Firstly, real disposable income is the main influence of consumer expenditure. Richer households tend to spend more than poorer ones. This is important because the amount of real disposable income will dramatically effect the AD as if the amount is low then barely any money will be spent. Secondly, wealth is another factor. The richer people are the higher their APC.
There is a failure to realise that long term better economic welfare also means general higher standards of living, as people have enough money to buy everything they need and some of what they want, competition is rife so drives quality up and prices down, and the government are able to take in more taxes from firms who are much healthier financially. This mass employment may lead to more jobs, but the workers themselves or the way they’re used is hugely inefficient. Another reason that labour production in the UK is so low is the lack of competition. There is a strong body of evidence that competition enhances productivity. So, with a lack of one there is a lack of the other.
Saving for retirement, childcare, and health insurance are all consumption choices that are becoming monopolized by the aspirational class (69). These choices are often necessary in order to ensure financial stability not only for yourself, but for children as well. By making these choices less accessible, the aspirational class has not only managed to increase wealth inequity but make it nearly impossible for people to better their social status (70). When bettering your life is behind a barrier of cost and knowledge, it can be difficult to acknowledge it as an option. If the masses are not aware of the importance of saving for retirement, or if they don't have the means or the time to sign their kid up for an early childhood development program, or even if they just cannot afford health insurance this year, it makes it more difficult for them to ensure the wellbeing of their future selves and their children.
On the one hand, there is a widely spread belief that the rising wealth and higher level of income can make people happier and more content with their life. On the other hand, there is the opposite view which indicates to the lack of the interdependence between wealth and happiness. According to this view, the rising wealth does not make people any happier and, what is more, the growing incomes of people can even evoke certain anxiety and result in the growing dissatisfaction of people. In order to find out the true effect of the rising wealth on the psychological state of people, their happiness and content, several researches were conducted. In this respect, it is possible to refer to the research of Richard Easterlin (1995), who attempted to reveal the impact of wealth and rising incomes on happiness of people.
Many tend to associate money with power while others may associate it as a cure for their problems. Even though having money has its good side, there are things that having a lot of money can’t provide for you such as happiness and freedom. In the article Buying Happiness: The Depressing Reality of Materialism, Dodson states “the assumption of course is that people who have a high standard of living, with the requisite happy family and abundant material goods, should be happy” . But in reality all the money in the world doesn’t equal up to love, being rich doesn’t teach life skills, and contrary to popular belief money doesn’t alleviate all problems. People know that being very wealthy and having all the amenities of a rich person, such as fancy cars, expensive clothes, and a cottage overseas are all things that may very well attract the opposite sex.
With inflation comes rising cost and lower income families’ resulting in higher numbers of welfare recipients. In the United States the income distribution arrangement is extremely unusual from that of a third world nation, whereas, a small number of families may be very affluent while a majority of families are very deprived. Most distressing is the modification in income distribution. In our society, the underprivileged do not profit from the increased prosperity of our country. Low income families and high income families consist of an extensive income difference.
President Franklin Roosevelt also said in one of his speeches that, you dont have to be rich to be happy in life, happiness in life comes from accomplishment. I think that’s excatly correct what President pointed out in his speech, because you can be rich and depressed or not as wealthy and happy. Money is not what brings happinessand succes into your life, some poor people can be happier and more thankful for what they already have than rich people being unhappy and unthankful. Also, we might fear of not being as successful and wealthy as others in life. You might whatch as other finish high school and get their diploma and are already in the most rich universitie in your town and you are just afraid to pick up your dream of being in their place too.
A married couple could divide those responsibilities and schedule their work hours so that the kids hardly spend time alone. It will be easier to guide them in a positive direction. Poverty is a major factor that negatively affects the households. Both the parents and the kids will have a much more stressful life and that stress will reflect upon their performance at work and at school. An education costs money and a single parent with only one source of income plus all the other payments will definitely cause problems.
Children of families that receive government assistance are more likely to have children as teenagers and are in turn are more likely to receive more government assistance because they are not financially stable. The families can’t afford the people they already have in their family, so having more children interferes with their current children’s rights, tax payers’ rights, and the rights of future children brought into this socioeconomic class. It takes away the children’s right to quality experiences and proper parenting. Proper parenting is in no way saying that these people are bad parents, however, they are not setting a good example if they are not thinking about the financial well-being of their family. These government costs could be greatly reduced by distributing birth control to all men and women at no cost to them.
Arundhati Roy’s text “Excerpts from War Talk” and “Why the Rich are Getting Richer and the Poor Poorer” by Robert Reich are two texts explaining the major reasons of why in todays society rich people get richer while poor become poorer. Unfortunately, the society is very unfair. There is a system in place that is controlled by a handful of extremely wealthy people, who often were luckily born into the right families and never worked their way to the top. These people in power positions have the game rigged to continue to benefit them and to protect their heritage. Your future wealth is no longer depending on how hard you work; there are hardworking intelligent people and hard working less intelligent people in all groups of society.