INCOME DISTRIBUTION AND PUBLIC POLICY

INCOME DISTRIBUTION AND PUBLIC POLICY: ANEXAMINATION OF CONFLICTING POSITIONS

Income distribution refers to the proportional share of economic benefits received by the different segments comprising and economy. The definition of segments tends to shift, based on the perspective of the examination, and the composition of segments overlap as the perspective changes. Economists often distinguish between the owners of capital and labor in considerations of income distribution (Ekelund and Hebert, 1991), while social activists are more apt to be concerned with the distribution of income between the wealthy and the poor (Nasar, 1986), white and nonwhite (Shim, 1983), and male and female (Ehrenreich and Piven, 1984; Fuchs, 1986), and tax planners are interested in income distribution according to populationincome quintiles (Lundberg and Startz, 1983). The development of public policy regarding income distribution must accord consideration to each of the various perspectives on the issue, while simultaneously, addressing the underlying political imperatives (Brinbaum and Rogers, 1989).

In the early1990s, the conflicting opinions related to income distribution in the American society are generally represented by the socalled conservative, liberal, and radical positions (Carson, 1991). Each of these positions conservative, liberal, and radicalare described in this section.

The conservative position holds that income differentials in the America

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ls tend to support social assistance programs, they also contend that most such programs in the United States tend to provide greater benefits for the well off than they do for the poor. The radicals also support income equalization polices, and an end to all tax benefits. Discussion The mercantilists thought that the maintenance of wages at subsistence levels was essential, if the industry of the poor was to be maintained (Ekelund and Hebert, 1991). Higher wage levels were considered by the mercantilists to be harmful to both the poor and the economy. By contrast, of course, the mercantilists did not think that high income levels were in any way harmful to the wealthy owners of capital. The contemporary conservative position on income distribution appears to fully accept the mercantilist concept that wage levels should be high enough to develop an incentive in the workers for luxury goods, but that they should never be high enough to permit them to actually obtain such goods. In this way, maximum effort would continue to be extracted from the workers (Ekelund and Hebert, 1991). About one in every seven persons in the United States is poor. This ratio increases to just under one in five, for unrelated individuals, and dec

Category: Government - I