Wealth Inequality in U.S.

1988 Words8 Pages
Final Paper
Wealth Inequality in U.S. and Economic Efficiency

Over the last decade, income inequality has become one of the most important issues in the U.S. and a subject of a lot of debate. There is a prevalent idea in the society that the wealth inequality in United States is currently at the highest level in the history after steadily raising for a number of decades. The financial crisis is said to have contributed to this significant gap between the top 1% and everybody else. People view it as an inherently negative thing, and fight hard to promote the equality and income redistribution. This paper examines the causes of inequality; the relationship between wealth inequality and economic growth and the hypothesis on how policy
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According to a 2014 Credit Suisse study, the ratio of wealth to household income is the highest it has been since the Great Depression. (Mark Gongloff, Key Inequality Measure The Highest Since The Great Depression. The Huffington Post.). Based on Inequality for All, the top 1 percent generates more than 20 percent of the country's income, and the 400 wealthiest people in the nation possess more wealth than everybody in the bottom 50 percent. There is a significant correlation between the income inequality and social mobility which reflects the prospects of individuals, families, households, or other categories of people in a society to move through a system of social hierarchy. According to Harvard study, the spatial variation in intergenerational mobility is strongly correlated with five factors: (1) residential segregation, (2) income inequality, (3) school quality, (4) social capital, and (5) family structure. (The Geography of Intergenerational Mobility in the United States, Harvard, June 2014). The inequality problems arise when society lacks equality of opportunity to advance. Economic mobility in U.S. is much lower than in most first world countries. For instance, poor children growing up in countries like Canada and Denmark have a greater chance of moving up the economic ladder than do poor children from the United States. (The Geography of Intergenerational Mobility in the United
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