Income Inequality

Income inequality describes the uneven distribution of economic resources among a population in exchange for their labor or use of capital (Morris & Western, 1999). The recent rise of income inequality has been considered a global concern for the long-term sustainability of the global market capitalism by sociologists, economists, political scientists, psychologists, and health scientists; however, the relationship between income inequality and business practice has received little attention in the field of management (Beal & Astakhova, 2015). The characteristics of nations’ economics and political histories are identified as the two key factors for generating income disparities across groups and locations (Clark et al., 2018). Although a …show more content…
Now the question is at what level is this payment fair and reasonable? We may argue that defining a CEO’s compensation is an internal decision made within a company but we should not forget that the consequences of this decision affect not only the company’s business practice but also external society (Beal & Astakhova, …show more content…
I do not think that skills, dedication, and job difficulty can justify a CEO’s high income because these criteria are required for any high leadership position, especially in military and medical fields where rigorous long-term training and experiences are often used to validate the credentials of the leader. The success of the company can be used as a measurable factor for justifying a CEO’s income; however, the success of a company depends on the hard work of a team in which the CEO is only one of the key players. Therefore, an unfair distribution of the profit among the team players can confront the standards of morality and ethics in the workplace by acting against the distributive justices (Velasquez et al., 1990). The social and psychological effects of the income inequality are another issue which needs to be seriously considered. I think this gap divides people into different economic levels which do not match to the existing standards. For example, a middle-class household in the U.S. has incomes ranging between $30,000 and $100,000 for families of three and often is used to define low- and high-income households (Alhanati, 2017). I think we need new standards and definitions to categorize high-income households and it must be a difference between the taxing a family with lower limit higher income e.g. $200,000 and a CEO who earns over $50

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