1.  What is the difference between wealth & Income?  How do you measure wealth?  What are assets & debts?  What does it mean to be wealthy but little income?  What does it mean to have no wealth but have a large income?  24% of the population currently have no assets or negative wealth 7.

2.  Lower Class?  Middle Class?  Upper Class?  In your group determine what income levels determine these classes? Get your Cell Phone Out

3. Average Household Income $50,502 4 in 2012 - Among the Highest in the World (1) Personal Income Category (2) Percentage of All Households in this Category Under $14,999 $15,000 - $24,999 $25,000 - $34,999 $35,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 and Above Distribution of U.S. Income by Households, 2009 5 8.7 9.1 10 13.8 19.4 13.5 25.5 100.0 Source: Bureau of the Census

4. (1) Quintile (2) Percentage of Total Income Lowest 20% Second 20% Third 20% Fourth 20% Highest 20% Total 3.4 8.7 14.7 22.2 50.1 100.0 (3) Upper Income Limit $20,453 38,550 61,801 100,000 No Limit

5. The average wealth of the top 1%($16.4 million) 1 Median Net Worth $77,300 Mean Net Worth $498,000 2010 3

6.  Definition of Poverty  Single in 2012 was $11,712  Family of 4 was $23,201  Family of 6 was $32,181  46.2 Million 2011 from 43.6 Americans 2009  Poverty Rate 15% up from 2008 13.2%  Income Record U.S Poverty Holds as Inequality Grows in the US Income Record U.S Poverty Holds as Inequality Grows in the US

7. Source: Bureau of the Census  Ability  Education and Training  Discrimination  Preferences and Risks  Unequal Distribution of Wealth  Market Power  Luck, Connections, and Misfortune Get Cell Phones Out

8. Income Inequality Over Time  Rising Income Inequality Since 1970  Causes of Growing Inequality  Greater Demand for Highly Skilled Workers  Demographic Changes  International Trade, Immigration, and Decline in Unionism

9.  Income distribution is a by-product of capitalism  Individual’s earnings are related to their productivity  The value income has on society encourages innovation and entrepreneurship  Innovation and entrepreneurship are positively correlated to economic growth  Redistribution of wealth increases the cost of “ I & E” which could slow economic growth  Income levels change over time  Should policy be directed towards reducing poverty?  How?

10. 1. http://money.cnn.com/2012/09/11/news/econo my/wealth-net-worth/index.html http://money.cnn.com/2012/09/11/news/econo my/wealth-net-worth/index.html 2. http://www.fas.org/sgp/crs/misc/RL33433.pdf http://www.fas.org/sgp/crs/misc/RL33433.pdf 3. http://www.fas.org/sgp/crs/misc/RL33433.pdf http://www.fas.org/sgp/crs/misc/RL33433.pdf 4. http://www.deptofnumbers.com/income/us/ http://www.deptofnumbers.com/income/us/ 5. http://www.census.gov/compendia/statab/2012 /tables/12s0696.pdf http://www.census.gov/compendia/statab/2012 /tables/12s0696.pdf 6. http://www.pewsocialtrends.org/2012/08/22/th e-lost-decade-of-the-middle-class/1/ http://www.pewsocialtrends.org/2012/08/22/th e-lost-decade-of-the-middle-class/1/ 7. http://www.epi.org/blog/inequality-exhibit- wal-mart-wealth-american/