Inequality and Redistribution

1384 WordsFeb 23, 20185 Pages
Inequality and Redistribution Income inequality in America is higher than in any other industrial nation in the world. Many believe this creates serious problems for both United States citizens and its economy. The inequality difference is continually getting larger and worsening these problems. Over the past three decades America’s economy has seen continuous growth; but this is accompanied with no increase in purchasing power for poor and middle class citizens. On the other hand, incomes of the richest Americans have dramatically increased, which only furthers the gap between social classes. In 2008, the top one percent of Americans earned over 20% of the national income, which is significantly higher than only 50 years ago. Economists use a strategy called the “Gini Coefficient” to measure the relative equality between nations. Since 1980, the Gini Coefficient for the United States has risen from 0.388 to 0.45. This is a very high rating compared to other egalitarian countries, such as most of Europe and Japan, whose ratings are generally in the high 0.2s and low 0.3s. Wealth inequality is even greater than income inequality, however. “The top 1 percent of Americans own forty-four hundred times as much wealth per person as the bottom 40 percent.” This large difference between rich and poor American citizen wealth and income creates numerous problems for the United States. The United States is based on one strong principle belief, democracy. Democracy is supposed to
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