Economic Inequality And How It Affects Quality Of Life

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.

In Paul Krugman’s essay, “Confronting Inequality,” he discusses various points about how America has developed into quite the divided country over the years. The United States of America has become unequal in terms of annual income, living standards, education and school districts, politics, and social standards, just to name a few. Several matters of combatting the injustice faced by the nation are also mentioned. All of Krugman’s points revolve around one central question, being “why should we care about high and rising inequality?” (Graff, Birkenstein, Durst 561). I believe inequality truly does raise concerning problems within our society, but it also may be a positive thing for our people. Extreme equality could, in turn, result in a communistic government in which those who work into overdrive earn the same titles as those who do not.

Along with globalization market forces has had the greatest impact on income equalities in the United Sates. Thomas Piketty says that “by definition, in all societies, income inequality is the result of adding up these two components: inequality of income from labor and inequality of income from capital. The more unequally distributed each of these two components is, the greater the total inequality ... [a] decisive factor is the relation between these two dimensions of inequality: to what extent do individuals with high income from labor also enjoy high income from capital? Technically speaking, this relation is a statistical correlation, and the greater the correlation, the greater the total inequality, all other things being equal” (Piketty & Goldhammer, 2014, p. 242). In the U.S. the correlation between the two dimensions has become so astonishing that “President Obama called economic inequality “the defining challenge of our time.” But while Americans acknowledge that the gap between the rich and poor has widened over the last decade, very few see it as a serious issue. Just five percent of Americans think that inequality is a major problem in need of attention” (Fitz,

"How Economic Inequality Harms Societies." Richard Wilkinson:. TED Talks, July 2011. Web. 26 Feb. 2015.

This also incorporates the idea that, “economics equates changes in the happiness of a society with changes in its purchasing power” (Layard, ix). In reality this is completely inaccurate, because quantity of things does not determine happiness. Success is merely a aspect of your status and opportunity, highly correlated with education, and employment status. In addition, some countries incorporate cultures that allow them to adapt and form habits of saving, innovation and hard work. Important differences among nations include the way institutions that regulate the economy and govern the way competition occurs. Most income inequality is between countries rather than within them, because money is distributed equally within every country yet the world's income distributed unequally. These dramatic differences in income levels, reflect both massive productive potential of the capitalist economic system and the uneven distribution of the results of the capitalist economic growth process. The growth and distribution are contingent on institutions that manage the processes of production and pattern of international exchange and

There are different opinions towards inequality, some people are accepting of it while others dislike the whole idea of inequality. Is it okay to let the wealthy have more control than the poor? Should their ideas matter more than the non-wealthy? And most importantly should the poor be okay with this, if not what must they do? In “Gospel of Wealth” by Andrew Carnegie and “The Communist Manifesto” by Karl Marx, both Carnegie and Marx expose their thoughts behind inequality and its traits. They both focus and touch upon the poor (proletarians) and the rich (bourgeoisie). They bring up the pros and cons about inequality, capitalism, and communism. Inequality was in Carnegie 's view. In his opinion progress required the processes of competition. Making capitalism an engine of progress. Carnegie believed that there is good to inequality while Marx begs to differ. Marx had his own view on capitalism, he believed that it would eventually result disastrous. Marx believed communism was the best solution to keep both the proletarians and bourgeoisie in an equal place. Both of these socialists have much to say about capitalism and communism and also for economic inequality. They both share different points of view, neither wrong or right. Their opinions are based towards their life experiences and this essay will be noting the differences between they share on inequality, the means of production, and capitalism.

Inequality is not favorable in society. There is inequality in many aspects of our society, such as race, and gender. The main inequality we look at is income inequality in the United States. The one percent of the population control a vast majority of the United States currency. The Gini coefficient has been increasing ever since the Industrial Revolution, a period where education, manufacturing, and economics has shown growth. However, income inequality has increased in the Industrial Revolution. There are many events, and causes that have led to the rise of income equality in the United States.

Stewart Lansley, author of ‘The Cost of Inequality: Why Economic Equality is Essential for Recovery’ speaks very seriously in “The Hourglass Society” article about inequality.

For the past 30 years the “gap” in income received by the rich and the lower class has continuously continued to increase, showing no signs of decrease anytime soon. This gap has mostly affected the middle class, which is made up of mostly African Americans and Hispanics, making America less determined to correct such an issue. Given the circumstances African American’s are the focus of this issue due to the fact they make up majority of the middle class. It is known that modern racism exist within today’s society in various ways, one of which happen to be within the economy. For decades the economy has had its downfalls, however, it’s been facing an issue that it has been hiding from the rest of the nation. The gap that everyone speaks has

High income inequality prevents an economy from growing, so the current status of the wealth gap in the U.S. is dangerous to the future of the U.S. economy. In fact, the average income of the top 10% of the United States population is roughly nine times greater than the average income of the poorest 10% of the population (OECD). This widening wealth gap is a problem of extreme importance and failure to recognize it may lead to social problems such as a rise in crime and overall social unrest. A continuing rise in this wealth gap affects all U.S. citizens as the bottom 99% may lose opportunities in education and be exposed to more crime, and the top 1% may lose consumers as no one will be able to afford their products. Furthermore, due to this rising gap, ordinary children of the masses, who are from the bottom 40%, are being denied to educational opportunities because they cost more money (Ingraham). Regardless if a child is born into a wealthy or poor family, they are still born with the same attributes; however, it is income inequality that creates inequality in educational opportunities for children, which threatens the overall educational status quo of the nation. A major wealth gap in any society is strongly associated with significant problems such as greater poverty levels, more crime, and even poor conditions of health (Partridge and Weinstein).

Inequality is a problem that has had an effect on the United States for many years. Although throughout the years the severity of inequality has fluctuated, it has increased greatly within the past two decades. There are many factors that could have influenced this increase. Some of the factors include technology and deindustrialization.

Economic inequality reigns as a massive divide in the United States of America. Many active policies cause people to occupy an economic level which is meant to benefit those above them. With that said, there have been many efforts taken in hopes of reducing the current levels of economic inequality, but with these efforts, money and wealth will have to be taken from the rich to give to the poorer. This is where the problem lies with wealth inequality – many have to sacrifice for those whom they presume to be unworthy of benefiting from their fortunes. Education, wealth, race, and power all play a role as to why action will not be taken to reduce the current levels of inequality in America.

While theories such as “trickle down economics” support the wealthy creating more wealth for the lower income levels there is more evidence elaborating the benefits of living in a country with higher economic equality. When there are higher levels of economic equality countries enjoy more political stability, better health conditions, and a better outlook on the nation and jointly, life. The following graphic and its

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

“ Some economic inequality is essential to drive growth and progress, rewarding those with talent, hard earned skills and the ambition to innovate and take entrepreneurial risk”(Oxfam, 2014, p1).