Income Inequality in the United States

1056 words | 4 page(s)

The United States is a society which is divided along different social, cultural, and economic lines. Due to the varying levels of economic status, the American society has become unequal in terms of income generation among various households. The issue of income inequality has been a flash point in many public policy meetings as well as political discussions in the US. Policy makers identify income inequality as a pressing issue while President Obama describes it as a defining challenge of the present. The social as well as economic gaps have led to income earnings gaps. Furthermore, income inequality has led to increased conflicts and disparities among the American people. According to Ryscavage, economic tolerance is shaped by an environment where individuals have similar and equal opportunity to struggle and compete to succeed through the use of the available resources (Ryscavage). Even though the US is a developed nation and among the most affluent nations in the world, the level of income inequality is high and it has been rising rapidly for the last few decades due to a various reasons.

According to Stelzner income inequality is a gap between the rich and the poor. It refers to the manner in which econometric metrics are spread in a certain society’s population such as the American society (Stelzner). The income inequality gap has led to the demarcation of people along socio-economic classes. According to Nelson Mandela, “No one is born hating another person because of the color his skin, or his background, or his religion. People must learn to hate if they can learn to hate, they can be taught to love, for love comes more naturally to the human heart that its opposite”. The classes are aligned based on the level of earning for each person or household. Besides other major demarcating factors such as race, and religion, income inequality has been one of the key factors in classifying the American people into distinct economic classes.

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Apparently, Ryu notes that income inequality especially between the 2 percent super rich in America and the 98 percent poor has been gradually widening especially during the last three decades (Ryu). Statistics has shown that income inequality in America is high as compared to other developed nations. According to Danush, the richest 2 percent account for an estimated 20 percent of the national pre-tax income in America (Danush). Ryscavage notes that 65 percent of the Americans adults gave a suggestion that the income gap among the American population increased significantly during the last decade (Ryscavage). Another survey showed that 67 percent of the Americans adults are dissatisfied with the present trend of income as well as wealth distribution in the United States. The rich individuals as well as their households have been increasingly getting richer because of the American taxation policies which favor the rich at the expense of the low and middle-income earners (Fite).

In the recent years, besides widely blaming the economic policies in America, an intense debate has been ongoing in regard to the various cause of income inequality (Danush). Activities against income inequality have argued that the US has economic policies that favor the rich while the low and middle-income earners are taxed at the same level as the rich, hence increasing the income inequality gap. In addition, the effects of the recent economic crises such as the great recession experienced between late 2007 and 2009 put much pressure on the disposable income of the middle and low-income earners (Stelzner). The problem of income inequality the Americans are witnessing today would not have been a significant issue if people have equal opportunities to compete and acquire income.

One of the notable causes of income inequality in America has been the increasing or the greater dispersion of wages and salaries. Earnings in form of wages and salaries account for more than three-quarters of total incomes in many households among the American population. The gap between the upper class who earns large sums of money has been increasing over the years while the average low income earners have been remaining constant (Ryscavage). While the high earners have been accessing bonuses and increased benefits and constant increase of their salaries, the low income earners have experienced decline in earnings for instance in terms of bonuses.

Another notable cause of income inequality is gender discrimination and race discrimination. Gender discrimination is evident in the labor force where male employees receive high perks more than their female counterparts who are doing the same job. In addition, sometimes, employers prefer hiring males at the expense of females. In terms of race, a significant percentage of the black and the Hispanic communities are unemployed as compared to their white counterparts (Ryu). This has increased income inequality especially among the races in America. The rapid change in technology as well as the adoption for its use in various office and manufacturing purposes has led to a shift in labor demands. The low skilled workforce has been rendered jobless by the introduction of new technologies while the shift moves towards the high skilled workforces who are required to operate the technologies and are paid highly.

In a nutshell, even though the US is a developed nation and among the most affluent nations in the world, the level of income inequality is high and it has been rising rapidly for the last few decades due to a various reasons. The income inequality gap has led to the demarcation of people along socio-economic classes. Income inequality is mainly caused by the increasing or the greater dispersion of wages and salaries, gender discrimination and race discrimination, and the rapid change in technology as well as the adoption for its use in various office and manufacturing purposes has led to a shift in labor demands. Income inequality is an issue that needs to be addressed through enactment of sound policies to protect the interests of the low income earners.

    References
  • Danush, Uri. Inequality in America: Facts, Trends, and International Perspectives. 2012. Web. November 24, 2015
  • Fite, A. (2011). Andy Fite – A Song About Income Inequality. Retrieved December 05, 2015 from https://www.youtube.com/watch?v=_sfCTL7i-Gs
  • Ryu, Hang. Measuring Trends in U.S. Income Inequality: Theory and Applications. Springer Science & Business Media, 2012. Print
  • Stelzner, Mark. Economic Inequality and Policy Control in the United States. Palgrave Macmillan, 2015. Print
  • Ryscavage, Paul. Income Inequality in America: An Analysis of Trends. Routledge, 20 May 2015. Print

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