Theme: Income distribution and inequality

Theme: Income distribution and inequality

Plan:
1) Problems in income distribution.

2) To study the nature of income, sources and forms of their formation.
3) Income inequality analysis indicators.
The problem of income is perhaps the most complex and controversial issue. It is known that at a certain stage of development, society is divided into different social groups, rich and poor, characterized by significant economic inequality in terms of income. This trend was justified by K. Marx and F. Engels in the "Manifesto of the Communist Party", but according to many modern economists, the conclusion that the rich are getting richer and the poor are getting poorer is not confirmed. However, despite the fact that the standard of living of the majority of the population in developed countries has increased significantly, the uneven distribution of income remains today.

The modern system of distributional relations is based on the market attitude, according to which the results of competitive market processes are fair because they reward the most capable and hardworking. In other words, unequal distribution is fair in favor of those who contribute more to the final result. Here, fairness is evaluated in terms of efficiency. The fairness of the distribution of income in the market depends on the mode of operation of its mechanism. This mechanism is maximal under conditions of perfect competition. The dominance of monopolies distorts the distribution of income in the market. In market conditions, the observance of equal rights, in particular the right to private property, is initially applied to different, "unequal" people. Unequal opportunities related to age, gender, physical and intellectual abilities, property ownership, etc. lead to income inequality. The specified circumstances determine the selection and selection of the topic of this course work.

The nature of income, sources and forms of their formation
The nature and classification of population income
Income, as a rule, means the amount of money received in a certain period of time and intended for the purchase of goods and services for personal consumption. The importance of income in the formation of the standard of living is determined by the fact that the main part of consumer goods and services are sold as goods in the conditions of a developed market economy. Thus, the level of consumption of the population depends primarily on the level of income.
The amount of income is affected by many different factors, often the multifaceted nature of the effect. Among them, socio-political, which determines the direction of the strength of actions and other factors of income formation; demographic, taking into account the dependence of income on gender, age, physical endurance and intellectual ability; research on professional, educational level, qualification and work experience; a situation that determines the amount of income depending on a person's position in society and the hierarchy of officials; socio-economic, this is, in particular, the type and type of activity, employment opportunities, the type of production, the form of ownership of the means of production, working conditions.
In countries with different climatic conditions, geographical factors are of particular importance, because the prices of vital goods and services vary significantly from region to region and, accordingly, mean different incomes.
When it comes to income stratification, it is necessary to take into account important aspects such as the innate abilities of people, which can differ in many ways. some have a unique ability that allows them to get "intellectual rent". At the same time, the activity of a person, the desire to achieve high results in his activity is not important.
It is known that the amount of income depends on differences in property ownership, but the latter can be inherited by individuals, i.e. Income inequality is increased, helping people in this category get better education and, accordingly, better-paid jobs. A set of favorable conditions cannot be denied when looking at income inequality.
There are decile, quintile, and quartile coefficients, which are defined as the ratio of the minimum income of the richest 10, 20, and 25 percent of the population to the maximum income of the poorest 10, 20, and 25 percent, respectively.
The level of inequality in the distribution of income among households can be determined more precisely by constructing an income distribution curve named after M. Lorenz, an American economist. The abscissa in the graph represents the total share of families with a certain income level, and the ordinate represents the total share of total income that goes to the poorest part of families, starting with the lowest income.
If all people have the same income, that is. 1% of the population had 1% of the income, 15% of the population had 15% of the income, then the Lorenz curve corresponds to the line of absolute equality OE with an angle of inflection of 45 °.
The farther the Lorenz curve is from the line of absolute equality, the more uneven is the income distribution. Thus, a dotted curve describes a greater unevenness of income distribution than a solid curve. The ratio of the segment between the bisector OE and the Lorenz curve to the area of ​​the triangle OAE is called the Gini coefficient, named after the Italian economist and statistician C. Gini. If the coefficient is 0, the Lorentz curve coincides with the straight line OE, and income in society is distributed absolutely equally. The Lorentz curve with a coefficient value of 1 is represented by the legs of the OAU triangle, which indicates absolute inequality in the income distribution. In practice, the Gini coefficient never falls to zero or one level, but its value above 0.4 is believed to reflect a high level of social stratification.
The extent of inequality becomes apparent when we look more closely at the distribution of income among households. For this, the ranking method is used: families are divided in order of increasing income and then divided into groups. At the same time, there are: a) quintile groups, in which households are divided into five subgroups, each of which contains 20% of all families (the first quintile group contains 20% of families with the lowest income, the fifth - the highest income is 20 percent); b) decile groups, which are formed in a similar way and divide households into 10 equal subgroups (10% each). The level of social stratification is determined by calculating a number of coefficients.
Income Inequality: Causes and Indicators
Reasons for inequality in income distribution
Income inequality incentivizes "smart" enterprising and motivated people and favors disadvantaged sections of society based on increased incomes. What are the causes of inequality in income distribution?
1. Differences in people's abilities and talents.
2. One of the main causes of income inequality is wealth inequality, which is unequally distributed relative to income. According to S. Fisher, the wealth gap between families in the United States is enormous. 0.05 percent of American families own 35 percent of the value of personal property, the "bottom" property is 90 percent: households own only 30 percent of its total value. If in 1963. the top 1 percent of families owned 32 percent of the nation's wealth, up from 42 percent in 1983. The distribution of national wealth in Great Britain is less equal than in the United States.
The income of the population determines the social status in the society, the level of income of each person depends on the economy of the country where he lives.
Thus, effective redistribution of income should be carried out, first of all, by developing state programs that provide for specific measures to regulate citizens' incomes, fair taxation and improve the system of social protection of citizens. In general, it is recommended to conduct an income policy based on a combination of economic efficiency and social justice in accordance with the specific characteristics of the Russian Federation.
It is no secret that the majority of the population in the regions, especially in the villages, does not have a sufficient source of income. As in any country, we have low-income sections of the population. According to various estimates, they are about 12-15 percent. Here we are not talking about small numbers, but about 4-5 million representatives of our population.
Some people think that this problem can be solved by paying or increasing the amount of social benefits and financial assistance. This is a one-sided approach that does not allow to fully solve the problem.
Reducing poverty means implementing a comprehensive economic and social policy to awaken the spirit of entrepreneurship in the population, to fully realize the inner strength and potential of a person, and to create new jobs.
Therefore, I propose to develop a poverty reduction program together with the World Bank, the United Nations Development Program and other international organizations. In this regard, it is necessary to conduct in-depth studies on the basis of international standards and create a new methodology that includes the concept of poverty, its definition criteria and evaluation methods.
Also, we should gradually implement the positive experience of forming modern entrepreneurship and business skills among the population in 22 rural districts of the Fergana Valley.
It is necessary to give priority to the support of business initiatives related to the solution of social problems in localities, especially the entrepreneurship of young people and women. For this purpose, a wide path will be opened to residents and entrepreneurs, to microfinance services and financial resources, and to public procurement. Through such measures, our people will increase their enthusiasm and confidence to become entrepreneurs, and they will strive to earn more.
The President of the Republic of Uzbekistan, Shavkat Mirziyoyev, also addressed this topic in his address for 2021.
Not everyone can be an entrepreneur. Therefore, it is necessary to systematically work with such people and provide them with a decent job by retraining them for the profession. For these purposes, 700 million dollars will be attracted.
We should fully support entrepreneurs who create new jobs, so to speak, carry them on our shoulders.
The Cabinet of Ministers will be instructed to develop a relevant draft law on the foundations of social entrepreneurship and measures to encourage it within two months. Also, the government should ensure the creation of 500,000 new jobs this year within the framework of state programs and through the development of entrepreneurship.
In this regard, I would like to emphasize one point, business entities and new jobs created in each sector, industry, region and district are the main criterion for evaluating the performance of the leaders of these structures.
During the year, the amount of salaries, pensions, scholarships and allowances of employees of the budget system will be increased by an amount higher than the rate of inflation.
It is necessary to introduce an excellent system of paying social benefits, including expanding the scope of assistance to low-income families, and ensuring targeted spending of budget funds. Also, it is necessary to revise the criteria for awarding allowances and create an open and fair system for determining them, and critically review the participation of the community in this regard. In general, after a resident applies to one office for social benefits, that office must prepare all the documents and find a solution to the problem in one day.
Summary:
Income of the population is wages, income from business activities,
all cash receipts in the form of benefits, pensions, scholarships, interest from property,
income received in the form of dividend, rent, securities, real estate
from the sale of property, agricultural products, crafts, etc
includes income from the provision of various services. Natural
income is taken at the expense of wages and households' own consumption
consists of products produced for
The concept of standard of living of the population is based on their life
It can be defined as the level of providing the material and spiritual blessings necessary for the decay and the satisfaction of people's needs with these blessings. The lower limit of well-being can be determined by such a limit of family income that reproduction of the labor force cannot be ensured at a lower level of income. This level comes out as the minimum level of material security or subsistence level (the beginning of poverty).
Average per capita of all countries in the world
differ sharply from each other with the level of income. These are different countries
indicates the existence of inequality between the income levels of the population.
The social policy of the state consists in the formation of appropriate centralized incomes by stratified taxation and its redistribution among different groups of the population through the budget.
The main direction in the system of measures for social protection of the population
- this is the regular increase of the minimum and average level of income in connection with the liberalization of prices and the increasing level of depreciation of money.
Development of small business and private entrepreneurship in our country
solves the task of forming a class of middle owners. Small business and
private entrepreneurship becomes an important sector that provides employment for the population and becomes its main source of income. Labor demand
the most important of the economic measures to increase is the implementation of structural changes in economic sectors. First of all, this is achieved by developing forms of ownership, increasing labor productivity, creating new jobs, raising material and moral interests (investing in the field).