Causes Of Wealth Inequality

Now more than in recent past is economic and wealth inequality a crucial issue in

In today’s capitalist economy, where economic transactions and business in general is centered on self-interest, there is a natural tendency for some people to make more than others. That is the basis for the “American Dream,” where people, if they worked hard, could make money proportional to their effort. However, what happens when this natural occurrence grows disproportional in its allocation of wealth within a society? The resulting issue becomes income inequality. Where a small portion of the population, own the majority of the wealth and the majority of the population own only a fraction of what the rich own. This prominent issue has always been the subject of social tension

From 1938-1969, in America was in a period called the great compression, a time where the difference between the richest and poorest Americans was very small and economic growth was explosive. Due to past and current economic policies and events, income inequality has exploded in America, which is why in 2015 America had the highest level of wealth inequality in the world at 80.56 gini[1] . In the future this inequality will slow down economic growth, increase debt for middle income Americans, make America less democratic, and reduce economic mobility. This problem, however, does have solutions and this paper will lay out some of the solutions and the effect they will have on the economy, but first I will explain the history of income inequality in the US.

The land of freedom, the United States, is the Promised Land for all. Its citizen can be much as prosperous as they want. Nonetheless, a phenomenon has occurred gradually that has changed the economy, social levels, income, and wealth of all Americans. This is called inequality. Inequality has become a social problem since people has not raised their voice take advantage of voting, large corporations as CEOs who take instead of give.

There is no doubt that wealth inequality in America has been escalating quickly; the portion of total income earned by the top one percent has doubled since the beginning of the 1970’s. The wealthy are the main beneficiaries

Americans today live in a distinctly unequal society. Inequality is now wider than it used to be in the last century, and the division in income, wages, and wealth are broader than they are in other developed economies of the world. Wealth inequality is the imbalance of wealth or income within a society, and it is one of the most vital economic challenge the US is facing today because the distribution of wealth is more dispersed, making the inequality in wealth distribution at its highest. While the matter has been discussed for many years, the actual income disparity in the U.S. has heightened and is now verging on an extreme gap that portends to impede long-term economic growth. The huge gap between the wealthy and poor is squeezing the U.S. economy, the wealth gap threatens economic growth by diminishing social mobility and producing a less-educated workforce who are not able to compete in the global economy. unrestrained level of income inequality causes political pressures, it discourages trade, investment, and hiring. The present level of income inequality in the U.S. is shrinking GDP growth, and the world's largest economy is struggling to recover from the Great Recession.

The Gilded Age was named by Mark Twain. What he meant by this was that the time period was glittering on the surface, but corrupt underneath. The name suits the time period well; the Gilded Age was a time of economic growth, industrial revolution and wealth, yet beneath the surface of all this the middle and lower classes suffered greatly. The big corporations and the small number of wealthy elites held most of the country’s wealth and the poor were left with barely anything. In other words, in the Gilded Age, the wealthy became wealthier and the poor became poorer.

The highest earning fifth of U.S. families earned 59.1% of all income, while the richest earned 88.9% of all wealth. A big gap between the rich and poor is often associated with low social mobility, which contradicts the American ideal of equal opportunity. Levels of income inequality are higher than they have been in almost a century, the top one percent has a share of the national income of over 20 percent (Wilhelm). There are a variety of factors that influence income inequality, a few of which will be discussed in this paper. Rising income inequality is caused by differences in life expectancy, rapidly increases in the incomes of the top 5 percent, social trends, and shifts in the global economy.

Income inequality is the defining issue in this country today; income inequality is an economic danger in the United States, increasing and becoming permanent, reducing social mobility in the U.S. The income and gap between the wealthy is produced by the number one reason for the low and slow economy. Corporations and the top 1 % are hurting the economy and do not seem to comprehend that the flow of wealth is what gives them the chance to make more. Corporations should be hiring more to get more into the flow so that the economy can come back to

The United States has long been a world leader in many areas such as industry, agriculture, science, education and health care. From rural communities to the largest cities, prosperity abounded in these fields. The middle class enjoyed much of the success as families were able to fulfill many of the aspirations that made up the American dream. Unfortunately growth in many of these areas has slowed along with the income families used to earn. The reliable and dependent income of the middle class has long been fading and along with its social norms. The effects of the economic inequality described in the article “Income Inequality is Costing the U.S. on Social Issues” by Eduardo Porter, are now becoming clear that society can longer hold itself

Capitalism has been the central force behind the growth of the United States’ progressive economy. Within such advanced economic system the chances of economic disparity are significantly high. In fact, over the past three decades there has being a steady increase in unequal wealth distribution among the economic classes. To sustain the current unequal wealth distribution among the classes of the American population, there are numerous factors that influence and shape this trend. For some members of the population it is alarmingly disturbing to know that recent statistics have shown that, “In the US [alone] the wealthiest 1% of its population owns more than the bottom 95 %” (Gutman). As for the difference in economic wealth, it resulted

In current times we often observe that many members of our society receive less than other members regardless of whether they are no less deserving. In contrast, there are some who have ownership over assets and earn income that they may not be deserving of. The distributive balance is upset and wealth distribution today can thus be seen as a social injustice. This injustice that is becoming more noticeable as people start to become aware of the facts, as we can see through the start of the occupy wall street movements that, first started on wall street in America, have spread to other countries (one of which being Australia). As a consequence of how wealth is habitually distributed and the way in

Wealthier individuals often have more power than the poor and are sometimes even able to maintain their wealth at the cost of the poor. Inequality of income is often one of the most significant reasons for the disparity within classes socially and one of the most important reasons that poverty is often intergenerational. Particularly in this tumultuous political time of divisiveness, people who are willing and able to make changes to the status quo in meaningful ways are of the utmost importance. Closing the gap in wealth is one of the most essential ways to ensure that inequality is addressed and that the other social issues surrounding this gap will be lessened and lessened until it hopefully eventually disappears. Change-makers are more important than ever and those groups and nations as well as individuals with power that are willing to be honest with themselves and

Currently, the wealthiest 1% of people in the world control 50% of the world’s wealth. As globalization enables corporations to profit off of more people, advancements in technology displaces workers, and many governments continue to ignore the issue, income inequality will only worsen in the coming decades. If the global community allows the severity of income inequality to increase, revolt will become more likely than significant philanthropic action. Preventing income inequality from worsening globally is no easy task. After all, those who control the world’s wealth will do everything they can to keep it.

Income inequality is a phenomenon that is undeniably real in our current world, and more specifically, the present United States. Canon describes how the gap between the elite and the poor has been consistently growing for many years and continues to widen (189). Whether the differences between the top and the bottom are a threat to current society is another story. Does income inequality undermine a democracy? Ray Williams argues that societies are strongest when they have a higher rate of equality while George Will challenges that inequality is the very basis of what make democratic processes. A. Barton Hinkle takes a Libertarian approach to the idea that inequality is threatening to democracy and how it can be fixed. Some threats that each article addressed were economic impacts, civility, and fairness. Overall, there is a definite need to evaluate whether the United States democracy is being threatened due to the continuous rise of the elites and the fall of the working class.