Why the Rich Are Getting Richer and the Poor, Poorer

James Madison once stated inequality of the rich and poor predicament to be “evil” and believed that the government should avoid an “immoderate, and especially unmerited, accumulation of riches” (Johnston, 2016). As one of the founding fathers of our nation, James Madison had a concern about the separation between the rich and the poor. He felt the government should do what it could to avoid the separation, which one can infer that he meant for the government to tax the rich by a greater percentage, thus reducing the financial burden on the poor. A rift has always been present between the rich and the poor throughout history. Depending upon the job, the working class may or may not make enough to support a family. At this point, the

There are several essential differences in Reich’s and Murray’s points of view. According to Reich, problems in our societies are caused by poor structures. He argues that increasing of wealth in the society works against the middle class since it forces them to be poor. He talks of keeping a tier of classes which includes the middle and rich class of which if not the middle class will not be able to sustain the economy. Reich describes the great depression of 1929 and explains that the major cause was due to the disparity

In today’s capitalist economy, where economic transactions and business in general is centered on self-interest, there is a natural tendency for some people to make more than others. That is the basis for the “American Dream,” where people, if they worked hard, could make money proportional to their effort. However, what happens when this natural occurrence grows disproportional in its allocation of wealth within a society? The resulting issue becomes income inequality. Where a small portion of the population, own the majority of the wealth and the majority of the population own only a fraction of what the rich own. This prominent issue has always been the subject of social tension

The unemployment rate skyrocketed from 5.3% in 1929 to 37.6% in 1933 (Document 4). Many families who were middle class dropped to lower class status. Many were living paycheck to paycheck to support themselves and their families. But there was also a small percent of Americans whose lives didn’t change because of this crash, maybe even improved. This was the small 2% of the high class Americans who were able to afford luxury items.

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.

Furthermore, when analyzing the different classes, and the distributions of wealth and income in the United Sates; for instance, the upper, middle, and lower classes – it is an astronomical amount of wealth that the top 1 percent acquire. It is also noted by Johnson & Rhodes (2015), “that income and wage inequality have risen sharply over the last thirty years” (pg. 228). Equally important to this, is how the average change in income is divided in Americas quintiles and the widening gaps. For example, in Table 5.2, while the lowest fifth quintile increased from $11,128 to $11,361 – a difference of $233.00 from years 2006 to 2012; the highest quintile increased from $289,446 to $319,918 – an exponential increase of $30,472 (pg. 229). With income inequalities at this rate, it is difficult for the majority of the United States to experience upward social mobility. Pursuing this further, in a line stated by Johnson and Rhodes (2015), “The wealthiest Americans can live on the dividends from their investments without having to touch the principle or work for a salary” (pg. 230). From this, it is visible to see how society has compartmentalized different levels of functions to keep a so called balance for the greater

This time saw much prosperity for certain areas, such as the stock market. Investors were receiving astonishingly high returns on stocks and were seeing their incomes skyrocket. Overall, during the 1980s real GDP per capita increased by 23% and the value of the stock market almost tripled. However the economic choices Reagan made—transferring the weight of taxes from the rich to the poor—had unfairly redistributed the wealth in the nation. Along with the great prosperity came the equal suffering on the part of the lower class who felt the pains of Reagan’s policies. The wealthiest ⅕ of Americans’ income soared by a rate of 14%, while the poorest ⅕ of Americans’ income declined by 24%, widening the gap between the social classes.

Within the United States, there is an unequal collection and distribution of resources. The current unequal or socially unjust tax system is a direct contrast to the social justice theories of John Rawls. The taxation discrepancy has ramifications on many important aspects of our society, such as health care, employment, old age security, and education. These issues affect everyone in our society, regardless of age, race, gender, or sexual orientation. Thorough more equal taxation, we have the potential to create a more society as a whole.

The difference of income and workers conditions has been a timeless conflict present throughout history of the United States. In the past workers were faced with deadly work conditions and around the clock hours for little pay. These unjust conditions dramatically increased during the Industrial Revolutions that the United States experienced in the nineteenth century. The latter period of industrialization produced the organization of the first labor unions in the Country, namely the Knights of Labor established in 1869 and the American Federation of Labor established in 1886. In present day countless unions exist, and are a lot less needed than they were in the early industrial days of the United States (Brinkley, 2012).

The film “Inequality for All” discusses the declining wage-earnings of the American middle class by former labor secretary under President Bill Clinton, Robert Reich. Reich presents economic information in such a complex way for everybody to understand and become engaged in the situation we are going through as a country. Reich was first introduced to Bill Clinton during a scholarship cruise in 1968. Reich became seasick on the cruise and Clinton was kind enough to bring Reich a cup of soup and that’s how it all began. After working under Clinton for several years, Reich became an economics professor in Berkley University.

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.

In the book by Jacobus, A World of Ideas, Robert Reich writes the article, “Why the Rich are Getting Richer and the Poor, Poorer”, and he uses a metaphor to describe the three economic groups that are now in different boats. He compares how the routine producers’ boats and the in-person servers boats are sinking while the symbolic analyst is rising. He also discusses how immigration, and technology competes for the job of routine producers and in-person servers while the symbolic analysts are in such great demands. Robert Reich is correct about the symbolic analyst have the potential to become wealthy and it is expected for them to have high level education and job experience: for example, being a student is considered as an in-person server but taking high education, such as nursing, will make them be identified as a symbolic analyst.

In the book by Jacobus, A World of Ideas, Robert Reich writes the article, “Why the Rich are Getting Richer and the Poor, Poorer”, and he uses a metaphor to describe the three economic groups that are now in different boats. He compares how the routine producers’ boats and the in-person servers boats are sinking while the symbolic analyst is rising. He also discusses how immigration, and technology competes for the job of routine producers and in-person servers while the symbolic analysts are in such great demands. Robert Reich is correct about the symbolic analyst have the potential to become wealthy and it is expected for them to have high level education and job experience: for example, being a student is considered as an in-person servers but taking high education, such as nursing, will make them be identified as a symbolic analyst.

While ineffective at diverting class conflict, the Nazis had successfully quelled unemployment. But they did not do it alone. Before the government was overthrown, the Weimar Republic had already taken steps to relieve the unemployment issue. Workers had paid into an unemployment insurance fund. In 1932, the Weimar Republic had used those funds to create 250,000 jobs (83). Despite this fact, the Nazis’ demand for armaments was the primary catalyst for recovery from unemployment. In itself, recovery from unemployment was not really harm workers. After all, it is better to be underemployed than unemployed.

In recent times we have seen the income distribution in many developed nations expand, meaning that the gap between rich and poor has grown. Coupled with this is the resultant degradation of economic and social mobility. This serves to show that they there is a tendency for those that are poor, to remain poor. There are a number of causal factors that seemingly predicate this fate of a poverty cycle. The issues that contribute to this range from the education and wellbeing of the individual, societal influences and values, their spending habits, their living conditions as well as their ability to access funding as a means of fuelling entrepreneurial endeavours.