Time and time again we hear politicians and office holders preach the need for a powerful middle-class. You may then be surprised to hear that “about 82% of America’s net worth belongs to the top 20%, the next 80% of people only own about 18% of America’s wealth” (UCSC). Some may argue that this disproportion is the beauty of capitalism, the chance to create an empire. I argue that the proportions are simply unfair. Why is it that “ the average CEO makes 350X as much as his/her employee” (UCSC)?
Let's take it back to the past in regards to wealth distribution in this country. The fact is that the economy boomed from the end of WWII into the 1970's. “Incomes grew rapidly and at roughly the same rate up and down the income ladder, roughly doubling in inflation-adjusted terms between the late 1940s and early 1970s” (CBPP). Through the 70's economic growth slowed, and the wealth gap widened. Middle-class families were now considered lower class. People relied on the government to help them out with welfare programs. The middle-class class was weakened and the gap grew and grew. There were periods of positive fluctuation, however the middle-class simply never regained it's status that was held in more prosperous times in the past.
The fact is that a lot of Americans are uneducated when it comes to saving their money. Living hand to mouth and check to check is definitely no way to live, however a majority of Americans do in fact live like this. Most middle class and lower class Americans do not understand that putting all of there earnings in a checking account is actually not the best or safest idea. With the current low interest rates, you are actually losing money if you are fully invested in a money market due to inflation. Thi...
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“A Guide to Statistics on Historical Trends in Income Inequality.” cbpp.org. Center on Budget and Policy Priorities, 2013. Web. 06 April. 2014. .
Smith, Noah. “How to Fix America's Wealth Inequality: Teach Americans to Be Cheap.” The Atlantic. Atlantic Pub., 12 March 2013. Web. 06 April 2014. .
Pennington, Maura. “ To Fix Income Inequality, The Have-Nots Must Become The Do-Somethings.” Forbes. Forbes Inc., 08 March 2013. Web. 06 April 2014. .
According to Gregory Mantsios many American people believed that the classes in the United States were irrelevant, that we equally reside(ed) in a middle class nation, that we were all getting richer, and that everyone has an opportunity to succeed in life. But what many believed, was far from the truth. In reality the middle class of the United States receives a very small amount of the nation's wealth, and sixty percent of America's population receives less than 6 percent of the nation's wealth, while the top 1 percent of the American population receives 34 percent of the total national wealth. In the article Class in America ( 2009), written by Gregory Mantsios informs us that there are some huge differences that exist between the classes of America, especially the wealthy and the poor. After
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].
Stone, Chad, Danilo Trisi, Arloc Sherman, and William Chen. "Center on Budget and Policy Priorities." A Guide to Statistics on Historical Trends in Income Inequality. Center on Budget and Policy Priorities, 6 Nov. 2013. Web. 03 Dec. 2013. .
I consider my family and I to be in the middle class category and from being in the middle class, and the facts that are provided, the middle class is slowly declining as the time goes on. I believe that a lot of people go beyond the middle class to the upper middle class or people go below the middle class to the poor category. I’ve found a graph from Forbes that compares the rates of all classes from 1979 to 2014. From observing the graph my initial hypothesis was right. The middle class has declined by 6.8% between the years 1979-2014.
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).
With each class comes a certain level in financial standing, the lower class having the lowest income and the upper class having the highest income. According to Mantsios’ “Class in America” the wealthiest one percent of the American population hold thirty-four percent of the total national wealth and while this is going on nearly thirty-seven million Americans across the nation live in unrelenting poverty (Mantsios 284-6). There is a clear difference in the way that these two groups of people live, one is extreme poverty and the other extremely
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
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.
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.
I never thought I would find so much information on the incredibly shrinking middle class until I searched around for it on the Internet. In the United States, the middle class is put into a strange socioeconomic category. Although it is not easily defined everyone believes they belong in that class. I guess what you can do is look at it in two different ways. First ask the question “What percent of all income is distributed to the middle class at any time,” then think about “How many families obtain enough income to achieve a middle class standard of living at any point of time.” Basically these are two ways of approaching the middle class called either the percentile approach or the class share approach.
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.
Divisions within the social stratum is a characteristic of societies in various cultures and has been present throughout history. During the middle ages, the medieval feudal system prevailed, characterized by kings and queens reigning over the peasantry. Similarly, in today’s society, corporate feudalism, otherwise known as Capitalism, consists of wealthy elites dominating over the working poor. Class divisions became most evident during America’s Gilded Age and Progressive era, a period in time in which the rich became richer via exploitation of the fruits of labor that the poor persistently toiled to earn. As a result, many Americans grew compelled to ask the question on everyone’s mind: what do the rich owe the poor? According to wealthy
Sutter, John. “What is income inequality, anyway?” CNN. 29 Oct. 2013. Web. 13 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.