes. Such entrepreneurs, with the help of the middle class, are able to make the whole society better.
Effect of income inequality on the distribution of income
The thesis of the income inequality essay is that, in the broad sense, the middle class is a part of society where the income of any part of the population is higher than the incomes of other elements of the same group. The primary source of income of the middle class is its active participation in all sectors of the economy: distribution of incomes, amount of income from property and self-employment, social security and benefits, etc.
In the context of the weakens the function of the middle class, since the distribution of income is reduced, the share of income from individual labor and entrepreneurial activity declines. As a result, the social stratification of Americans improves.
The advantages provided by this layer depend on the high quality of education and social protection. The level of social protection is determined by the level of the standard of living and economic activity of the population.
Wages and pensions are considered as the basic components of incomes of the middle class. The wages are received by all members in the form of income from wages and pensions, payments for the social insurance program, employees’ social insurance and benefits for it. Modern international standards on the measurement of income from work are limited to statistics on salaries and household revenues. But it should be mentioned in essays on income inequality that such data does not provide a complete picture of the level of all incomes that employees receive.
Payment for pensions is a form of material security at the expense of the worker.