What is income inequality?

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.

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.