ABSTRACT
A rise or a fall in the income of each strata of society has a different impact on effective consumer demand and saving. In short, a rise in social security transfers are the most likely to raise the demand for consumer goods at the cost of savings, while wage increases at the middle level of earnings. When the economy becomes too far removed from perfect competition, then without state intervention to redistribute the national income in favor of the lower income groups, unemployment is risen continually. The question of employment and of income distribution between countries, and between various strata of society in the diverse countries, was simply thought of no consequence. The economics establishment macroeconomic theories assumes that rising productivity equally benefits all strata of society in proportion to their levels of income and ignores the growing discrepancy between the earnings of unskilled and skilled labour.
