Income Inequality in United States

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Income Inequality in United States

Inequality refers to the unfair distribution of resources within a community, and this can be such that some groups in society receives more opportunities than the others (Pigou). In the United States, the state of inequality is greatly evident even though the American dream still deems to reign in the country. There has been a widening gap between the rich and the poor as well as the young and the old and to which has largely been ignored by the policymakers. The America dream aimed at providing equal opportunities for the people to thrive, but this has just been a dream as there is nothing like an equal opportunity for all. The realization of the American dream, therefore, has just been a scam that only promises better things only to deliver the worst part of it.

Income inequality is one of the biggest issues that face the American nation in the present day (Omi). A large number of people have been separated by the thin lines of poverty while the rest are rich and this triggers the question as to whether the income inequality is that bad. Income inequality has been on the rise at an alarming rate. According to statistics, 400 wealthiest individuals in the United States have more wealth compared to the poorest Americans that rage to around 150 million combined and this imply that the top individuals that contribute to 0.1 percent of the population of the united states are worth more than the rest of the people at the bottom, that is 90 percent (Formisano).

According to Teixeira, “The economic growth has done far much better than any redistributive program could. Focusing on income inequality doesn’t help the poor” (Teixeira, 306). Teixeira argues that capitalism has the ability to promote economic growth and this works due to the provision of incentives whereby the incentives naturally result in income inequality. Despite the rise in income inequality, Teixeira argues that all the members of the society in the American nation are better off with capitalism. And therefore, according to Teixeira, the increase in income inequality doesn’t really matter, and therefore income inequality isn’t that bad.

Teixeira argues that capitalism has played a crucial role in the alleviation of poverty. She says that “Almost two billion people have been pulled out of poverty by capitalism alone” (Teixeira, 306) and this postulates that she is of the idea that a nation is more comfortable with a few wealthy individuals than having an economy whereby everyone has equal opportunities. Teixeira thus argues that “it is the best poverty program that the human mind has ever created” (Teixeira, 306). She thus disputes that capitalism promotes the exploitation of the poor people in a country, but instead it helps in alleviating poverty, as according to her, the problem is poverty and not the income inequality that faces the people in the American nation.

Teixeira argues that “It is the obvious moral imperative to take care of the poor” and as well provide the poor with dignity in the attempt to aid them out of poverty. According to Teixeira, she is of the perspective that only capitalism would have the capability of providing solutions of helping the poor out of poverty, of which the income inequality isn’t able to eliminate the poverty. According to the arguments brought forth by Teixeira, she doesn’t clearly explain how the issue of poverty can be solved without addressing the problem of income inequality.

According to statistics, socio-economic status is a strong predictor of the academic as well as the economic success of a country, and it is for this reason that the poor have been pushed to the edge, being more disadvantaged in the chase of the American dream due to income inequalities (Teixeira, 306). Despite believing in capitalism, to solve the problem of poverty, the imperfect system that focuses only on capitalism needs to be repaired to accommodate also the address to income inequality. Positive capitalism that is aimed at addressing and helping the people out of poverty is highly acknowledged, but despite that, it would be an act of irresponsibility for the failure to address the flaws of income inequality.

The idea that is perpetuated by capitalism is that the rich in the society work harder and this perpetuates inappropriate stereotyping about the poor (Obama, 308). It portrays a picture that the poor in the society are lazy and stupid and due to that, they deserve to be poor. Capitalism makes villains out of the poor, and this portrays a negative image about a people that the American dream argued that all people in the society have an equal opportunity in the realization of their dreams. It is therefore important that people be more vigilant in addressing the issues of poverty in that they should not forsake to address the issue of income inequality with the mere grounds that they have not experienced it by themselves. The reason is that the personal backgrounds of a person influence their perception on how they view things and therefore if a person hasn’t been faced by the issue of income inequality, they should not just ignore it but have to reconsider the other people’s opinions.

The American dream provides for equal opportunities for all, and therefore everybody has a fair chance of attaining college education (Teixeira, 310). Education has the ability to benefit the whole society as it is not a resource that is subject to devaluation as more people are granted access to, and therefore every individual should be granted an equal chance to education no matter their social, economic class. Education is not a privilege but a right, and therefore everybody should have access to college education whether or not they are poor. Providing equal chances in education plays a significant role in reducing the problem of inequality in society and therefore aids in the achievement of the American dream.

Other than income inequality, there are other types of inequalities that define the United States at present times (Formisano). One of them is the wealth inequality that is as a result of unequally distributed wealth. There has been a growing income inequality in the united states that is a reflection of the many trends as well as many of the same cause as the increasing income inequality. There have been challenges that arise in the measurement of wealth inequality in particular and this is because there has not been an accurate way to which the wealth could be tracked just like income is subjected to, the trends in the wealth inequality thus are concentrated among a small number of households.

The American dream set the pace for every citizen in the united states to possess and acquire wealth on the same basis. Therefore, according to the claim by the American dream, every person in the country is entitled to an equal opportunity to acquire wealth. But this has not been the case since, in the United States, wealth is concentrated and acquired to a small number of people who are and have been at some time in the power range of the country implying that they held senior positions in the government or controlled various strong sectors of the American economy (Omi). The wealth inequality, therefore, has been as a result of the disparities that arise in terms of income distribution. Income is the basic building block for wealth and therefore if an individual or a certain household is entitled to a lesser income than the other, it will have an overall impact on to the households as one of them will have much less wealth accumulation than the other.

Wealth inequality as well can be attributed to the spending and nature of saving that a household does possess. Poor saving is a prerequisite to low wealth as it means that a household is overspending and this has the implication that their net wealth will reduce. Better saving skills mean that the household is able to keep something or own something not necessarily on a monetary basis but also as assists. The more the assets, the more wealth an individual or a household is and therefore, the spending habits determine the overall wealth in a household. In the United States, the aspect of wealth inequality is vivid and has been as a result of the above factors that include poor saving behavior as well as the increased spending on unnecessary items that don’t count in the wealth measurement.

Opportunity inequality has as well been evident in the United States, and this has been prevalent across the nation (Pigou). The typical arguments that the rise of inequality is due to the normal economic competition is based on the notion that competition for the unequally distributed rewards encourages the production. But when the inequality becomes so entrenched such that it crosses the generations and as well limits the opportunity, it tends to narrow down the pool of human capital that is capable of competing. With such an example of throttling opportunities, there is significant distress in the economic growth, and this has the impact of prohibiting the potential investors and workers from participating fully in the economic growth as well as on the productivity growth.

Moreover, in case the entrenched interests are able to limit future competition through such as acts such as influencing policymaking processes or as abusing the market power, the dynamism as well as well as the firm’s entry decreases. The presence of the opportunity inequality has an implication to working the wrong way for both efficiency and equity. In the United States, opportunity is one of the factors that can be attributed to causing income and wealth inequality. The main reason is that, with fewer opportunities in a country that has a population of millions, it means that the population is entitled to fewer chances of being employed or even the opportunities of firms introducing themselves into the American market. The lack of ample opportunities leads to more people being left out of being in the payroll, and this leads to most people living below the poverty line while others live slightly above earning just enough to keep them hopeful for the next day.

Income, wealth and opportunity are all related in that one of them lead to the other. Opportunity leads to income and to which in turn contributes to the wealth of a household. Other inequalities such as in the access to education and health opportunities result due to the reduced income among the populations making them unable to access the much needed and basic services. Health and education are significant in the life of a person, but it requires money to fund a person’s education and as well paying for the bills in hospital. With low income and fewer opportunities, there is a high opportunity of deprivation of the services due to the inability to pay.

Inequality in the united states, therefore, has taken a diverse range contributing to other types of inequalities. Wealth inequality leads to the division of the social system splitting the community into classes according to the amount of wealth owned. The achievement of the American dream has been far from reach as the inequalities continue to increase despite the promise by the American dream of better America where everyone is provided with equal opportunity for growth and prosperity.

Work Cited

Barack Obama. The defining challenges of our times. From a speech delivered on December, 2013.

Formisano, Ronald P. Plutocracy in America: How Increasing Inequality Destroys the Middle Class and Exploits the Poor. JHU Press, 2015.

Mimi Teixeira. Is income inequality really is that bad.

Omi, Michael, and Howard Winant. Racial formation in the United States. Routledge, 2014.

Our Battered economy. Is the American Dream over?

Pigou, Arthur. The economics of welfare. Routledge, 2017.