You may have heard the catch phrase “the rich get richer and the poor get poorer,” but have you ever stopped to ask yourself what that really means? Income inequality, as defined by Investopedia it is “The unequal distribution of household or individual income across the various participants in an economy. Income inequality is often presented as the percentage of income to a percentage of population,” (Income Inequality). If income inequality is allowed to continue its growth unchecked, the working and lower class citizens will continue to experience declines in physical and mental health, the United States Economy will be stifled, and create other inequalities.
Robert H. Frank recently wrote an article for the New York Times discussing this issue, titled “Income Inequality: Too Big to Ignore” (Frank). In brief, his view is that the rising inequality in the United States bares a cost that far outweighs the benefits.
Robert Frank begins by summarizing how the economy was blossoming in the three decades after WWII, incomes rose about three percent a year across all income levels, roads were well maintained, and new infrastructures were built. However the last three decades the economy grows much more slowly and our infrastructure has fallen into disrepair (Frank 580). Frank states the most troubling fact is income growth is not rising in comparison to the rate inflation. Inflation is the buying power of the dollar measured over time. The inflation rate for the United States from 2003 - 2013 was 26.6%, (Current U.S. Inflation Rates: 2003-2013); whereas the average household income only rose 1.6% (Household Income in the United States).
Is this a matter for economists or philosophers to resolve? It seems that there are professionals...
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...ore." Gerlad Graff, Cathy Birkenstein, Russel Durst. They Say, I say. New York: W.W. Norton& Company, Inc., 2012. 580-585.
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By Larry J. Sabato. Longman Pub Group, 2006. Web. 2 Mar. 2011. http://wps.ablongman.com/long_oconnor_ag_8/33/8498/2175617.cw/content/i n dex.html Poole, Chris. "
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).
“Confronting Inequality” by Paul Krugman opens up our eyes to the fact that, in America, we are becoming more and more unequal based on our standings in society. Our standings in society is directly related to amount of money that we make and what class our parents were in while we were growing up. However, being judged based on our parents’ status is not justifiable. America is full of injustice when it comes the social structure of it’s’ citizens. The majority of America used to belong to the middle class, now there is less middle class and a widening gap between the high class and the low class of people. Yet not much is being done to correct this injustice. In fact, it seems that the more we do, the farther the gap widens. Why is
Income inequality has been and will forever continue to be a highly discussed topic in society. As a social experiment, income equality has historically failed. The adage from the communist era “from each according to his ability; to each according to his needs,” ran counter to human nature and experience. On balance, there are positive aspects to unequal income which include; its success in creating a more educated work force, competition among people to succeed and more stimulated productivity, which do not always, but tend to balance out any negative impacts such as; concentration of wealth, social consequences and outsourcing, that it may have.
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.
America is divided into social groups based on the income and financial assets of its citizens. One of the groups which forms part of the social system are the “mass affluent.” The mass affluent are portrayed as people who make more than the mass market, but less than one million. Mass affluent households generally hold from 250,000 to 1 million in income and financial liquid assets. More than 13 million households in the U.S. are mass affluent accounting for 11 percent of all U.S households (Nielsen.com).The mass affluent are the largest group part of the wealth management segment. The mass affluent social group falls between the middle class and the wealthiest of consumers. The typical mass affluent consumers is usually white, married, holds a white collar job and lives in a two income household with one child. The mass affluent are characterized as individuals who live a distinct lifestyle compared to the rest of the consumer market when it comes to financial preferences and media consumption. This social group lives in the suburbs, are empty nesters and form part of the baby boomer generation. Consumers part of the mass affluent hold white collar jobs in finance, business management and hold multiple investment accounts. Well-educated and very sophisticated these consumers do not classify themselves as rich. These individuals do not classify themselves as rich but have multiple investment accounts including 401k, IRAs, and CDs. The typical mass affluent consumer does not take many shopping trips but spends more money on each trip than the average customer (Nielsen.com). Two thirds of the mass affluent are 55 years old and older which is why so many are turning to IRAs. The mass affluent social group with approximately 22 mill...
In the United States there are four social classes : the upper class, the middle class, the working class, and the lower class. Of these four classes the most inequality exists between the upper class and the lower class. This inequality can be seen in the incomes that the two classes earn. During the period 1979 through the present , the growth in income has disproportionately grown.The bottom sixty percent of the US population actually saw their real income decrease in 1990 dollars. The next 20% saw medium gains. The top twenty percent saw their income increase 18%. The wealthiest one percent saw their incomes rise drastically over 80%. As reported in the 1997 Center on Budget's analysis , the wealthiest one percent of Americans ( 2.6 million people) received as much after-tax income in 1994 as the bottom 35 percent of the population combined (88 million people). But in 1977 the bottom 35 percent had about twice as much after tax income as the top one percent. These statistics further show the disproportional income growth among the social classes. The gr...
Between the end of World War II and the late 1970s, income inequality in the U.S. was reduced; but since 1970s, the situation with wealth distribution has changed. Data from tax returns in 1976 show that the top 1 percent of households received 8.9 percent of all pre-tax income. In 2008, the top 1 percent’s share had more than doubled to 21.0 percent.
Income inequality in the United States, as of 2007, has reached levels not seen since 1928. In 1928, the top one percent received nearly 24% of all income within the United States (Volscho & Kelly, 2012). This percentage fell to nearly nine percent in 1975, but has risen to 23.5% as of 2007 (Volscho & Kelly, 2012). Meanwhile, in 2007 (see
Data generated by the Census Bureau, the Bureau of Labor Statistics, the Federal Reserve and other nonpartisan sources oppose claims commonly made. For example, data from such agencies show that differences in family income largely reflect differences in how many members of a family actually work and how hard they work. Americans in all income groups have prospered, or have failed to prosper, together. Gains by upper-income Americans have not come at the expense of middle or lower-income Americans. Nor has anyone else gained in those periods when higher-income families have lost ground.
Reich, Robert. "Why the Rich Are Getting Richer and the Poor Poorer." Mountain View College Reader. Neuleib, Janice. Cain S., Kathleen. Ruffus, Stephen. Boston: 501 Boylston Street, Suite 900. 2013 Print.
In Confronting Inequality, Paul Krugman discusses the cost of inequality and possible solutions. Krugman argues to say that it is a fantasy to believe the rich live just like the middle class. Then, he goes into detail about how middle class families struggle to try to give their children a better life and how education plays a factor in children’s future lives. For example, children’s ability to move into higher education could be affected by their parents economic status. Also, He discusses how politicians play a role in the inequality, because most of politicians are in the upper economic class. Finally, Krugman says how we could possibly have solutions to these various inequalities, but how America won’t get
Desilver, Drew. “U.S. Income Inequality, On The Rise…” Pew Research Center. 5 Dec. 2013. Web. 12 Feb. 2014.
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.