Essay on wealth inequality in america

1518 Words Feb 24th, 2015 7 Pages
Trevyn Maruyama
Suzuki 6
Closing the Income Gap
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
…show more content…
Sure stocks went down and business went belly up, but it was the workers and not the CEOs that took the fall. When business and corporations were hit by the recession, what would be the most effective way of minimizing their cost? By cutting their worker’s pay, even the CEO’s. However, the CEO’s pay cut could not nearly match the cuts of all the companies’ workers so the income gap grew even wider. There are many other factors that can be credited as sources of the wealth gap but the most important question remains, how can it be fixed?
Combating the wealth gap is tricky business and because the income gap is so wide, it would require more than two presidential terms or one straight forward policy to fix it. Income inequality and economic growth have a positive correlation meaning the economy cannot maximize its growth potential if income inequality is high, so there are two ways to approach this issue; one being from the economy and business side to increase economic growth and hopefully stabilize income inequality and two being to tackle the wealth gap directly to promote economic expansion. The latter would tackle the problem head on but would require more work while the first option is not a guarantee fix and could make the problem even worse. The only sure fix would be to close the income gap directly to promote economic wellbeing. Two options that could be explored to do so would be; one: use government intervention to further shape market forces
Open Document