Income Inequality in the US: The Effect of Growing Inequality in the Last 50 Years

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Income Inequality in the US: The Effect of Growing Inequality in the Last 50 Years
I Statement of Problem
Income inequality is a growing problem in the U.S. It refers to the extent to which income is unevenly distributed among the population in the U.S. Since the 1970s, inequality has increased significantly. The income received by the higher income households has risen drastically. The richest Americans continue to reap disproportionally from the growth of the U.S. economy while at the same time the wages paid to the workers have failed to keep the same pace. The poorest half of the population in the U.S. has experienced a steady decline in the amount of income, with the top 1% accruing more wealth. One-quarter of the workers in the country make less than $10 per hour (Pew Research Center np). As a result, America has such individuals having income that is below the federal poverty level. A majority of the individuals who earn less than $10 per hour are those who wait on others like cashiers and fast food workers. America’s top 10% have an average income that is none times as much as the bottom 90%. With income inequality, the bottom 90% is unable to enjoy the proceeds of the economic growth that American has experienced over the years. The issue of income inequality has led to the emergence of two opposing views. On the one hand, there are those who believe that income inequality poses challenges to the growth of the economy and improvement in the quality of life. On the other hand, there are those who see nothing wrong with the growing income inequality.
Political Aspect of Income Inequality
Income inequality reduces political equality in the U.S. through various ways. Firstly, it increases the resources available to the rich relative to the low-income earners (Houle 1505). The rich members of the society have access to resources which enables them to determine the political affairs of the country. Secondly, it widens the gap in policy preferences between the rich and the poor. While the low-income earners would prefer an increase in taxation among the rich, the rich prefer to be given tax cuts to make more investments. Thirdly, income inequality reduces participation especially among the low-income earners (Houle 1507). Individuals who earn less income in the U.S. feel that they cannot influence the political decision of their country. Some tend to shy away from political issues. Lastly, income inequality has adverse effects on democracy. In the U.S., income inequality threatens the health of democracy because political and economic power is in the hands of a few elites.
The Stakeholders
The main stakeholders in the issue of income inequality include Congress, businesses and workers. The majority of the blame on the rising rate of inequality can be blamed by the inability of Congress to take action. The existing loopholes allow the rich to build and maintain their wealth, which they pass down to their generations. Congress has the power to enact laws aimed at ensuring that that the income gap between remains at an acceptable level. Businesses have a role to play in addressing the issue of income inequality. They can ensure that workers do not earn below the minimum wage. Further, businesses should ensure that the senior employees especially the CEOs do not earn a disproportionately high income that the lowest earning staff members. Lastly, the workers are the ones affected most by income inequality. Lower-ranking employees in most companies tend to earn lower wages.
II Recent Event
An article appearing on The New York Times on July 10, 2019, demonstrates how the Trump economy is leaving a majority of the Americans behind. In the article, Rattner (np) indicates how Donald Trump’s approval ratings have risen, especially in his handling of the economy. The challenge is that while the economy continues to do well, a majority of the African-Americans are not well-off financially like their white counterparts. African-Americans have continued to fall behind in the last two decades. In 2002, African-Americans earned an average of 80% of what the white Americans earned. In 2019, the figure has reduced to 76% which indicates that the income gap between the African-Americans and whites still exists. While the Trump economy appears to be doing well, the African-Americans continue to earn relatively lower incomes than the whites.
Summarize and Evaluate Main Views of Your Problem
Different views have been put forth to help explain or find ways to understand the rising economic inequality in the United States. One such view is that economic inequality hurts growth and in the end, everyone loses. When asked why income inequality is a problem, the majority would consider the fairness opinion and note that it is not fair for a few people to earn more than others while in the same economy. This argument seems reasonable and even more when it appears that the rich are making more while the poor are making less. However, this argument loses traction especially when there appears to be some growth and everyone’s economic position strengthens. In the late 90s, for example, while there were people who still struggling, a significant percentage experienced growth and thus fewer people complained about inequality. However, looking at inequality from that angle limits the argument. Income or economic inequality is not a problem fo...