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What is income inequality?

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Quick Answer

Income inequality refers to a scenario in a society or population where household income is unevenly distributed. About 1 percent of the U.S. population earned 22.46 of income in 2012, for instance.

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The U.S. capitalist economy is set up to promote individual pursuit of financial opportunities. Thus, people who are more successful or fortunate have opportunities to earn substantial incomes. In contrast, a capitalist economy means people with more limited education, resources or motivation earn substantially less. Some people view income inequality as a natural result of an economy that supports innovation. Others believe income inequality allows the rich to get richer and causes the poor to struggle.

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