The current level of income inequality in the United States contradicts the national
idea of the United States as a "country of opportunity."
This issue has turned America from a nation of opportunity to a place of poverty and dissatisfaction.
The fact is that 20% of the children live in poverty in the "Richest Country on Earth,
the United States."
According to one survey in 2018, 1 child out of every 6 children in America lives in Poverty.
Nearly 85% of all wealth in the United States is owned by the richest 8% of the population,
leaving the rest 92 percent miserably attempting to find a way to survive on the remaining
15%.
This high percentage of Wealth inequality should be intolerable in a country especially
with so much wealth.
It is sad to see that in a country as wealthy as the United States there are children who
go to bed hungry and have nowhere to live.
Many people are unable to consume a good diet, live in a secure environment, or receive regular
medical attention despite programmes such as food stamps, public housing complexes,
the Affordable Care Act, and Medicaid.
Food, shelter, and health care are essential necessities, and failing to provide a social
safety net for those who cannot afford them is immoral.
Join us today to learn more about economic inequality in the United States, the factors
that contribute to it, and what can be done to address it.
Let’s define economic inequality first…
The unequal distribution of income, wealth and opportunity between different groups in
society is referred to as economic inequality.
It is a problem in practically every country, and many individuals are locked in poverty
with few opportunities to rise up the social ladder.
Now…
Why should we care about economic inequality?
Inequality is undesirable for any society because it leads to weaker social relationships
between people, which increases the likelihood of health and social problems, lower rates
of social goods, worse population-wide contentment and enjoyment.
For example, income inequality has been linked to corruption, which is assumed to stifle
long-term growth by poor resource allocation, because individuals with low salaries are
unsatisfied with their economic situation.
Long-term GDP growth rates are lower in societies with substantial economic inequality.
As a result indicators like high crime rate, low public health spending and political inequality
make their way to the top.
Living in an unequal society can induce stress and anxiety, both of which can be harmful
to your health.
People in more equitable societies tend to live longer, are less likely to be mentally
ill or fat, and infant mortality is generally lower.
Market failure, which occurs when resources are distributed inefficiently in a free market,
contributes to high levels of unemployment and ultimately, poverty levels in society
rise significantly as a result of this.
In fact, individual and family inequality is an ongoing issue, but when taken to its
logical conclusion, it can possibly lead to a bust cycle that ends in a global recession.
Inequality is a vicious cycle.
So…
If we talk about the United States…
It has a complicated problem of economic inequality…
The States has more income and wealth imbalance than almost any other developed country, and
it is growing rapidly.
To make matters worse, social mobility in America is significantly lower than in Canada
and Europe.
Since the late 1970s, income inequality in the United States has risen considerably,
and the topic has received increased attention in recent years.
Moreover, the global financial crisis of 2008, the long and unequal recovery that followed,
and now the economic shock produced by the pandemic, have exacerbated these patterns
and posed policymakers with new challenges.
In recent decades, the wealthiest families in the United States have seen higher growth
in wealth than other families, a pattern that confirms the growing concentration of financial
resources at the top.
As a result, the wealth disparity between the wealthiest and poorest families in America
has more than doubled.
As the saying goes, the rich get richer and the poor get poorer.
So…
We can say that economic inequality is a huge problem in the United States
In the United States, wealth has been shifted from low- and middle-income households with
low savings rates to higher-income households with higher savings rates due to income inequality.
Moreover, in the United States, poverty and economic inequality are major human rights
issues.
Due to unequal distribution of wealth and income, the residents of the United States
may also face discrimination or unequal treatment as a result of their poverty.
They may be unable to obtain safe working conditions, housing, education, health care,
or clean water and sanitation.
Now…
Let’s talk about the reasons behind this economic inequality…
According to economists, the causes of rising inequality are multi-faceted, some of which
are difficult to analyze because they are systemic factors affecting the entire American
society.
1.
Altering tax policies According to some analysts, over the last
half-century, the top tax rates in the United States have been slashed repeatedly, contributing
to rising inequality. 2.
Long-standing racial and gender discrimination Many analysts ascribe substantial wealth and
income disparities across groups to the country's slavery and discriminatory economic policies
of the past.
For decades, Black Americans have had roughly twice the jobless rate as white Americans.
The presence of a salary difference between men and women is also well-established, though
the reasons behind it are still a point of conflict.
3.
Education Economic inequality is exacerbated by disparities
in education, both in terms of levels and quality.
Individuals with varying levels of education frequently make varying amounts of money.
Despite the fact that desegregation began in the 1950s, schools remain unequal in the
United States, a problem that may be due to finances as much as a desire to discriminate
directly.
4.
Low wages The federal minimum wage is presently $7.25
per hour, according to the US Department of Labor.
In recent decades, the real value of the minimum wage – its purchasing power – has decreased,
and in many places, it has not kept pace with rising costs of living.
So…
If it’s such a big problem…
What can be done to fix this?
Raising the minimum wage, making the tax code more progressive and taxing wealth alongside
income, have all been proposed in recent years as ways to reduce income and wealth disparity.
On the other hand, it is believed that greater taxes will impede economic growth and innovation.
While reducing income inequality in the United States may slow overall GDP growth, it may
be justified by current liberal notions of justice if it leads to long-term gains in
significant measures of well-being, such as the health, educational, and employment prospects
of the less fortunate.
Governments must do more to combat inequality directly through targeted policies that take
into account the implications of technology, globalization, public health, and other emerging
variables.
The government also has the authority to provide equal education and chances for the poor to
get out of poverty.
Similarly, public education appears to be very balanced in terms of cost as the majority
of high-paying jobs necessitate a high level of education.
According to a 2019 study by the Federal Reserve Bank of St. Louis, families headed by someone
with a bachelor's degree earned 100 percent more in 2016 than those headed by someone
without.
Wealth redistribution through higher inheritance taxes, the promotion of broader ownership
(e.g., greater worker ownership), and the socialization or redistribution of capital
and land equally to all citizens are all indirect ways to reduce income inequality by equalizing
the unearned income that comes from wealth ownership.
Furthermore, policymakers should take other steps to foster strong broad-based wage growth,
such as raising the federal minimum wage, expanding overtime pay eligibility, addressing
gender and racial pay disparities, and protecting and strengthening workers' rights to bargain
collectively for higher wages and benefits, in addition to attempting to keep labor markets
tight.
Now you might be thinking...
Is the government not doing enough to solve this inequality right now?
Well...
The current measures have had some success, but they need to be expanded and varied.
To minimize inequality, we must first comprehend its roots and implications, which can be complicated
and intertwined with social, economic, political, and environmental systems and resources.
For decades, economic and policy changes, most notably a long-term reduction in interest
rates, have compensated for the drag on demand growth caused by rising inequality.
However, these compensating mechanisms are expected to fail in the future, implying that
the inequality-induced drag on demand would result in weaker overall economic development.
Individual citizens must also step in to fill this hole, as the government exists solely
to ensure that people's rights are protected.
The rest is up to individuals, charities, religions, and other entities.
Moreover, policymakers should do two things in the future.
They should continue to press for genuine full employment while prioritizing wage growth.
They should also give workers the power to achieve acceptable wage increases even when
the economy isn't at full employment by improving and enforcing labor laws and making collective
bargaining simpler for workers.
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