The economic gap here in the United States is a great deal wider than in any other rich democratic nation. Why is there such a difference here in the United States? The most important reason for economic inequality in the U.S. and not other countries is due to the United State's particular economic policies (Christopher Jencks, "Does Inequality Matter?" Daedalus Winter 2002).
Let's look at economic policies of rich democracies that do not have such a huge economic gap. One can usually find centralized wage bargaining. This always compresses each end of the earning spectrum. The U.S. has no such policy. It is easier in other nation's to develop unions as compared to the United States. The United States does little to limit wage inequality. The minimum wage in the U.S. is low, unionization is difficult, and the U.S. doesn't transfer as much money to those who are not working than most other rich democracies (Jencks, 2002). It seems ironic that a country where so much emphasis is placed on social equality places so little effort to reduce economic inequality.
Why would the U.S. not place emphasis on equalizing the wage inequality? Well there are a few who argue that American poverty is just the result of people doing little paid work and not accepting social norms. This is true in all of the rich democracies. If one compares the underclass in each nation though, one will find that the American underclass worked a great deal more hours than did those in other countries yet there is a greater wage inequality here (Jencks 2002)? That doesn't add up.
What are the negative effects of economic inequality? Obviously there is the purchasing power difference. Due to the rapid rising of tuition in colleges, the richer are more apt to get a higher education. Also, statistics prove that life expectancy is influenced by economic inequality as well as the probability whether one will vote or not. As one can see, the negative...