Stiglitz Business Report

Throughout Robert Reich article Why the Rich Are Getting Richer and the Poor, Poorer, discusses about the growing gap between the upper and lower class in modern society. Reich’s article is certainly an eye opener regarding unemployment, and how it is currently surfacing from the shortage of technology and education. Through the text Reich uses a firm metaphor to describe how the economy is like a boat that constantly moves up and down the current portraying the upper class and working class. This boat however is extremely important because it is a boat we are all currently in and one is sinking faster than the other and that one is rising; here Reich is distinguishing the different types of social classes. However, the rich are yet getting

Paul Krugman, in a recent article has eloquently discussed the issue of unequally distributed income in the United States (Krugman, 2015). He alludes to a number of general economic principles in this article. He talks about how a major misconception about the effect of taxes on income inequality in the United States has been addressed through a recent research carried out by Branko Milanovic and Janet Gornick.

The main concepts of the article are describing the corporate welfare system and how it is responsible for growing economic imbalances between the poor and rich populations. The article elaborated on how we cannot ignore the issue anymore because of the substantial loss that we are facing by letting the gap grow (Huff, 1993). The article also goes into the IRS and how there are tax exemptions and deductions that people qualify for and what is allowed.

Stiglitz identifies dwindling opportunity, monopoly power and tax treatment, and the investments of the government as the effects from manipulating the economy to exclusively benefit the top 1%. The societal impact becomes clear when the author states that the ultimate price is the “erosion of our sense of identity,” which includes “fair play, equality of opportunity, and a sense of community” because a majority of people realize the importance of these topics related to the success of themselves and their country (Stiglitz, “Of the 1%, by the 1%, for the 1%”). The article concludes with the significance of paying attention to common welfare as a “precondition for one’s own ultimate well-being” that the top 1% have a history of failing to grasp before meeting their

“The Economic Policy Institute recently reviwed dozens of studies of what constitutes a “living wage” and came up with an average figure of $30,000 a year for a family of one adult and two children, which amounts to a wage of $14 an hour.” (213). According to Ehrenreich, about 60 percent of American workers earn less than $14 per hour. In all of places where Ehrenreich worked paid seven dollars or less per hour, which means those of people who work in those place cannot even afford to have some essentials services such as health insurance and telephone. Since they cannot even struggle to get out, politicians could takee an action; however, they didn't do any works. “The Democrats are not eager to find flaws in the period of “unprecedented prosperity” they take credit for; the Republicans have lost interest in the poor now that “welfare-as-we-know-it” has ended.” (217). And, they also had a catastrophic error. “In fact, very little is known about the fate of former welfare recipients because the 1996 welfare reform legislation bithely failed to incude any provision for monitoring their postwelfare economic condition.” (217). Congressmen need to read this book to realize the problem, and not satisfy themselves by ignoring failures because they have

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,

. In the Gilded Age the economy was dominated by the wealthy corporations, “And so it went, in industry after industry---shrewd, efficient businessmen building empires, choking out competition, maintaining high prices, keeping wages low, using government subsidies” (Zinn 257). This is seemingly what is happening again in the 21st century; the level of inequality has peaked once more with, “…inadequate wages, poor social mobility, lack of access to universal healthcare and basic social safety nets, limited labor rights and attacks on unions, a tax system that benefits the rich in general and unearned wealth in particular” (Morning's Minion

In “inequality for all”, a documentary presented and narrated by Robert Reich, Reich discusses what is happening in terms of the distribution of income and wealth in the US, why it is happening, and is it a problem. “Inequality for all” is directed by Jacob Kornbluth, it premiered in 2013, and it runs for 90 minutes. Reich studied at the University of Oxford in during the late 1960’s, where he befriended future president Bill Clinton. Subsequently, they kept in touch, and in 1993, when Clinton was elected president, he reached out to Reich, to be secretary of labor. Reich was in office for the following four years, and today he is a professor at the University of California, Berkeley. For about three decades now, Reich announced that out of all developed countries, the US has the most unequal distribution of wealth, and that inequality is getting even greater in the US. In the documentary, the most compelling topics covered by Reich, are the changes that started happening in the late 1970’s, the fact that 42 percent of Americans born into poverty stay poor, and that nowadays, money controls politics.

“One reason to care about inequality is the straightforward matter of living standards. The lions share of the economic growth in America over the past thirty years has gone to a small, wealthy minority…”(Krugman 586).

In Robert Reich documentary “Inequality for All” he makes a compelling discussion about the serious crises that the United States faces due the widening economic gap. He looks to raise awareness of the U.S. economic gap between the rich and poor. According to Reich the widening divide in America is real and growing. Income levels at the middle and labor class is stagnant and are at it’s lowest levels compared to upper class incomes since the beginning of WWII and is growing wider each year. Reich suggests that the economy runs more smoothly when the middle class has jobs with fair wages, when unions are strong, and when middle class workers have some extra money to spend if possible when the government uses the tax policy properly and when it raises the minimum wage regularly to control the income gap between labor and management. In other words Reich argues that economically healthy middle and labor class equality is the foundation of a thriving economy and is necessary to maintaining a sound national infrastructure and educational system within

In the article “Of the 1%, by the 1%, for the 1%” Joseph Stiglitz, a noble prize winning economist, argues that the upper 1% controls about 40% of all wealth in America. This top 1% has taken about a quarter of all income in America, and has seen their income rise about 18% in the past decade. This has made the inequality between classes in the US expand. Eventually, this inequality gap will even hurt the top 1%, because the other 99% will either fight for a bigger piece or just stop working all together. The top 1% can buy anything they need, but their fate realizes on the other 99% to work hard and not fight back. If the 99% stopped working, there would be a simple way to gain back money… that would be to raise taxes on the rich. However, the rich get rich by capital gains, which have a low tax policy. So overall, the upper percent can eventually learn, but a majority of the time it is too little too late.

America is one of the world’s largest and prosperous developed countries in the world, but take a closer look and you realize that the great United States of America has an alarmingly large amount of poverty. Where there once used to be an “American Dream” there now lies the cold hard truth, there is less and less opportunity every day and growing inequality every second. Joseph E. Stiglitz how America has turned into a country that would be unrecognizable to any of the founding fathers. In The Price of InequalityStiglitz visits this problem and searches for the source of the economic inequality that the United States is faced with today. Stiglitz came to the conclusion that America is declining and turning into a society like the one

Two important factors that determine a workers' income, regardless of their class, are their race and gender. Minority groups as well as women are less likely to receive an income they deserve, regardless of the job. They are seen as less educated and less capable of doing certain jobs, and they are restricted in advancing and achieving a more suitable income. Only the top capitalists, white males, are receiving the bulk of the nation's income revenue and all the benefits that come along with it. They are the richest people of the United States and instead of being taxed like everyone else, they are allowed even more lee-way. "There is a solution to this problem that will save small farms and businesses, eliminate the ‘death tax' for all Americans and still preserve the integrity of the federal budget: Tax the net worth of the very richest Americans on a regular basis during their lifetime" (Eitzen & Leedham pg. 40). The already rich continue to earn more and more money with their jobs, and they are not being taxed in proportion to their income. They have gotten away with accumulating more of the nation's wealth, while others struggle to make it in life.

Unfortunately some people do not have the ability to earn a living in a market economy. Others benefit from inherited wealth, hard dedicating work, or owning their business. Governments in market economies inevitably engage in programs that redistribute income, and they often do so with the overt intention of making tax policies. On the other hand, advocates of extensive redistribution disagree and allege that role of government limits the concentration of wealth and maintains a wider diffusion of economic power among households, presently as antitrust laws are designed to maintain competition and a wider diffusion of power and resources among producers. Those who oppose major redistribution programs counter that additional taxes on high-income families decrease the incentives