INCOME DISTRIBUTION AND PUBLIC POLICY EXAM

INCOME DISTRIBUTION AND PUBLIC POLICY: AN

EXAMINATION OF CONFLICTING POSITIONS

Income distribution refers to the proportional share of economic benefits received by the different segments comprising an 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 & 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 & Piven, 1984; Fuchs, 1986), and tax planners are interested in income distribution according to population-income quintiles (Lundberg & 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 (Birnbaum & Rogers, 1989).

In the early-1990s, the conflicting opinions related to income distribution in the American society are generally represented by the so-called conservative, liberal, and radical positions (Carson, 1991). Each of these positions--conservative, liberal, and radical--are described in this Election.

The conservative position holds that income differentials in the American

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primary labor market. While radicals 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 & 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 & Hebert, 1991). About one in every seven persons in the United States is poor. This ratio increases to just under one in five,

Category: Government - I