The highest earning fifth of U.S. families earned 59.1% of all income, while the richest earned 88.9% of all wealth. A big gap between the rich and poor is often associated with low social mobility, which contradicts the American ideal of equal opportunity. Levels of income inequality are higher than they have been in almost a century, the top one percent has a share of the national income of over 20 percent (Wilhelm). There are a variety of factors that influence income inequality, a few of which will be discussed in this paper. Rising income inequality is caused by differences in life expectancy, rapidly increases in the incomes of the top 5 percent, social trends, and shifts in the global ...view middle of the document...
The share of wealth controlled by the wealthy has been increasing exponentially since the 2008 stock market crash and before. Between 1978 and 2007, household income increased 275% for the richest 1%, 65% for the top fifth, and only 18% for the bottom fifth (Belsie). This fact remains accurate after government attempts at wealth redistribution such as taxes. This shows that the government is not successful at helping to redistribute wealth and the dramatic increases in wealth of the rich while the poor barely improve show the inefficacy of the “trickle-down economy” model. To figure out why the 10% is gaining wealth so quickly, the people that make up this small group must be analyzed. The top 10% is essentially comprised of three main groups: superstars, CEOs, and high-income professionals. However, the incomes of superstars and CEOs are increasing more rapidly than those of the high-income professionals (Belsie). While the incomes of high-income professionals and superstars are market driven, they do not benefit from the same rate that CEOs do.
There are a different amount of social factors that play a role in the rising income inequality. One of the most prominent is marriage trends. The degree of “associative matching,” or marrying someone who has had higher education when you also have had a higher education has increased over the past few decades. The gap between the incomes of highly educated couples and less educated couples has been continuously widening since the 1960s. More married women with college degrees are entering the workforce and further increasing incomes of well-educated couples. Higher income inequality leads to less social, cultural, and civic participation from the less wealthy which can in turn increase inequality. Technology also has an impact on income inequality. Those with training in technology and computers can now obtain higher paying jobs. Technology has increased inequality by eliminating the need for many jobs and change the workers in employment areas such as factories.
The global economy is moving, and the sad truth is that wealth is shifting out of the United States....
