Share
Explore BrainMass

Efficiency versus Equality

The distribution of income in the US should be more equal. Comment.

Solution Preview

The subject of the Distribution of income in the United States is another name for the tradeoff between equity versus equality. Do we want equality or efficiency? Could we achieve both? The question needs a lot of thoughts and macroeconomics seem to be able to answer some of those.
First, there are some issues of fairness on which almost everyone agrees. By identifying the many different causes of income inequality, we can at least pinpoint those types of inequality that almost all of us would regard as fair and those we would regard as unfair. For example, almost everyone agrees that that income inequality due solely to compensating wage differentials is entirely fair. If one worker must put up with longer hours, a greater risk of death, more unpleasant weather, a greater risk of unemployment, or more years of schooling than another, it is only fair that he or she be paid more. Thus, eliminating compensating wage differentials, which would make income more equal, would also make them less equitable to most of us.

The same holds for some of the inequality in property income. Remember the old fable of the grasshopper, who fiddled all day, and the ant, who prepared for the winter? Although many "well-t-do" Americans have inherited their wealth, many others have acquired ...

Solution Summary

The solution addresses the following question: The subject of the Distribution of income in the United States is another name for the tradeoff between equity versus equality. Do we want equality or efficiency? Could we achieve both? The question needs a lot of thoughts and macroeconomics seem to be able to answer some of those.

$2.19