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Causes of income inequality in the united states
Causes of income inequality in the united states
What has caused income inequality
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Inequality exists around us and Americans more and more each day are asking one question, Is America becoming more unequal? The United States is one of the richest but unequal nations in the world. Compared to every other country, our level of inequality is similar to Malaysia and Mexico, unlike comparing to Western Europe and East Asia (rich nations) who have much lower levels of inequality. Income inequality refers to the amount to which income is distributed in an uneven manner among the population. In the United States, income inequality has been growing strikingly for some thirty years. Income includes salaries, interest on a savings account, dividends from shares of stock, rent, and profits. According to the Census data, the middle …show more content…
The United States shows wider differences of wealth between rich and poor than any other developed nation. “Net Worth,” is the sum total of your assets minus liabilities. A persons assets can include everything from an owned personal residence and cash in savings accounts all the way to investments in stocks and bonds, real estate, and retirement accounts. What liabilities do is they cover what a household owes, for example a car loan, credit card balance, student loans, mortgage, or any other bill that has yet to be paid. The Recession shows that the longstanding racial and ethnic wealth divide in the United States. The classic white family held a net worth six times larger than the classic black family at the end of the 20th century. That gap has now doubled up. The wealth hole between white and Hispanic households has extended also. Okay so some might think, how does inequality and health relate? Well evidence shows that the world indicates that many health outcomes can be linked to the level of economic inequality. Bigger economic inequality seems to lead to worse health effects. By bigger inequality, scientists who study the health of populations, poor health and poverty do go together. But great levels of inequality shows, bad affects to the health of even the wealthy, essentially because, researchers deal with, inequality reducing social cohesion, which indicates to more stress, fear, and insecurity for
What is wealth inequality? “It is the difference between individuals or populations in the distribution of assets, wealth or income.” [1] In sociology, the term is social stratification and refers to “a system of structured social inequality” [2] where the inequality might be in power, resources, social standing/class or perceived worth. In the US, where a class system exist, (as opposed to caste or estate system) your place in the class system can be determined by your personal achievements. However, the economic and social class that an individual is born into is a big indicator of the class they will end up in as an adult. [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.
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).
There is also the damage that the inequality does to the society and the government. Thomas Jefferson once said, “The small landholders are the most precious part of a state.” Today that would mean that the middle class is the most important part of our society, however, the farther we move into the future the weaker the middle class becomes (Krugman, 587). The America that we live in is unequal in income and social aspects. The rich do not live the same lives as those that are less fortunate, and the less fortunate do not get to enjoy the perks that come with the lives of the rich people.
To find the accumulated wealth disparity between whites and blacks Oliver and Shapiro first had to start with an analytical distinction between wealth and income. After all, simply glancing at Forbes Magazine’s list of top income earners for 2011 appears to indicate that the once prominent socioeconomic disparity among whites and blacks has vanished. Over the past decade, famous black individuals such as Oprah Winfrey, Michael Jackson, Michael Jordan, and Magic Johnson have all topped the charts as the highest income earners in America. At some points in recent history, blacks have even accounted for half of the top ten highest earners, an outstanding feat considering blacks account for only about 13% of the USA population. This picture painted by the list of highest income earners however, only tells half the story. Contrary to Forbes’ highest income list is Forbes’ profile of the 400 wealthiest Americans. This list contains few if any African Americans. Therefore, to explain this disparity a clear distinction had to be made between what is wealth and what is income.
Wealth inequality and income inequality are often mistaken as the same thing. Income inequality is the difference of yearly salary throughout the population.1 Wealth inequality is the difference of all assets within a population.2 The United States has a high degree of wealth distribution between rich and poor than any other majorly developed nation.3
Rowlingson, K. ( 2011). Does inequality cause Health and Social Problems? Birmingham: Joseph Rowntree Foundation.
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.
There are many people that think there is economic and wealth equality in the United States , but with all the statistics I provided it can be clearly seen that inequality in America is a serious issue , and it's getting worse with every year. I do believe that there should be some income inequality because that drives people to succeed , but I also believe that too much inequality limits a lot of people from achieving financial success.
Wealth inequality is a real issue that needs to be fixed. The imbalanced growth of the upper class compared to the middle class is a danger to American society as a whole. The rich becoming richer while the middle class remains the same leads to a power imbalance, with the rich using their money to run the country the way they see fit while the middle class speaks to ears that do not listen. The issue of wealth inequality needs to be fixed by raising taxes on the rich.
Income inequality in the United States has increased and decreased throughout history, but in the recent years, the widening gap has become a serious issue. Income inequality is usually measured by Gini coefficient. According to this method coefficient varies between 0 and 100; while 0 represents complete equality (income is distributed equally among all the population of the country), 100 represents complete inequality (only one person receives all the country’s income, while the rest of the population receives nothing). According to the Census of Bureau, the official Gini coefficient in the U.S. was 46.9 in 2010. This is way higher than the all-time low coefficient of 38.6 set in 1968 (qtd. in Babones).
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
America 's economy is dependent on the middle class. Slowly, the middle class is beginning to decrease. Soon enough there will be only the wealthy and the poor. Economic inequality is the gap between the upper class and the lower class. It is a problem that is growing everyday. Technology, education, race, gender, and globalization are the main causes of economic inequality. Each one of these causes contributes to the vicious cycle of economic inequality. The battle for our country 's financial wellbeing is upon us.
Income inequality has affected American citizens ever since the American Dream came into existence. The American Dream is centered around the concept of working hard and earning enough money to support a family, own a home, send children to college, and invest for retirement. Economic gains in income are one of the only possible ways to achieve enough wealth to fulfill the dream. Unfortunately, many people cannot achieve this dream due to low income. Income inequality refers to the uneven distribution of income and wealth between the social classes of American citizens.
According to a Global Wealth Report, 44 percent of global net worth is held by only 0.7 percent of adults, meaning that there is a significant division between economic classes around the world. Increasingly, more evidence has presented to show the effects that this economic divide has on communities particularly in health, social relationships, development, and stability. For example, in a society where the gap is large between the rich and the poor, life expectancy tends to be shorter and and mental illness and obesity rates are 2 to 4 times higher. In terms of social relationships, inequality on a larger level introduces more violence and
Income inequality is a big problem in the United States because the top, wealthiest American saw huge increases in their incomes, which the rest had their incomes go down. Bottom people do not have the same amount of money and the opportunity to move up the social ladder as the rich people do. In order to reduce income inequality, the government needs to tax the rich people more, and give poor people more money and more social services - education, food subsidies, health care.