Economic And Income Inequality

In the United States, high standard of living is not equally shared with in the Americans. The 1970s and 1990s was period where economic inequality began to grow. Emmanuel Saez, an economics professor at UC Berkeley has been doing a research for the U.S. income inequality. He states that there has been an increase since the 1970s, and has reached levels that have not been seen since 1928. “In 1928, the top 1% of families received 23.9% of all pretax income, while the bottom 90% received 50.7%. But the Depression and World War II dramatically reshaped the nation’s income distribution, by 1944 the top 1%’s share was down to 11.3%, while the bottom 90% were receiving 67.5%, levels that would remain more or less constant for the next three decades. But starting in the mid- to late 1970s, the uppermost percent income share began rising dramatically, while that of the bottom 90% started to fall.”(DeSilver) Ever since then, economic inequality continues to increase, especially in the last three decades.

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

Furthermore, when analyzing the different classes, and the distributions of wealth and income in the United Sates; for instance, the upper, middle, and lower classes – it is an astronomical amount of wealth that the top 1 percent acquire. It is also noted by Johnson & Rhodes (2015), “that income and wage inequality have risen sharply over the last thirty years” (pg. 228). Equally important to this, is how the average change in income is divided in Americas quintiles and the widening gaps. For example, in Table 5.2, while the lowest fifth quintile increased from $11,128 to $11,361 – a difference of $233.00 from years 2006 to 2012; the highest quintile increased from $289,446 to $319,918 – an exponential increase of $30,472 (pg. 229). With income inequalities at this rate, it is difficult for the majority of the United States to experience upward social mobility. Pursuing this further, in a line stated by Johnson and Rhodes (2015), “The wealthiest Americans can live on the dividends from their investments without having to touch the principle or work for a salary” (pg. 230). From this, it is visible to see how society has compartmentalized different levels of functions to keep a so called balance for the greater

Wealth and Income Inequality in America The United States of America was founded upon the ideals of freedom and equal opportunity for all individuals. Many people strive to achieve the American Dream by enhancing their socioeconomic status. Today, many people argue that these rightful values are no longer relevant due to the growing income and wealth disparity between different social classes. Income and wealth are two social issues that are commonly misinterpreted; although the two concepts are related, the overall concepts are a little bit different.

Since the beginning of human history there has always been a power structure; who is to be on top and who is to be in the bottom. So, it comes to no surprise that America has a growing gap between the wealthy and everyone else. The United States is known as a melting pot and a country full of opportunities for all but it is also the place where upper class makes millions in an hour and the lower class only makes minimum wage. United States thrives on promoting everyone is created and treated equally but that happens not to be the case. Polls after polls shows a huge percentage of Americans biggest concern is the income inequality, the rich continue to get richer and the poor continue to get poorer, that it’s not being tribute equally among race and gender. Wealth and income inequality has grown since 1920s like never before and the question lays what is the cause and how can it be fixed.

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.

Nearly 50 years after the United States survived its worst economic crisis, the nation’s class gap widened severely. The percentage of workers represented by unions dropped from 10.8% between 1983 and 2012 (Wiseman). Incomes only grew for the top percent of earners in the country (“A Guide to Statistics on Historical Trends in Income Inequality”). The majority of Americans saw little amounts of

Despite dipping below ten percent between the late 1960’s and early 1970’s, the income gap in the United States has climbed steadily over the last fifty years. From its low point in 1973, the wealthiest Americans’ income share now exceeds even that which they held in 1928, on the eve of the Great Depression. Experts have pointed to several potential culprits, including the underrepresentation of lower- and middle-class citizens in legislatures, the shrinking power of organized labor, the expanding power of organized business, and a tax system that seems to disproportionately favor those at the top at the expense of those on the bottom. These factors vary greatly in level of impact and the feasibility of potential solutions,

In 2013, President Obama asserted that the growing income gap in the United States is a “defining challenge of our time”. Economic inequality consistently ranks amongst the greatest concerns of voters and is the subject of growing national and international attention. As such, explorations of rising inequality are not new. Where the readings are revelatory, however, is in their efforts to expose the fallacy that economic distribution, be it the hyper-concentration of wealth at the top or the existence of poverty at the bottom, is ‘natural’, nothing more than an economic reality caused by ‘inevitable shifts in [the] economy driven by global, universal pressures’ (Hacker & Pierson, 4). Instead, the authors posit that economic inequality is ‘largely a product of political decisions and institutions that generate and sustain a sharply unequal distribution of wealth and resources’ (Williams, 569).

Pundits say that income inequality has been one of the greatest downturns of our country’s growth and development, however a puzzle exists where economics and politics meet that does not make the solution to income inequality easy to find. Political leaders, economists, and bankers all agree that policies have appealed more to the interests of the governing class than those of the ordinary people. The comments surrounding this topic mostly stem from the strong shift of wealth distribution over the last few decades. Figures from the Economic Policy Institute demonstrate that the share of income accumulating by the top 1 percent of the United States increased from 9 percent in 1978 to 26 percent in 2011.

According to the OECD, the term inequality in the opposite of equity can be defined as evenness

1. How do you define economic equality? For example, is economic equality simply making sure everyone has equal income, or is it enough to provide all equal opportunity to earn income?

In the 1770s, when New England had the most equality in terms of social class, the income distribution of American colonists was much more equal on the eve of the American Revolution; then the income inequality rose dramatically in the 1800s, but then collapsed during the Great Depression (Phillips). Now, in the United States, data has shown that, “40% of Americans identify as lower class between 2007 and 2012 and the income of the median American has shrunk by 8%” (Matthews). The data reveals that the middle class is decreasing, while the lower class continues to rise.

Robert Reich’s documentary Inequality for All covers what is called the “defining issue of our time” for what is happening to income and the distribution of wealth within the U.S. Though it has been proposed by innumerable media outlets today that the U.S. economy has been going through a slump, Reich suggests that this depiction has been projected upon us from the income inequality that perpetuates society today due to the top 1%. Though this seems like an audacious statement, Reich reinforces his argument through evidences. The Gross Domestic Product (GDP) and

The economic inequality has existed for many centuries. It has taken a huge role in society, causing a huge racial wealth gap. Throughout the years, the economic inequality has becomes worse instead of improving. The media takes a huge role in the different stereotypes given why people are poor. The main stereotype given to people who are not wealthy is because they are not educated. Not being educated can mean a person isn’t working at a high paying job. The media can be misleading by how it picks the life of the poor. People who are poor are seen as lazy, drug addicts, and welfare cheats. In reality people are being stereotyped for not being wealthy.