Business And Income Inequality
Income inequality is the measurement of income distribution that explains the gap between those individual with most income in a given country to those with relatively little income. Income inequality and business relate since the essence of business is always to treat every individual equally and fairly to keep your business functional. Different countries have tried to implement policies that are aimed at favoring the wealthy to ensure that money trickles down to enhance the economy. Other countries have favored the idea that boosting the income of the poor can help expand the economy. All the above methods aimed at trying to reduce the gap in income inequality but boosting poor people’s income has been working on expanding the economy and businesses in a country unlike favoring the wealthy.
Income inequality to the future business Owners
The American next generation business leaders have hard time to consume the word income inequality since they say the slowing growth of middle class added to the rising inequality, increased poverty rates, and reduced economic mobility will greatly affect business in the future. Business owners see the importance of addressing the above four issues earlier to spur the overall economic growth. Business growth benefits when the economy is healthy and without any recession. It is believed that income inequality and reduced economic growth funnel directly into decreased investment in labor skills and weaker consumer demand. This indicates that most businesses are likely to suffer if majorities of the people aren’t able to purchase goods and be able to develop the needed long-term skills to support business. The widening gap between the poor and the rich tends to make income mobility to be flat since most of the rich people will continue to lead cushy lives of luxury.
The growing gap and its effect on Business
Increasing income inequality is in today’s life a challenging issue for countries. In case the income of the rich people continues to increase, there political influences also increases that leads to a suboptimal distribution of resources. Once the rich controls the necessary resources, the poor are denied an equal share in the growth of the economy this leads to the gap widening. The poor having less money will greatly impact various businesses and the general economy since the poor tend to spend their income on basic needs like food, health care, and education. The growing income inequality will negatively impact various businesses and labor producing sectors and the economy as a whole.