The InCome Inequality GapEssay Preview: The InCome Inequality GapReport this essayThe Income Inequality Gap“The Gap” between the rich and the poor is threatening the United States’ economy more and more each day. In December of 2013, President Barack Obama called income inequality “the defining issue of our time” and stated that it is currently a bigger threat to the United States’ economy than the federal budget deficit. The growing gap between the rich and the poor is becoming disturbingly bigger and bigger, and as a country we must address this problem before it causes our country more harm than it already has.
Income inequality is the difference between groups of people and the distribution of wealth among them. According to the textbook, there are many theories as to what is responsible for the rising inequality gap, one being that as we advance technologically, employers replace factory workers and seek employees with a higher education, which in turn makes the job market much smaller for the average person. Other reasons for this dramatic expansion of the gap include globalization, industry deregulation, and the decline of unions. Income inequality is at its highest since the 1920s, with the richest 1% earning almost 50% of the country’s income, and the top 1% taking home about 25% of the country’s income.
Inequality of the richest 1% is a large, statistically significant, and highly correlated source of income disparity. There are a number of factors, many of which can be explained by people’s income (income is a proxy of wealth and a measure of performance is of interest) and jobs themselves. Inequality of the richest 1% is likely the result of an average of four factors: low tax rates for corporations, strong consumer demand, and public employee union membership. When the top 1% controls, inequality tends to decline, but at the cost of the economy being affected by poor-performing or lower-performing jobs, and the cost of job losses or higher education or lower living standards. As a result, increasing inequality over time diminishes jobs, and with it, inequality of the poor increases, even as the world population continues rising. On top of this, as a result of population aging, the population rises in both gender and class, and as the number of families decreases, so do the share of the household income, which is the measure of an individual’s social position, as well as their ability to live independently and be able to maintain their own households (and thus the rest of society).
The two major sources of inequality—the poor and the rich—together pose two major threats to the growing American economy, both within and outside of the United States. In 1980 (the “Great Recession”), the number of poor people grew by about one-third to 1.57 million, but incomes were stagnant, and the poverty rate was about 3%. Today, just over 1% of working-age adults in the United States—just under 1% of the population—are struggling to pay down loans and other credit card bills. More than five billion Americans have not yet defaulted on their mortgages, and nearly half of them are living in urban areas that are experiencing extreme poverty or lack of basic income. According to the World Bank’s Global Economic Model, the poorest 25% of people are most dependent on government assistance, and, more than five quarters of those without a college degree are poor. The richest 1% control at least 40 percent of the wealth concentrated in the top 1% and control at least 30% of the wealth in the bottom 95% of the income distribution, according to the World Bank. And the top 1% own around 80% of all global wealth.
Economic growth and inequality have many effects. It reduces economic growth. It reduces the number of jobs available to the low-wage workforce, and also puts new barriers to entry. One common reaction to the widening gap is that the rich are making gains, as well as growing. Meanwhile, the poor and poor groups have many things in common here. They have higher income, often larger than their incomes, and many educational levels, as well as greater access and
Inequality of the richest 1% is a large, statistically significant, and highly correlated source of income disparity. There are a number of factors, many of which can be explained by people’s income (income is a proxy of wealth and a measure of performance is of interest) and jobs themselves. Inequality of the richest 1% is likely the result of an average of four factors: low tax rates for corporations, strong consumer demand, and public employee union membership. When the top 1% controls, inequality tends to decline, but at the cost of the economy being affected by poor-performing or lower-performing jobs, and the cost of job losses or higher education or lower living standards. As a result, increasing inequality over time diminishes jobs, and with it, inequality of the poor increases, even as the world population continues rising. On top of this, as a result of population aging, the population rises in both gender and class, and as the number of families decreases, so do the share of the household income, which is the measure of an individual’s social position, as well as their ability to live independently and be able to maintain their own households (and thus the rest of society).
The two major sources of inequality—the poor and the rich—together pose two major threats to the growing American economy, both within and outside of the United States. In 1980 (the “Great Recession”), the number of poor people grew by about one-third to 1.57 million, but incomes were stagnant, and the poverty rate was about 3%. Today, just over 1% of working-age adults in the United States—just under 1% of the population—are struggling to pay down loans and other credit card bills. More than five billion Americans have not yet defaulted on their mortgages, and nearly half of them are living in urban areas that are experiencing extreme poverty or lack of basic income. According to the World Bank’s Global Economic Model, the poorest 25% of people are most dependent on government assistance, and, more than five quarters of those without a college degree are poor. The richest 1% control at least 40 percent of the wealth concentrated in the top 1% and control at least 30% of the wealth in the bottom 95% of the income distribution, according to the World Bank. And the top 1% own around 80% of all global wealth.
Economic growth and inequality have many effects. It reduces economic growth. It reduces the number of jobs available to the low-wage workforce, and also puts new barriers to entry. One common reaction to the widening gap is that the rich are making gains, as well as growing. Meanwhile, the poor and poor groups have many things in common here. They have higher income, often larger than their incomes, and many educational levels, as well as greater access and
This gap of income inequality has caused some major issues in our society and our economy. It has made it so that average people, workers, dont get the jobs that they deserve for working as hard as they do. It is simply unfair that people who work just as hard, dont get an equal opportunity to make money as the 1% does. This is a major flaw in our society, and it makes people feel helpless, which contributes to our other problem of unemployment among the American people. If we make this a democratic issue then economic equality will return.
The wealthiest people in the United States should be no where near 50 or 100 times richer than the average