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Issue of Income Inequality in US

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    There are many social issues in the United States that concern both status quo and power. In this paper I will be discussing the disturbing gap in relation to income inequality as well as the cause of high and perpetual poverty rates in America. Income inequality is defined as an extreme concentration of wealth or income in the hands of a small percentage of a population. It has been described as the gap between the rich and poor. Those who are most affected by income inequality are Asians and trailing that are Blacks according to the Pew Research Center Analysis. Poverty is defined as a state or condition in which a person or community lacks financial resources and essentials for a minimum standard of living. Those who are affected most by poverty are Native Americans and Blacks according to PovertyUSA. These two definitions seem extremely straightforward when reading them, yet this is a concept very difficult to grasp, especially for those who are the richest of all. Understanding both income inequality and poverty entails having an understanding of the history of the United States as well as the socioeconomic factors that are structured in place in America’s economic system.

    From the very beginning of time, humankind has remained true to the concept of doing what is necessary in order to survive. We see this is true from the earliest of times in Mesopotamia, Greece and Rome where there was a social order in place to keep the rulers the richest of them all and the peasants and slaves the poorest. The hierarchy pyramid descended from top to bottom. From the ruler to the nobles, to the government officials to the merchants and traders, to the peasants and then finally to the slaves. Those from the bottom lived, served and died for those sitting at the top of the hierarchy. They fought for survival by hunting, gathering, and sacrificing, which in no way is different from the time period now. Forms of income and means of living differ in reference to our present day but the concept has been around for millions of years and we still see that there has always remained a “lower” class. Although we have more advanced technology and resources that allows us to work more efficiently, workers are still exploited just as they were in the earliest of times.

    Income inequality has remained a controversial topic for many years. Not enough light or action has been shed upon the catastrophic and long term impacts inequality households have to face in regards to how much money they bring home. The United States in regards to its position on the topic of income inequality has had its ups and downs in tackling this ongoing topic. In 2019, American workers earning the lowest federal minimum wage of $7.25 an hour contribute more to Social Security than the wealthiest people in the nation. Those who are able financially to give more, are given a tax break if they make over $132,900 while the lowest earning working man or woman in the nation making less than a Hamilton has to continuously give a percentage of their earned paychecks. Taking a closer look at the distribution of wealth it is very apparent that it has been wider than ever. According to Business Insider, Jeff Bezoz is the richest person in the world, which makes his net worth greater than the GDP of many countries including Costa Rica, Afghanistan and Iceland. He makes $2,489 dollars per second, an amount that is less than twice of what a median US worker earns in one week. Elon Musk, the founder of Tesla Motors earns 40,668 times more than his average Tesla Motors workers. The pay to worker ratio is astonishing and very well shows the structure United States corporations have in place to exploit its workers.

    Generational wealth is the largest contributor in the long lasting divide between the affluent and the impoverished. Income inequality is often times the main reason behind intergenerational poverty. There is a social divide in place that has not shifted for generations keeping generational wealth within the same families for years, while in turn keeping those who do not have the access or the means to obtain a higher education and progress as citizens in the United States at the bottommost level for generations. Families such as the Waltons, who are the founders of Walmart are worth $169.7 billion dollars. This number is great for Alice Walton who is the fourth wealthiest woman in the world, but the number for the workers who make an average of $14.26 per hour is not. If you were to divide that number by the number of homeless persons living in the United States in 2017, each person would have an estimated $305,000, completely wiping out homelessness in the United States in regards to the 2018 census report. If we combine the wealth of the three most wealthiest families in the United States the number is estimated at around $348.7 billion, equalling more than 4 million Americans combined wealth. The managers and workers who are behind the scenes helping these wealthy families make their profits are barely making ends meet, creating a bigger divide between the upper class and lower class. The wealth of the rich is at the cost of the poor

    According to the census report for 2017, poverty was at 12.3% and in 2018, it was 11.8%. We see according to the census reports of 2017 and 2018, our poverty rates have declined by 0.5 percent and the population in poverty decreased from 39.5 million to 38.1 million within just one year. These statistics show a positive turnaround for the United States in some aspects, but we can’t forget that the gap between the rich and the poor is expanding at extremely high rates. We now have a diminishing middle class, leaving us those at the top making billions and those at the bottom who are not making enough for a decent standard of living. Although we see an apparent decrease in the poverty rate, we continue to get data that supports that the median household income has not changed regardless of decreased rates. There is an inequality in our systems that continually feeds the rich to become richer and keeps the poor under the same belt for years and years to come.

    The reforms that have taken place in the past to fight the high poverty rate in the United States have not reversed the effects that thousands of individuals deal with for long periods of time. We see this consistently throughout the United States history with poverty. In 1964, President Lyndon Johnson states in his State of the Union address “’Our aim is not only to relieve the symptoms of poverty, but to cure it and, above all, to prevent it.’ This in turn lead to Congress passing the Economic Opportunity Act which changed the state of the country. We see that with government intervention and programs such as Medicare, Medicaid, The Food Stamp Act, The Elementary and Secondary Education Act, as well as many more programs put in place show a decrease in poverty levels. An example to show are the years from 1967 to 2012 where poverty rates decreases from 26 percent to 16 percent. However, we see with programs that have been given budget cuts such as SNAP and healthcare, poverty rates will start rising, affecting moderate to low income households, children, and persons with disabilities greatly. There is a social ladder put in place that holds those in the lower class at the bottom. Reasons for that include housing, food, healthcare, childcare, and education. Those who are in these positions choose what they need as individuals and families in order to survive. When there is a small amount of income being brought into a household, opportunity costs are made. Is receiving an education more important than feeding one’s children? Is healthcare more important than housing? These are questions millions of households in poverty in America are faced with. The sacrifices made in turn become generational and the poverty rate fails to decrease drastically.

    There are and can be many laws set into place that can change the state the United States is in currently. In terms of decreasing income inequality and poverty rates, increasing the minimum wage could help millions of people out of the lower class and into the middle class. With the increase in wages there would be a drastic change in the economy, allowing consumers to be able to afford a multitude of services and resources as well as growing the economy. Research has shown that higher wages leads to better an individual’s health mentally and physically. Higher wages research has shown allow for workers to remain in their current jobs for longer terms. Studies that have taken place in states such as California who raised their minimum wage to $15 an hour show that new employment slots are available at a much larger rate than before. The potential increase in productivity from workers due to this increase in income could lead to higher savings and assets as well as investment in education. Lower class families and individuals sacrifice their chance at receiving an education to live paycheck to paycheck and provide a roof over their heads and food on their plates. Investment in education or the lack of is an important concept and component that contributes to the inequalities we see generationally.

    If the United States continues to have high rates of income inequality and poverty, the gap between the wealthy and the lower class will fail to close and the nation will regress instead. Lessening the impact that surrounding social impacts like structural inequalities is essential in taking steps forward in American economy.

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    Issue of Income Inequality in US. (2022, Jan 10). Retrieved from https://graduateway.com/issue-of-income-inequality-in-us/

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