Wealth and Income Gap in America
Wealth and income gap in the America is real and is believed to have increased in the 1970s, this was after stability was regained in the United States, and the period after was characterized with economic independence. Wealth and income gap is also known as economic inequality. Inequality is not limited in the United States, but similar trends have been observed both in other developed nations and in developing nations. Wealth and income inequality is common among the developed English speaking nations, with United States taking the lead due to individualistic lifestyles (Celik et al. 51).
Gini Coefficient is used in measuring income inequality, in the United States, Gini coefficient has been varying among the States, surveys done in 2009 indicated that Gini coefficient was lowest in Maine State and highest in Texas State (Celik et al. 37); with most growth taking shape among the top earners and the middle class earners. It has been noted that most Americans has a common belief that income inequality has been on the increment over the years. Scholars in America have diverse opinions on the causes of income inequality; variations have been noted in solutions, causes and in significance related to the trend (Piketty and Emmanuel 31).
Occupy Protest Movement was initiated in 2011 in addressing income inequality in the United States (Celik et al. 61). Majority of scholars has argued that increased labor skills and demand for high education are some of the major sources of income inequality. Some argue that public policy is the cause while a significant number of scholars have no definite reason explaining on income inequality. Modern society in United States is facing diverse economic opportunities, which is as a result of social mobility and technological advancement.
Wealth inequality in America is characterized with unequal distribution of tangible and intangible assets. Wealth accumulations are defined by automobiles, value of homes, businesses, personal valuables, investments and savings. Surveys have indicated that ten percent of the wealthiest persons in the United States control eighty percent of the financial assets in the nation (Celik et al. 89). There are high relations between income inequality and wealth inequality. Wealth in most cases is not part of the daily expenditures, but it constitutes the affordability of a family in gaining an opportunity that is desired by most people, which signals social prestige. Wealth in most cases contributes to financial security, influence in political power, used in the generation of more wealth and a source of prestige. Wealthy people are granted diverse options on the way they live, which in most cases is passed over from one generation to another generation.
Economic inequality is influenced by opportunity equality, equity, equality of outcome and life expectancy. In the recant years, economic inequality has been considered as a social problem in the United States and beyond, which generated Occupy Movement. It has been noted that inequality promotes investments to some extent; but excessive inequality is considered a challenge to the communities. Surveys have shown that income inequality to some extent hinders chances of growth in the long term. Economic inequalities in the United States vary with historical periods, societies, systems, economic structures and in individuals. Socialism and capitalism has been influential in contributing significantly to the economic inequality among the citizens of the United States (Shin and Gary 979).
OECD (Organization for Economic Co-operation and Development) argued that economic inequality is real in the United States, and that it has been on the increment over the years. Extremes of poverty and wealth have negative contributions to the society. It is argued that economic inequality in the United States is contributed by differences in salaries and wages, labor market outcomes, reforms in policies, globalization, changes in technology, aggressive taxation, computerization, racial discrimination, variations related to natural abilities and on nepotism (Shin and Gary 982).
The labor market is believed to be the widest cause of economic inequality, where the diverse markets have a role to play in the inequalities. Market supply and demand is believed to have influenced the differences across different types of work. Areas with imperfect competition are characterized with unequal distribution of information, skills, opportunities and education.
There is a need of mitigating economic inequality in the United States, some of the well known methods of addressing the challenge identified with market driven initiatives and government sponsored initiatives (Piketty and Emmanuel 6). A number of governments engage public education, progressive taxation, minimum wage legislation, subsidization or Nationalization of products and unionization legislatives. Market forces are guided by unionization and propensity to spend.
Economic inequality in the United States has been on the increment, a model that has led to Occupy Movement, an indication that economic inequality among the Americans has become a social problem. The poor are getting poorer, while the rich are getting richer. Surveys have indicated that mitigating economic inequality among the Americans is vital; the issue is under debate as the government grapples on the best initiatives to take in addressing the social problem (Piketty and Emmanuel 24). Modernization is highly blamed in significantly contributing to economic inequality among the Americans since 1970s, after economic stabilization of the nation.
Celik, Sule, Chinhui Juhn, Kristin McCue, and Jesse Thompson. “RecentTrends in Earnings Volatility: Evidence from Survey and Administrative Data.” The B.E. Journal of Economic Analysis & Policy (2012): 11-99.
Piketty, Thomas, and Emmanuel Saez. “IncomeInequalityintheUnitedStates,1913-1998.” Quarterly Journal of Economics (2003): 1-39.
Shin, Donggyun, and Gary Solon. “Trends in Men’s Earnings Volatility: What Does the PanelStudyofIncomeDynamicsShow?” Journal of Public Economics (2011): 973-982.
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