Income Inequality In The United States

Of the many catalysts for the political and social unrest in our country, there is perhaps none more potent than the dramatic rise of income and wealth inequality of the past several decades. This describes the increasing gap in both the wealth and wages of the richest and poorest populations of the country.

In the United States, high standard of living is not equally shared with in the Americans. The 1970s and 1990s was period where economic inequality began to grow. Emmanuel Saez, an economics professor at UC Berkeley has been doing a research for the U.S. income inequality. He states that there has been an increase since the 1970s, and has reached levels that have not been seen since 1928. “In 1928, the top 1% of families received 23.9% of all pretax income, while the bottom 90% received 50.7%. But the Depression and World War II dramatically reshaped the nation’s income distribution, by 1944 the top 1%’s share was down to 11.3%, while the bottom 90% were receiving 67.5%, levels that would remain more or less constant for the next three decades. But starting in the mid- to late 1970s, the uppermost percent income share began rising dramatically, while that of the bottom 90% started to fall.”(DeSilver) Ever since then, economic inequality continues to increase, especially in the last three decades.

In William Domhoff’s article, Wealth, Income, and Power, he examines wealth distribution in the United States, specifically financial inequality. He concludes that the wealthiest 10% of the United States effectively owns America, and that this is due in large part to an increase in unequal distribution of wealth between 1983 and 2004. Domhoff also states that the unequal wealth distribution is due in large part to tax cuts for the wealthy and the defeat of labor unions. Most of Domhoff’s information is accurate and includes strong, valid arguments and statements. However, there is room for improvement when identifying the subject of what is causing the inequality.

Income Inequality in America is a problem that’s been going on for decades, and many feel that it hardly exists, the many people that feel that way are highly uneducated, and seem to not really care about this tremendous problem that in one’s eyes really has no end in the near future, in fact it has been gradually rising and one feels that it’s just not fair. Unfortunately, there’s not much that can be done, only of course if the poor class of people decide to actually educate themselves and get a higher education. One says poor class, simply because that’s how they’re classified. There are five types of levels that Americans are classified as, and they are: 1. Upper Class, 2. Upper Middle Class, 3. Middle Class, 4. Working Class, 5. Poor.

From 1938-1969, in America was in a period called the great compression, a time where the difference between the richest and poorest Americans was very small and economic growth was explosive. Due to past and current economic policies and events, income inequality has exploded in America, which is why in 2015 America had the highest level of wealth inequality in the world at 80.56 gini[1] . In the future this inequality will slow down economic growth, increase debt for middle income Americans, make America less democratic, and reduce economic mobility. This problem, however, does have solutions and this paper will lay out some of the solutions and the effect they will have on the economy, but first I will explain the history of income inequality in the US.

There is no doubt that wealth inequality in America has been escalating quickly; the portion of total income earned by the top one percent has doubled since the beginning of the 1970’s. The wealthy are the main beneficiaries

“Growing Apart: The Evolution of Income vs. Wealth Inequality” written by Michael Cragg and Rand Ghayad is an article about how wealth distribution in America has dramatically changed within the last three decades and how it has become one of the most political and economic trends in this nation. The main priority of the article is that it talked about how the wealth and financial statues in the United States has favored in the upper class and has opposed the middle and lower class within the last three decades. The first subdivision talked about how income inequality and wealth inequality are both different and how wealth inequality has a bigger negativity on the United States economic growth. The second subdivision talked about how if the

The highest earning fifth of U.S. families earned 59.1% of all income, while the richest earned 88.9% of all wealth. A big gap between the rich and poor is often associated with low social mobility, which contradicts the American ideal of equal opportunity. Levels of income inequality are higher than they have been in almost a century, the top one percent has a share of the national income of over 20 percent (Wilhelm). There are a variety of factors that influence income inequality, a few of which will be discussed in this paper. Rising income inequality is caused by differences in life expectancy, rapidly increases in the incomes of the top 5 percent, social trends, and shifts in the global economy.

Income inequality is a controversial topic discussed throughout the world. Many feel strongly that income inequality can hinder Americans or benefit them. Although some believe that income inequality helps Americans, it truly hinders them. Throughout the course of 30 years people have been unsatisfied with their income (Pettinger, 2011). Just about everything that is the result of income inequality can be thought of as a hindrance. Regarding Americans and their money, many various disadvantages can be directly related to income inequality.

Income inequality has come to the front as an issue over the past few years due to low-wage workers demanding a raise in the minimum wage. While the United States remains one of the richest countries in the world,

m here, the bipartisan comity ends. The reasons for this narrative and some possible prescriptions to alleviate or reverse income inequality differ. Some conservative thinkers such as Charles Murray believe that income inequality derives from cultural practices. He notes that Americans who get married and raise their children in a nuclear family are wealthier, have arduous work ethics that lead to a perpetuation of success, and are more likely to send their children to college. One corollary of Murray’s argument is that traditionalist conservative values need to be readopted by lower-class Americans. Conversely, liberal thinkers such as Thomas Friedman see income inequality as a result of a divide in education. Friedman argues that in a “flat

A major social problem in America today is its inequality of the distribution of income. "Income inequality refers to the gap between the rich and the poor. The United States has the most unequal income distribution in the industrialized world, and it is growing at a faster rate than any other industrialized country" (Eitzen & Leedham, pg. 37). The main reason as to why income is distributed so unequally is because of the gap between social classes.

The idea of social stratification by Karl Marx makes us think about the modern-day economic crisis in America. Although America is seen as having a democratic and a more economically developed country, but the gaps in wages, income, and wealth noticeably exist in its society. In the United States, the concept of the income inequality, or greater gap between rich people and everyone else, has been noticeably rising since the middle of the 20th century. Matters of inequality appear very significant issues that play a large role in the public speech over the last thirty years. There are so many issues that cause rising inequality in one society and many other inflexible social complications are related.

In today’s economic society, the presence of income inequality has only grown worse and shows no visible signs of stopping. According to an economics professor Emmanuel Saez, “U.S. income inequality has been increasing steadily since the 1970s, and now has reached levels not seen since 1928.” This calls for an alarm to the people in social groups such as women and low-income families. Income inequality is brought to life by factors the can be influenced by properties of our nations policies. The economic and public policies in the United States has led to income inequality due to the factors of education, discrimination, and monopoly power.

Many economic researchers cannot agree if income inequality is increasing or decreasing, or what these changes ultimately mean for the United States. Over the course of this semester, we have heard arguments from both sides of this debate. Based on the information we have received in this class and the information I will present in this paper, I will argue that income inequality is an ongoing problem in the United States and that it damages the very idea of the American Dream. The meaning of the American Dream has evolved with every passing generation, but many still equate this idea with freedom and prosperity. The income inequality gap is stunting American’s access to better education and healthcare, which is ultimately harmful to our society and economy.