History Of Income Inequality During The Gilded Age Essay

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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 presidents during the gilded age embrace laissez-faire economic policies and refusal to regulate the banking sector, allowed for large amounts of investment that led to the stock market increasing in value rapidly and an environment that fostered technological advancements led to an age of economic prosperity, that was especially beneficial for all Americans especially the wealthy.[2] However, the rampant levels of income inequality and relatively slow wage growth at the time made it hard for working and middle class people to buy the amount of new technology at the rate it was being produced, thus leading to insufficient demand for products that were heavily invested in which created a bubble in the stock market.[3]

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