Introduction
Equality is the synonym of “ideal society” to some extent. Equality is the basis of socialism. However, there is not an ideal society, and the term economic inequality is more suitable to describe reality. The video called Viral video shows the extent of U.S. wealth inequality demonstrates how the wealth is distributed in the United States of America (White, 2013). There is the great divide between rich and poor people in the United States. The top 1% of American people has more the country’s wealth than 90% of the Americans. It is called economic inequality. The paper is aimed at the investigation of the essence of economic inequality in the United States, factors that has led to such a divide, and possible solutions to reduce the gap.
The wage gap
There are a lot of reasons for the gap between rich and poor people. The factors that are considered to be causes of economic inequality are often interrelated. The most important cause of wealth inequality is different wages and salaries. Capitalism is the social system of the United States of America. Capitalism implies competitive markets, private property, and wage labor. Supply and demand are the foundation of the capitalist market, and they play a key role in the determination of wages. If there are a lot people who are ready to do some jobs, it means that there is a high supply. Whereas, if there is a lack of people, who wants some work to be done, then demand is low. Thus, the situation when demand is low and supply is high leads to low wages. On the contrary, low supply and high demand result in high wages. It can be said that economic inequality directly depends on wages because due to the wage gap, wealth inequality exists among workers.
Technology
Apart from wage inequality that is micro level factor, some macro level factors are to be considered. Humanity lives in the time of rapid technical progress. Technology is an essential part of today’s life. It is worth mentioning that technology has a significant impact on employment and economic situation in general. According to Lee and Rodrigues-Pose (2016), “tech-employment is unlikely to benefit those at risk of poverty, meaning that tech-led growth will instead result in inequality” (p. 3). Nowadays, technology tends to replace low-skill workers. What is more, due to technical progress, a lot of United States companies send jobs to countries where the cost of labor is lower. Thus, the wage of low-skill workers has decreased, and economic inequality has increased not only in the United States of America, but also all across the globe.
Social factors
Another factor that influence the gap between rich and poor American people is changes in modern society. American people tend to marry people from a similar social class. Keely (2015) states that “today, in about 40% of working couples, both partners have very similar earnings; in the early 1990s, the proportion was about 33%” (p. 51). The female employment rate is increasing gradually today, and it has led to a dramatic decrease in the gender employment gap. Due to these changes, a man is more likely to marry a woman from a similar social background. Besides, the rise in the number of single-parent families is another social factor that has an impact on economic inequality. Keely (2015) underlines that “more than a quarter of families are led by single parents in the United States of America” (p. 52). It is worth mentioning that a single-parent family is more likely to be low-income in comparison with full families.
Suggestions
All in all, the gap between rich and poor people is one of the most burning problems in the United States nowadays. In order to reduce the gap, some steps should be taken. Firstly, it is important to consider the minimum wage. Today’s minimum wage is lower than it used to be 50 years ago. If the minimum wage was 12$ per hour, the situation would dramatically change for the better. Apart from this, taxation is to be paid enough attention. The rich are earning much more money than ordinary people. Obviously, they have to pay more taxes. Moreover, the government should use these tax money widely. For instance, it is necessary to fund such social programs as education program to reduce the gap. Besides, taxes on investment income are to be the same as taxes on other income.
Conclusion
To sum up, economic or wealthy inequality is the gap between the rich and poor. Economic inequality is one of the most urgent problems all over the world nowadays. For example, the top 1% of American people has more the country’s wealth than 90% of the Americans. There are a lot of factors that contribute to the widening gap between rich and poor such as the wage gap, globalization, and different social factors. However, there are some solutions to fight economic inequality. The increase of the minimum wage and establishment of effective tax system are examples of such possible actions.
References
Keeley, B. (2015), Income Inequality: The Gap between rich and poor. Paris, France: OECD Publishing.
Lee, N., & Rodríguez-Pose, A. (2016). Is there trickle-down from tech? Poverty, employment, and the high-technology multiplier in US Cities. Annals of the American Association of Geographers, 106(5), 1114-1134.
White, C. (2013, Mar 03). Viral video shows the extent of U.S. wealth inequality. Web.