The Distributions of Wealth in America I. Introduction 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 During the creation if the current America, the narrative was, The American Dream. After the great depression, our economy was built on the backs of the industrial companies.4 The industrial revolution created a steady working class in America. Since these industrial workers were making decent wages, there was a budding middle class being …show more content…
created in America.5 After the industrial revolution and World War II was over, a new revolution was brewing in America, The Corporation Revolution. The Corporation Revolution solidified the middle class in America.6 This left a very large portion of the citizen in Americas in a financial situation that was considered livable.7 What was unseen during this time was the gap of wealth that was being created between the working and the rich The extremely rich started gaining more power after the great depression, while the normal people of America slowly lost all of their economy and income.8 The “American Dream” Turned into the America Lottery. The 2st century hasn’t been very kind to the average American family. The net wealth of most U.S. households fell between 200 and 2011.9 Only the top 20% of the nation saw an increase in median net worth over those years.10 The rich don’t have just a higher income they have higher wealth than everyone else.11 Americas top one percent holds the majority of the wealth in different assets.12 These assets include stocks and bonds, mutual funds, reality, and businesses equity. These extremely wealthy Americans control the country, while the bottom 60% of citizens hold almost three-quarters of the debt in America.13 America is so poorly ranked in wealth equality, we rate in our Gini Coefficient comparable to Brazil and other developing economies. (See Table 2, Income Equality in Selected Countries.) America is one of the worse ranked developed counties. This isn’t widely known by most Americans because most Americans would rather ignore the information rather than admit to being screwed over by the government. II. The One Percent Unequal wealth distribution is hardly and new or unique problem in America. Unequal wealth distribution has been prevalent in most societies since human civilizations were first built. A small minority of aristocrats, have held most amount of power throughout human history. During the present times, America is well behind almost every first-world nation in closing the gap between the classes. In fact, America is consistently digging themselves a bigger divide between the rich and the poor. The people who make up the one percent are: business executives, lawyers, doctors and politicians, among other high profile positions. Within this group of people there is an even smaller and wealthier group of people. We consider these people the top .01%. These people have averages incomes of over $27 million, which is over 540 times the national average income. Altogether, the top 1% controls over 43% of the nations wealth, with the next 4 controlling an additional 29%. That comes to a total of 72% of the nations wealth being held by just the top 5% of the United States. When most people talk about the one percent, they usually compare the number they make annually, which makes that gap seem smaller than what it really is. The income distribution is large, but it’s nothing absurd. To become apart of the 1% in income, you only have to have an average yearly income of $400,000. This doesn’t feel like an extremely high number to be considered 1%, but the One Percent is based off your wealth not your income. In order to be apart of the One Percent, you will need at least $8 million in current assets. These current assets include: privately held stock, bonds, trust funds, and business equity. The one percent holds 35% of all privately held stocks. If you give that kind of power in the stock market to a select group of people, weird and unusual things will begin to happen. Such things that could happen; would be certain billionaires inflating and deflating stocks by putting in money or pulling money out of certain stocks in order for their own gain. Warren Buffets is a big example of this. He one of the 10 richest men in the world and the majority of his wealth has been created through the manipulation of the stock market. This is the world we live in. The One Percent holds much more than just the stock market. They also hold 62.4% of all business equity in our country. The companies that run our country and provide it with the goods that support our country is controlled by the One Percent. These One Percenters own multiple companies, have a say in how these companies run, and are often looking out for their best interests when it comes to profit. The big corporation impact on this country has created an aristocratic economy that really restricts the people who are unable to get their hands on all of the assets the one percent has. III. The Bottom 80 Percent Inequality in the United States is growing at an exponential rate. It is not only an income inequality, but also a wealth economy. This much inequality from the top 1% and the bottom 80% is a moral outrage. The wealth inequality in America is one of the biggest reasons why out economy is lacking sustainability and is currently heading to another recession. While the 1% sits on all of their wealth assets, they are still making an average of $593,000 a year.
While the bottom 80% is making no more than $118,000 a year, which is the 80th percentile, and have a median annual income of $48,000. The 1% makes up of around 750,000 of the 150 million families in the United States. Therefor the one percent ends up taking of 25% of all income generated by the United States economy. That is an increase of three times since the Ronald Reagan Era when the one percent only received 8% of the total income in 1979. The last time the one percent owned this much of the income total was in 1928, which was right around the time of the great …show more content…
depression. The problem with the income gap is that our government has never attempted to help the poor class in America. We were made to believe when our president changed in 2008 that our working class was going to see a raise in wealth and benefits. From the years 2008-2010 the one percent captured 93% of income growth. The top one percent received from the recession, while the bottom 80% never were able to regain what they lost when our economy last crashed. When looking at data, it becomes increasingly sad when you realize how little of wealth the bottom 40 percent of people in America have. The bottom 40% have less than .2% of wealth in America. Bill Gates, who is the wealthiest man in America, has more wealth than the bottom 40%. That means one man living in America is worth more than 120 million people. Another amazing fact is that the top one percent is equivalent to 200 times the wealth of the bottom forty percent. It’s not just the top one percent that is drastically better off than the bottom 40%. The top 40 percent of Americans have 480 times more wealth than the bottom 40%. This is an insane amount. The “American Dream” has always been something that America has prided themselves on. You are given the chance to work your way up from the poor to middle class and have your white picket fence. This use to be true during the ages of big corporations and 401k’s and retirement plans. People would make enough money to support a family, put food on a table and might even have enough money to retire easily if they happened to find the right company. In this day and age it is increasingly hard to find a job that will play a salary that is livable for the low class of America. During the recession more than 15 million well paying jobs were lost and since then only 5 million of those jobs have been replaced. 60% of the jobs lost during the recessions paid between 1$3.84-$21.13, since 2008 only 22% of the jobs added have fallen into that category. While 58% of the jobs added were between $7.69-$13.84. This is continuously putting the poor into even poorer jobs. Some have called to increase minimum wage but that would only create inflation. Yes, the average income would increase but so would the average cost of living. An increase of minimum wage wouldn’t cause an increase in wealth distribution; it would only make people think they're making more than they really are. So while the bankers, lawyers, stock and bonder traders, corporation’s officials and business owners continue to increase their wealth. The working class in America will continue to struggle with making their bills and living a livable lifestyle. IV.
America Compared to the Rest of the World The great wonder is how did a country as great as America have such a great gap between the haves and the have-nots. Look no further than the wonderful works of Wall Street and Washington D.C. Both of these have done perfectly fine that past few decades compared to the rest of America. Why is that? Because our government makes laws that are in favor of big banks and Wall Street. What our government is saying is that unless you were born into money, ride the coat tails of the Wall Street pigs, or work with them in order to pass these laws, you’re out of luck. Better luck next life. 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
us. An organization was created for the improvement of economic disparity around the world. The Organization for Economic Co-operation and Development (OECD) Mexico, Chile, and Turkey have the highest inequality among the OECD members. On the flip side, Denmark, Slovenia, and Czech Republic have the lowest. Some of their goals are to restore confidence in markets and the institutions that make them function and re-establish healthy public finances as a basis for future sustainable economic growth. As well as fostering and supporting new sources of growth through innovation, environmentally friendly ‘green growth’ strategies and the development of emerging economies and ensuring that people of all ages can develop the skills to work productively and satisfyingly in the jobs of tomorrow. This is an excellent organization that is actively looking out for the bottom tier of people in this world V. Conclusion The 21st century has not been kind to average American families. The net worth assets minus debts of most U.S. households fell between 2000 and 2011. Only the top two quintiles of the nation’s wealth distribution saw a net increase in median net worth over those years. The rich don’t just have more wealth than everyone else. The bulk of their wealth comes from different and more lucrative asset sources. America’s top 1 percent, for instance, holds nearly half the national wealth invested in stocks and mutual funds. Most of the wealth of Americans in the bottom 90 percent comes from their principal residences, the asset category that took the biggest hit during the Great Recession. These Americans also hold almost three-quarters of America’s debt. This fact alone makes the “America Dream” something that is a façade. Something needs to be done in order for the American people to start living in a world that is hopeful for improvement and advancement. We live in a world that is a very sad and shameful world that is ruled by a tyrant government that is controlled by a few selected billionaires. It is time to take our country back.
Furthermore, economists, politicians, CEO, and other elites constantly gloat that the U.S. has the richest economy or the highest GDP in the world. Yet, are we not forgetting that there is such a tremendous gap between rich and poor in this country, and thus a large number of our citizens are forced to live under near Third World like conditions?
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)?
America was once known as the land of opportunity. However, that is no longer the case. Americans are still suffering from a depression that began three years ago in 2008. According to the Bureau of Labor Statistics, in 2007, the United States unemployment rates were 4.6 percent. In 2009, one year after the depression began, the unemployment rate rose to 7.6 percent. Millions of Americans are living in poverty, unable to afford the basic necessities. On the other hand, there is a minuscule percent of the population that are billionaires. Written in 2005, Holly Sklar’s essay “The Growing Gulf Between the Rich and the Rest of Us” argues that if something isn’t done about the growing inequality between the rich and the poor, the American economy as a whole will weaken. A year later, the Economist published the article, “Inequality and the American Dream” implies that the American dream is broken. Sklar’s argument sheds light on the Economist’s argument. In particular, Sklar’s use of facts regarding the wealthiest Americans, the poorest Americans, and the discussion of the impact of inequality on society provide insight into the Economist’s article.
There is a high degree of social inequality within the United States. Of most modern industrial countries, the United Stated has some of the richest and some of the poorest people to be found. That fact is very disturbing, however, explains why much of the inequality exists in the US. In the following essay I will explain to you about the inequality in our country and why it occurs, based on the theoretical perspectives of a functionalist, conflict theorist, and social interationist.
Inside of this video, this guy really targets an issue nobody has really been presented. He shows charts that talk about how we Americans think our wealth is distributed. We think distribution is doing alright. Americans think that the bottom 40% is getting a bit of money. They also believe that the middle class is doing reasonably well. Unfortunately, that is not the case. In the video, he breaks it down a little bit getter. He shows a graph that shows how money is actually being distributed. The poorest of poor don 't even register on the poverty line. The middle class is barely making it. And then there is this huge difference between "the rich" and the poor. It is proven that the 1% of America has 40% of the entire nation 's wealth ("Wealth Inequality in America."). The bottom 80% of America only share 7% of the nation 's wealth among themselves. The top 1% has 50% of the stocks, bonds, and mutual funds. The bottom 50% of Americans only own 0.5% ("Wealth Inequality in America."). The poor is not just getting by but they are scraping and fighting to get by. Now that it is clear that there is a lot of poor people in America, it is important to figure out how to fix
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.
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
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.
The distribution of income and wealth is a crucial factor in determining the level of inequality in an economy. Personal income is the flow of funds received in a given period of time by persons or households, and personal wealth refers to the value of net assets of a person or household, it represents the value of items owned less any debts owed by the person or household. Income and wealth are the economic resources that households use to support their consumption of goods and services. There are many benefits of inequality, however many costs as well.
Wealth inequality can be described as the unequal distribution of assets within a population. The United States exhibits wider disparities of wealth between rich and poor
Wealth inequality is the uneven distribution of resources in a given state or population, which can also be called the wealth gap. The sum of one’s total assets excluding the liabilities equates the person’s wealth also known as the net worth. Investments, residents, cash, real estates and everything owned by an individual are their assets.In reality, the United States is among the richest countries in the world, though a few people creating a major gap between the richest, the middle class and the poor control most of its wealth. For more than a quarter of a century, only the rich American families have shown an increase to their net worth.Thisis a worrying fact for the less fortunate in the country and calls for assessment (Baranoff, 2015).
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.