[This project is taken mostly from the North Carolina School of Math and Science, as rewritten by Sam Shah]
The distribution of income in our society is a concept of ongoing interest to economists, politicians, and public policy analysts. Here is a definition: If a country had perfect equity in income distribution, it would mean every single person in the country made the exact same amount of money. Note that “equity” here does not mean “fair” or “good;” it literally means “equal.”
In a capitalistic society such as the US, perfect equity in income distribution is neither possible nor desired. There would be no incentive to develop new products if you weren’t able to capitalize on your invention. However, there is also a limit to how much of the total income should be controlled by a small group.
Some suggest that inequity in income distribution is playing an important role in unrest in Tunisia, Egypt, Yemen, and Bahrain. In the US, are the “rich getting richer, and the poor getting poorer” and is the “middle class disappearing” as some politicians suggest? And if so, how could you tell?
To quantify distribution of income in a country, economists consider the percent of the country’s total income that is earned by certain groups of the population. To understand how this is done, we will consider a very small country consisting of the individuals with the following jobs and salaries. Follow the steps outlined to analyze the income inequality of this “country.”
Administrative Support
$28,369
Public Relations Specialist
$39,913
President of the Country
$400,000
Advertising
$40,424
Mail Carrier
$36,619
CEO
$100,271
Electrical Engineer
$62,201
Congressman
$150,000
Secretary
$23,311
Teacher
$33,123
Pediatrician
$113,510
Governor
$110,346
Head Nurse
$48,000
Farm Worker
$7,500
Drafter
$37,500
College Basketball Coach
$260,000
Mechanic
$29,521
Microbiologist
$55,411
Firefighter
$27,976
Forensic Science Technician
$32,864
Cashier
$15,184
Librarian
$42,120
Hairdresser
$22,373
Aircraft Mechanic
$42,370
Task A: Explore the data by breaking it into quartiles. Follow the steps below.
1. Write out all the incomes in the table below, in order from smallest (1) to largest (25).
First Quartile
(0-25%)
Second Quartile
(25-50%)
Third Quartile
(50-75%)
Fourth Quartile
(75-100%)
1.
7.
13.
19.
2.
8.
14.
20.
3.
9.
15.
21.
4.
10.
16.
22.
5.
11.
17.
23.
6.
12.
18.
24.
2a. Find the total income for each quartile of the population.
First Quartile
(0-25%)
Second Quartile
(25-50%)
Third Quartile
(50-75%)
Fourth Quartile
(75-100%)
b. Find the total income for everyone put together (hint: a quick method is to add up your answers from #2):
Task B: Make two different displays of this data.
3. Make a pie chart (circle graph) which shows each quartile’s percentage of the total income as a wedge. Do this with paper and pencil (not technology). You are welcome to print out a circle to write on or else use something circular (such as a water bottle) and trace it. The percentages of each quartile’s part of total income should be approximately the same as the percentage of the entire circle. After you make your pie chart take a picture and post it in this document.
4. Make a box and whisker plot of this data. Again, do this with paper and pencil (not technology), take a picture, and post it in this document.
Task C: Analyze the data and form an argument.
5. Using your data displays, make an argument about the income inequality in this country. Do not state facts as arguments. For example, saying that 25% of the country makes less than a certain income number is not an argument, but rather a fact. An argument is your opinion on something but then use a fact to back up your argument. For example, I could say that Exam 1 in a fictitious class was too easy because the median score was 89%. The argument is that the exam is too easy and the fact was that the median score was 89%.