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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
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).
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.
The distribution of wealth by country is an amazing thing to look at (see table 3). The United States comes clearly on top with 41.6% of the wealth across the world, with the next closest being China at 10%. This shows that there is plenty of wealth to go around in the United States; we just don’t equally distribute it. The Gini Coefficient is the best way the world economy can represent the income distribution of a nation’s citizens. The United States ranks well below any other first world country (See table 2) This is an embarrassment to our country. We are a wealthy and successful country, yet we have a bigger gap between the wealthy and poor than any other country that compares to
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.
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
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].
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.
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.
“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
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 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.