Income Inequality In The United States

3442 words - 14 pages

Income inequality not only harms us fiscally, but also affects our mental and physical wellbeing; therefore, it is important to identify the right ways to control wealth distribution among people.
History
Income inequality in the United States has increased and decreased throughout history, but in the recent years, the widening gap has become a serious issue. Income inequality is usually measured by Gini coefficient. According to this method coefficient varies between 0 and 100; while 0 represents complete equality (income is distributed equally among all the population of the country), 100 represents complete inequality (only one person receives all the country’s income, while the rest of the population receives nothing). According to the Census of Bureau, the official Gini coefficient in the U.S. was 46.9 in 2010. This is way higher than the all-time low coefficient of 38.6 set in 1968 (qtd. in Babones).
The first era of income inequality in the United States lasted from post-civil war to around 1937, but in the following ten years income inequality fell dramatically.
Between the end of World War II and the late 1970s, income inequality in the U.S. was reduced; but since 1970s, the situation with wealth distribution has changed. Data from tax returns in 1976 show that the top 1 percent of households received 8.9 percent of all pre-tax income. In 2008, the top 1 percent’s share had more than doubled to 21.0 percent.

Source: “Income Inequality.” (n.d.)
In the years from 1979 to 2009, the top 5 percent witnessed large increases in income, while the lowest-income fifth saw a decrease in real income.
Source: “Income Inequality.” (n.d.)
Between 2009 and 2012, income gains by the top one percent increased by over 30 percent, while for the rest income went up by less than half a percent.
Causes
Competition with other countries, corporate greed, tax policies, and technological growth are the primary causes of income inequality.
U.S. companies have to compete with lower-priced Chinese and Indian companies who pay less to their workers. Due to this fact, the U.S. has lost 20% of its factory, traditionally higher-paying union jobs since 2000. In addition to that, service occupations have increased, but workers get paid less. During the 1990s, companies went public to gain more funds to invest on growth. In order to satisfy stockholders, managers are forced to increase profits. Payroll led to less full-time employees and more contract or temporary employees. Recent government tax policies have helped investors more than low wage earners. Since there have been cuts in government regulatory agencies, there are fewer investigations of labor disputes. In addition to that, minimum wage remained the same until 2007. Since inflation increases price on basket of goods and services, lack of wage increase contributes to income inequality due to the value of their money that is decreased over the time. Technological growth also contributes to...

Find Another Essay On Income Inequality in the United States

Social Inequality in the United States

711 words - 3 pages Social Inequality in the United States There is a high degree of social inequality within the United States. Of most modern industrial countries, the United Stated has some of the richest and some of the poorest people to be found. That fact is very disturbing, however, explains why much of the inequality exists in the US. In the following essay I will explain to you about the inequality in our country and why it occurs

Income Equality in the United States? Think Again

1224 words - 5 pages Where do you think the United States ranks against other developed nations when it comes to income inequality? Most people think we are up in the top 5 after all we are the richest nation on the planet right? Now what would you say if I told you that America is dead last; Furthermore, that the top 400 earners in America have more wealth then 150 million of the poorest combined. The United States ranks 64th in the world on income inequality (i.e

Inequality in the Legal System of the United States

1970 words - 8 pages In the United States, true equality has never existed. From the Declaration of Independence to modern times, the U.S. legal system has failed in any attempt at equality. The ideology of "all [men] are equal but some [men] are more equal than others" has been present throughout the history of the U.S. (Orwell). Inequality has always existed in the United States legal system and continues to exist today; however, the inequality presently in the

The Issue of Overcoming Racial Inequality in the United States

3276 words - 13 pages The label of inferiority poses immense challenges on the structure of a society. Branding a group of people as “savages” creates divisions in society that drastically affects how individuals are supposed to interact with these “inferiors.” It makes you think of someone who is uneducated or unsocialized, one who is not granted full rights and privileges. Other words that might have the same the sort of connotation for many in the United States

Gap of Inequality Between Social Classes in the United States

748 words - 3 pages In the article “Confronting Inequality”, Paul Krugman argues that the gap of inequality between social classes in the United States is growing because of self- interest. He cites a “movement conservative”, Irving Kristol, who claims income inequality is not important because there is social equality. Krugman uses Kristol’s statement as a starting position to state his own. Krugman describes the claim as being a “fantasy world” and not the “real

Analysis of Income Inequality and Policy Representation in the American States by Patrick Flavin

729 words - 3 pages In his article “Income Inequality and Policy Representation in the American States,” Patrick Flavin examined differential policy representation based on citizens’ household incomes. Political Scientists and other scholars have compiled strong empirical evidence over the past 50 years proving that government policies tend to correspond to the aggregated political opinions of the public at both the national and state levels. Flavin hypothesized

United States of Inequality

2276 words - 9 pages Capitalism has been the central force behind the growth of the United States’ progressive economy. Within such advanced economic system the chances of economic disparity are significantly high. In fact, over the past three decades there has being a steady increase in unequal wealth distribution among the economic classes. To sustain the current unequal wealth distribution among the classes of the American population, there are numerous factors

United States Taxation on Worldwide Income

2894 words - 12 pages percent of all federal revenues came from corporate income taxes, of which about half was paid by multinational corporations reporting foreign income (CBO). Thus, many corporations are following suit, using tax avoidance schemes to reduce the scope of their U.S. tax burden or simply moving to other tax jurisdictions. The United States is one of only two countries in the world that taxes its citizens on their worldwide income, without regard to

Income Inequality in the US is Growing

623 words - 3 pages countries with Chile, Mexico, Greece, South Korea, etc. United States excessive inequality can be explained by its’ weak corporate governance lessening social structure, which leads to increasing gaps between the pay of the CEO or the top 1% and the ordinary workers. These higher ups are also great at avoiding taxes and pushing money into politics to benefit them. There is often more government power in cases where inequality is lower. South Korea

The Government's Role In Income Inequality

784 words - 4 pages earning a part of their wages because a part of their wages gets put into the low skilled worker's college funding. If the low skilled worker is already going to college and getting a job, that low skilled worker wont qualify for the optional deal. Last, to reduce the United States' income inequality, the government should give the rich a small tax that goes straight to people who don't make as much income as a married-couple household. The idea

The Income Inequality Gap

1383 words - 6 pages Recently, studies have shown that income inequality has many connections that have caused the gap in the United States. According to the research I found, income inequality is connected to corruption, trade, wages of workers, and education. The world income inequality had declined since the twentieth century according to the studies found (Clark). Corruption falls increasing on low income individuals more than higher income individuals

Similar Essays

Income Inequality In The United States

1043 words - 5 pages shifting out of the United States. Presently the bottom fifth of the socioeconomic ladder is taking much of the hit, this is one of the primary reasons for the rapid increase in income inequality. The systems and regulations currently in place let the rich pile up massive fortunes while the poor suffer the effects of the changes in the global economic climate. As wealth starts to shift into developing markets in the Middle East and Asia, especially

Income Inequality In The United States

4067 words - 16 pages characteristics of a democracy is that the citizens have the right to vote. In order for a democracy to work effectively the citizens do not only have the right to vote but it is their civil responsibility. Voting is necessary to protects the rights and freedoms of the citizens in a democracy. However with income inequality within the United States the number of citizens exercising their right to vote is few and far between. Only a third of

An Overview Of Income Inequality In The United States

2267 words - 9 pages A Brief OverviewOf Income InequalityIn the United StatesI. IntroductionIncome distribution has been critical issue in American society; more and more reports show that the inequality of income has dramatically increased in the last few decades, while the United States' Western European Counterparts are reportedly equal in terms of income distribution.1 When comparing the United States to European countries, America lags behind in terms of income

Income Inequality In The United States Politics Research Paper

696 words - 3 pages this has been proven to not be the case. The end result of a growing wealth gap will be impeded growth of the American economy. The United States is seeing a growing divide in educational investments based on family income and the results are apparent. Numerous studies have been conducted on how education affects income growth and income inequality, with most implying that higher education leads to higher income of an individual, and that