Potential reasons for income inequality in the economy has to do with several aspects. Education has a lot to do with income inequality. Employers are looking at a person’s level of education to determine what pay (non-salary or salaried) they should receive. That’s where the impact comes in to play for income because there is a lot of people who or not determined nor have the personal ability to get an education although it is free. Employers are no longer looking at the amount of experience that you have, but more so what level of education to have obtained. Yes, it’s easy to find a job if you’re are motivated, but that’s not the issue the issue is not receiving the pay that’s even worth working for. Another reason for income in equality
Income inequality has been a major issue in American history. There are many different factors that contribute to inequality. These include education, wealth, discrimination, ability, and monopoly power.
A cause of income inequality could be the jobs that people have. “In the United States, income inequality, or the gap between the rich and everyone else, has been growing markedly… (Income Inequality, para 1).” There have been no signs of income inequality changing for the lower classes, or getting better, therefore, it has become a very concerned issue upon Americans. “America’s top ten percent now average at least nine times as much income as the bottom 90 percent (Income Inequality, para 2).” Many people who have a big dream have jobs that pay minimum wage, which makes it hard. With the rich getting richer, it makes it hard for the lower classes to get a shot at being at the top with them. This also makes it hard to close the gap between the three classes.
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 issue of income inequality in the United States is complicated and does not have a definite answer. Income inequality can be measured in a few different ways. The first measurement for the income inequality in a country is to look at the percentages on households and group them into income categories, called distribution by income category. The second measurement for income inequality is called distribution by quintiles or fifths. This is when you divide the total number of people, households, families into five groups called quintiles to examine the percentage of total before tax income received by each quintile. Each quintile would then be ordered by income and households in the category.
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
This article examines the rampant issue of income inequality that has plagued the United States for decades. From the 1970s onward, the 1% of Americans are accumulating more wealth created in the country, leaving the other 99% to scrounge around for the rest; some of these citizens live below the poverty line and may not know if they have enough money to keep the lights on for another month. Evaluating various other reports under the social interpretation of the social conflict theory, the results from most of these findings support the expansion of the labor union’s bargaining power to protect its workers as well as an overhaul of federal and state laws concerning taxes more likely paid by the upper class of citizens.
Income Inequality is a major problem that has been going on in America for decades. Many people feel that it barely exists today, but those people are very uneducated and don’t really care about the huge problem in front of them the many people that feel that way are highly uneducated, and seem to not really care about which has been gradually increasing instead of decreasing. Unfortunately, there’s not much that can be done, only of course if the poor class of people decide to actually educate themselves and get a higher education. One says poor class, simply because that’s how they’re classified. There are five types of levels that Americans are classified as, and they are: Upper Class, Upper Middle Class, Middle Class, Working Class, Poor. The highest percentage of Americans fall in the Poor department, and it has been that way for decades, and will continue to be that way for decades to come.
In recent years, a growing gap between the wealthy and the middle class has grown, as the wealth of the world has increased significantly, yet only a minority of individuals get to enjoy it. Income inequality has been proven to be detrimental to not only the economy, but to the overall well-being of a nation as it leads to societal upset and can potentially prompt a decline in progression as a nation. Over time, income inequality has led to negative results in the United States, as well as many other nations including Greece. Consequently, the solution to prevent income inequality from deteriorating a nation and prevent economic upset is to ultimately tax those who are wealthier at a higher rate and put said money towards education and healthcare
Income inequality is increasingly becoming a significant concern for many countries around the world. The income difference between the highly-educated, skilled, wealthy class and the poor, low to mid-skilled workers is growing larger and larger. In fact, the incomes of the rich are increasing significantly, while the low skilled workers’ incomes have been declining (The Economist, “Wealth Without Workers”). According to The Economist, real median wages have been decreasing since 2000 in half of the member countries in the Organisation for Economic Co-operation and Development (OECD). In the United States, there was a 4% increase from 1980 to 2012 in the share of national income that was distributed to the top 0.01% (The Economist, “True Progressivism”). Canada is facing a similar problem of rising inequality.
Imagine for a moment that you are a babysitter keeping an eye on two few-month-old babies. Cute, aren’t they? Together they’ve created a perfect friendship in minutes. Nothing is different between the two. The babies are curious, innocent, and a little bit hungry. Your doorbell rings and two woman walk in at your invitation. The mothers smile and briskly trot to their babies, swinging them up into a warm hug. Though the babies have no differences, the women do. One styles her hair in a chic bob while the other wears a messy bun. One dresses head-to-toe in pristine designer outfits; the other wears a tattered Burger King apron. One can pay you today; the other swallows her pride and admits that she doesn’t have the money right now. You two agree on an I.O.U.
The American Dream remains alive and well however due to income inequality it has failed to become a reality for the overwhelming majority. The fact that all politicians today still agree that income inequality is a major problem in the United States, shows that there persists an overwhelming need for better methods than the ones that have been tried in the past. Politicians, in their quest to win elections, emphasize the failure of our economic system to bridge and close the gap between the rich and the poor masses. The implantation, by governments, of various economic theories postulated by the great economic minds
Income inequality has been a major concern around the world, and it mainly links to how economic metrics are distributed among individuals in a country. Economists generally categorise these metrics in wealth, income and consumption. Wilkinson and Picket (2009) showed in their studies that inequality has drawbacks that lead to social problems. This is because income inequality and wealth concentration can hinder or delay long term growth. In 2011, International Monetary Fund economists showed that less income inequality increased the duration of countries’ economic growth spells more than free trade, low government corruption, foreign investment or low foreign debt (Berg and Ostry, 2011).
We all have different opinions of what the American dream consists of. When the economy was stable, most dreams consisted of having a great career, a big house with all the luxuries imaginable. However, having a stable job, and saving for the future is simply what the American dream has become. Some may argue that the American dream is no longer out there because of the income inequality I assure to all those looking for the dream, inequality has always been there and we should not allow anything to stop us from achieving what we want.
Income inequality has been an ongoing issue that has affects many American citizens for decades. Some Americans are more affected by income inequality than other Americans. This is an unfortunate fact, but there seems to be no easy solution and it seems it is getting worse. American citizens are losing hope in the system, and their voices screaming for change that benefits all, are rarely heard.
The weakening of labour market institutions is one key cause of income inequality. The “structural reform paradigm” employed since the 1980s had the undesir¬able effect of reducing the ability of labour market institutions to moderate market inequality. Recent work by the IMF has reconfirmed this (see Figure 6). The research results “confirm that the decline in unionization is strongly asso¬ciated with the rise of income shares at the top” and goes on to say that this “explains about half of the 5 percentage point rise in the top 10 percent income share. Similarly, about half of the increase in the Gini of net income is driven by de-unionization.” (TUAC, 2015)