The Politics of the Increasing Income Gap and its Effect on Identity
Economists have long debated the sustainability of economic inequality. Is economic inequality here to stay or is it a temporary phenomenon in the United States? Regardless of the debate, one fact is certain, it is present and real for the millions of Americans in poverty. Since the election of Ronald Reagan, there has been a startling trend in American politics; those needing the most help are receiving the least help. This paper will focus on the political climate since the election of Ronald Reagan and the rhetoric of Washington surrounding the “welfare state.” Furthermore, it will determine the relationship of those struggling from the effects of economic inequality to
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It has been since the election of Ronald Reagan in the early 1980s, the top 1% has seen a rise in income from nearly 11% of the national income to 21% of the national income. This comes in contrast to the bottom 50% that has decreased in income as a percentage of national income from 20% to 12% of the national income. Prior to the election of Reagan, the percentage of wealth the top 1% had was declining. (“U.S. Inequality Keeps Getting Uglier.”) Some have argued the causes of economic inequality ranging from stagnant wages to trade liberalization; regardless of debate of the causes, it has and is present within the present day United …show more content…
In Susan Straight’s novel Highwire Moon, a mother named Serafina was racially profiled by the police as they assumed she was an illegal immigrant due to her inability to speak proper English. The author understood the stereotypes present in the status quo America, therefore writing, “The policeman tackled her… ‘ID? ID? You got ID?’ ‘Mydotter! Mydotter!’ she screamed … ‘Okay, okay, you need a doctor. In Mexico. Get a doctor in Mexico’.” (Straight, 8) Without taking the time to understand whether Serafina was an illegal immigrant or even from Mexico, the policeman’s underlying bias was based on her ragged clothing, inability to speak proper English, and her complexion. These biases originated due to the phenomena of rhetoric in politics shaping the constituency’s beliefs and creating determinantal
Though ‘Reaganomics’ was successful both at controlling “stagflation” and promoting economic growth, it has and always will be an extremely controversial topic regarding the redistribution of wealth. Immediately after being sworn into office, Reagan implemented the first of many tax cuts. The Economic Recovery Tax Act passed in 1981 took 20% off taxes from top income levels and 25% off taxes from all lower income levels. Additional tax cuts, enforced in 1986, lowered taxes for those with high incomes by another 28% and those with lower incomes by 15%. These cuts were enacted based on the principle that tax breaks for the upper echelon of society would encourage investment and spending, creating new jobs for lower income individuals.
3. What are the effects of this wealth inequality in the US and what causes it, as well as some possible solutions and their ramifications, will all be discussed and answered below. There has always been a wealth gap between the richest and poorest in society. However, in the past decade, the wealth gap between the richest and poorest citizens in the US has been growing rapidly. In the 70s and 80s, the wealth and income growth rate for both poor and rich people were similar, however, between the years 2009 and 2012 the top 1% income increased 31% while for the bottom 20%, their income actually dropped and for the vast majority of Americans, the average yearly income only increased by 0.4% [4].
Throughout the years, “ U.S income inequality has been increasing steadily since the 1970s and now has reached levels not seen since 1928” (Source A).
In the 1980’s, President Ronald Reagan and his staff implemented the largest economic transformation in the United States since President Franklin Roosevelt’s New Deal in the 1930’s (Niskanen 1993). The media labeled his economic agenda as “Reaganomics,” a term that the majority of Americans have since adopted to characterize President Reagan’s economic policies (ushistory.org 2014, White, Bay, and Martin 2012). Many Americans have contended that the policies of Reaganomics were disadvantageous to those who are dispossessed, the majority of whom were minorities (Pierre 1991). According to Jesse Jackson, the main tenant of Reaganomics, or “reverse Robin Hood[ism]” as he titled it, was that “the poor had too much money and the rich had too little” (Jackson 1988). Through his policies, President Reagan authorized extensive tax cuts for the upper income bracket and corporations, increased the military and defense budgets, and enacted extensive spending cuts to welfare programs, such as food stamps, child-care subsidies, job-training programs, and welfare assistance programs for the working poor (Mintz and McNeil 2013).
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.
President Obama also decreased the tax cuts for high-income taxpayers in his second term. “At the top of the American economic summit, the richest of the nation’s rich now hold as large a wealth share as they did in the 1920s.” Even amongst the very wealthy, from 1982 till now, the average net worth of the 400 richest Americans went from $230 million to $5.8 billion. Even with inflation, the increase in the average is significant. Not only is the wealth gap large, but there is also a disparity in income. Since 1928, income inequality is at the highest levels its been in U.S. history. The income inequality is large, but the wealth gap is even larger. “…while the highest-earning fifth of U.S. families earned 59.1% of all income, the richest fifth held 88.9% of all wealth.”
Why are so a large number of people that beg for money, sitting on the streets, looking for food 's some sort? It is not day-to-day that we consider situations like this, but it is out there constantly without all of us realizing it. A number of states have poverty 's more issues than others, but it is sad to think about how plenty of people are actually considered to be in poverty. This is an inequality concerning me a lot, and is getting worse daily. Poverty in the United States relates to people whose annual household earnings are less than a poverty line set by the United States government. Poverty is common, resulted in by numerous different factors such as failing markets, structural problems, unfortunate mishaps, and poor individual
The main ideal that keeps public policy in America extremely limited compared to other democracies is the desire for less government, a more limited government. The strong American beliefs in individualism and equality result in this desire for limited government, and thus limited public policy. American government programs are much less ambitious than those of other industrialized democratic nations. Programs in health, welfare, housing, transportaion, and many other areas are much smaller and less ambitious (Kingdon: 44). This is a direct result of the American desire for limited government. Americans don't want large programs in these areas because they more or less fear big government and believe it is inefficient and wasteful. Americans lean towards a desire for equal oppurtunity as opposed to equal results, and thus believe government should stay clear and let people either succeed or fail on their own. They believe that successful individuals are simply the ones who achieved more with the opportunities they were given, and that it's the job of the government to keep these opportunities equal for all, and not its job to see that everyone ends up successful. By taking the focus away from equality of results, America has become the victim of large income disparities as compared to other countries. In 1990, American households in the top decile of the income distribution had disposable incomes that were nearly six times greater than households in the bottom decile. Most other large industrialized countries showed upper incomes o...
Inequality exist and is high in America because the amount of income and wealth that is distributed through power. In America the income distribution is very inequality and the value of a person wealth is based on their income with their debts subtracted. “As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers)” (Domhoff, 2011). In contrary the poor do not get ahead and the rich get more. Americans are judged and placed in class categories through their home ownership which translates to wealth. Americans social class is often associated with their assets and wealth. “People seek to own property, to have high incomes, to have interesting and safe jobs, to enjoy the finest in travel and leisure, and to live long and healthy lives” (Domhoff, 2011). Power indicates how these “values” are not distributed equally in American society. Huge gains for the rich include cuts in capital gains and dividends and when tax rates decrease for the tiny percent of Americans income is redistributed. Taxes directly affect the wealth and income of Americans every year.
The article “As American As Apple Pie” is about, poverty and welfare and how they are looked down upon and treated with suspicion or outright antagonism, and how many associate those in poverty with negative stereotypes often seen as deviant such as homeless, lazy, and criminals. Mark R. Rank points out how poverty across the world is a lot more normal than we think it might be. Some people are at greater risk than others, depending on age, race, gender, family structure, community of residence, education, work skills, and physical disabilities. This article provides the readers with data and analysis of American poverty and welfare over the course of the past 25 years. Rank also talks about how we have framed the poverty issue, and how we should frame it.
The prospect of the welfare state in America appears to be bleak and almost useless for many citizens who live below the poverty line. Katz’s description of the welfare state as a system that is “partly public, partly private, partly mixed; incomplete and still not universal; defeating its own objectives” whereas has demonstrates how it has become this way by outlining the history of the welfare state which is shown that it has been produced in layers. The recent outcomes that Katz writes about is the Clinton reform in 1996 where benefits are limited to a period of two years and no one is allowed to collect for more than five years in their lifetime unless they are exempted. A person may only receive an exemption on the grounds of hardship in which states are limited to granting a maximum of 20% of the recipient population. The logic behind this drastic measure was to ensure that recipients would not become dependent upon relief and would encourage them to seek out any form of employment as quickly as possible. State officials have laid claim to this innovation as a strategy that would “save millions of children from poverty.” However, state officials predict otherwise such as an increase in homelessness, a flooding of low-waged workers in the labour market, and decreased purchasing power which means less income from tax collections. The outcomes of this reform appear to be bleak for many Americans who reside below the poverty line. How does a wealthy country like America have such weak welfare system? Drawing upon Katz, I argue that the development of the semi-welfare state is a result of the state taking measures to ensure that the people do not perceive relief as a right and to avoid exploiting the shortfalls of capitalism ...
The United States of America is one of the richest countries in the world. In fact, we rank 9th in gross domestic output (Atlas), yet this is also the same country where too many working parents have to go without meals so that their children can eat, and families are often left deciding which bill they can actually afford to pay this month. With that being said, as a country, we also have some of the highest rates of income inequality of comparable developed nations (Radius TWC). It’s not that people are working less, on the contrary, Americans are now working twice as hard as previous generations, yet they are getting nowhere (Kornbluth). Income inequality does not just harm one person; income inequality hurts the entire
In America, wealth inequality is seen distinctly between the average home and the mansions of billionaires and sport superstars. It has been severe for a very long time and wealth differences in the poor and the rich are extremely distinguishable. However, people do not realize how serious the wealth differences are in America, because of how nearly every action a person makes affects wealth. Even being born a certain race may affect your wealth positively or negatively. Wealth inequality in America is impacted or influenced by many factors.
With the current unrest occurring in our nation, it would both naïve and in many cause ignorant to believe that is not social inequality still happening each and every day. Social inequality itself can be described as the presence of unequal distribution of benefits and opportunities due to “the significance of a group’s hierarchies and statuses” in a society that drastically hinder one’s life by “setting limits and circumscribing one’s possibilities” (Henslin, 2012). Unfortunately, there are still a large number of instances of social inequality that are still occurring in today’s society with little change being conducted to change them.
Income inequality continues to increase in today’s world, especially in the United States. Income inequality means the unequal distribution between individuals’ assets, wealth, or income. In the Twilight of the Elites, Christopher Hayes, a liberal journalist, states the inequality gap between the rich and the poor are increasing widening, and there need to have things done - tax the rich, provide better education - in order to shortening the inequality gap. America is a meritocratic country, which means that everybody has equal opportunity to be successful regardless of their class privileges or wealth. However, equality of opportunity does not equal equality of outcomes. People are having more opportunities to find a better job, but their incomes are a lot less compared to the top ten percent rich people. In this way, the poor people will never climb up the ladder to high status and become millionaires. Therefore, the government needs to increase all the tax rates on rich people in order to reduce income inequality.