Closing the Income Gap
In today’s capitalist economy, where economic transactions and business in general is centered on self-interest, there is a natural tendency for some people to make more than others. That is the basis for the “American Dream,” where people, if they worked hard, could make money proportional to their effort. However, what happens when this natural occurrence grows disproportional in its allocation of wealth within a society? The resulting issue becomes income inequality. Where a small portion of the population, own the majority of the wealth and the majority of the population own only a fraction of what the rich own. This prominent issue has always been the subject of social tension from even before the French Revolution and spawns numerous other social issues in a society. In the more recent Occupy Movement, beginning in 2011, protesters used income inequality as a motive. Moreover, they were justified in doing so. In a 2010 statistic, it was revealed that the top 1% of America, own 35% of the wealth while the lower 80%, over the majority of the population, only have 11% of the nation’s wealth distributed between them. Financially the situation is even worse where the bottom 80% own only 5% of the financial wealth and the top 1% own 42% of the Nation’s financial wealth. Not to say the top 1% didn’t work hard to get to where they are, but according to the ideals of the “American Dream,” the top 1% should have worked 243 times harder than the average, not the poorest, worker in America. This extreme of disproportional wealth distribution is not only a source of social conflict, but a catalyst for various other problems that exist. In a 2011 TED Talk, Richard Wilkinson described the numerous side effects of unequal wealth distribution showing a direct correlation between numerous social problems and income inequality in various countries. He created an index which combines health and social problems, which include but are not limited to; life expectancy, math and literacy rates, homicides, imprisonment, mental and addiction problems and social mobility, and compared it to income inequality between the top 20% and the bottom 20% of a country. There was a distinct positive connection between the index and a countries wealth distribution with the United States being the highest by a large margin. He clearly showed that the more unequal a countries wealth distribution is, the more social issues that country has so to say that income inequality is an issue is an understatement because it directly affects general social dysfunction. Now, many people play the blame game for the cause of America’s income inequality but the truth is, no one or two factors are the reason for unequal wealth distribution. In the post-World War II era, income increase was generally equal throughout all levels of American society but as time progressed, the poor became richer in terms of income but the rich became disproportionally richer compared to the income increase of the poor. In 1990 when companies went public to gain more money, they had to show that the money they received was not going to waste so they had to maximize profits and to do so they, of course, took it out of their payroll which is the largest part of most companies expenditures. By hiring more part time employees and cutting wages to turn more profits, the owners and CEOs of the company made more while the average works pay was cut or the worker was fired altogether. In George W. Bushes early presidency there was an economic boom where the average income increased by 3%. However, the income of the rich went up by 10.1%, more than three times more than the average household. In 2008, the average American (middle 60% of the population) had majority (around 65%) of their wealth connected to their house where as the rich had majority of their wealth in stocks and shares and business. When the housing bubble bust...
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