What is income inequality? According to McConnell and Brue, authors of Microeconomics the 14th edition, income inequality is "the unequal distribution of an economy's total income among persons or families." They also point out that some of the causes of income inequality are "differences in ability, education and training, discrimination, tastes, and risks." As a whole we saw these factors very useful in explaining why it exists, but the problem with these is that they are mostly abstract. It is almost impossible to measure someone's tastes and preferences, but it is easy to measure the level of education and the degree of discrimination. Before researching this project we came up with factors that we perceived to be major factors causing income inequality. These factors consist of racism and sexism, free trade and foreign trade, welfare, and taxes. We believed that these factors are the main causes of income inequality. Racism and sexism are presented in the economy in the form of lower wages for equal work. The belief that NAFTA moved jobs north or south of the border. That taxes cause more income inequality than they balance out. Welfare is also believed to be a factor because it may offer better benefits to those on it than working offers them. This would encourage them to stay on the programs instead of getting a job. We took an in depth view of these ideas and formed a hypothesis of what causes income inequality,
             Of the factors that our group pointed out in the above section we saw welfare as being one of the leading causes of income inequality. We originally believed that the programs' benefits offered more of a return than working offered the beneficiaries. So in reality if a person on welfare worked instead, they would be losing more benefits than they would be gaining in income. For Washington the truth is the exact opposite of what we perceived. Before we can examine ...