The distribution of income in the United States is to great extent skewed. In particular, according to the 2007 census, top 20% of the population own 93% of the total wealth, whereas the other 90% of Americans have to share 7% of wealth (Domhoff, 2010). A decade ago, in 1998, the wealthiest 20% owned about 90%, whereas the other people had a “piece of pie” of 10%, so the gap has grown over the last years and nowadays reached the Great Depression (1920s) level. In addition, top 20% of Americans have 65% of total income received in the country. Moreover, the “bottom” 90% of people are accountable for 73% of the total debt. However, extreme poverty is a more widespread phenomenon, as compared to extreme wealth, because only about 1.5% receive $100,000 or more in inheritance (and can be classified as extremely rich), whereas about 12% live below the poverty line (Domhoff, 2010). Thus, the gap between the rich and the poor is growing.
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For the society in general, the growing gap between the rich and poor means in simpler terms that the rich are increasing their wealth, whereas ordinary people are becoming impoverished. In my view, class borders in the society become more rigid and it is increasingly more difficult to “upgrade” from the lower social class due to the restricted access to labor market. The direct result of declining income of already disadvantaged individuals is embitterment and growth of criminality rates, prostitution and violence. This tendency is also associated with unequal access to health care, a number of citizens who have no job or low-wage jobs without the regular social package are becoming outsiders in this system.
The USA is also the world’s primary giver and is known for the extensive charitable activity directed to other countries. Countless national foundations are established to combat AIDS, the problem of famine in Africa and India, helps civilians in the zones of military conflict or cope with the outcomes of emergencies (such as recent devastation of Haiti and Chile). Governments as well as citizens willingly contribute to the programs of international organizations, but overlook the problems of poverty, lack of safe housing, joblessness inside the country.
Furthermore, most of the programs and policies of the government allegedly intended as a solution for the problem of poverty are excessively paternalistic by their effect of the population. I believe that instead of helping individuals get worthy education or job, the government simply increases financial allowances and non-material benefits for the poor. For instance, negative income tax (or paying additional money to poor families instead of imposing taxes on them), Aid to Families with Dependent Children, Food Stamps cannot be viewed as a remedy for the problem of poverty in the long-term perspective. They might support citizens in tough conditions, but give them no skills of supporting themselves.
In the American society, characterized by conspicuous consumption, there is another threat which results in the growth of income gap. In fact, media and advertising which promote the culture of consumption, can be accounted for causing people from risk groups to buy the products which they actually do not need. As I noticed, before 2008, when people could not afford an expensive and widely advertised “toy” such as hi-tech devices for home, they were offered a bank loan. After the collapse of the banking system, a number of consumers lost their jobs but still had considerable debts. Therefore, extensive consumption, presented by the media as a path to comfortable and careless life, appeared to be another trap for consumers.
In my opinion, the major cause of inequality lies in the economic domain, particularly in the mode of production. More precisely –supply and demand vary across professions and regions of the country. This means, the circles which control the largest markets (e.g. international entrepreneurs) are fully entitled to decide which type of employees they need; therefore, they can make decisions concerning the modernization and automation of their business which might result in the reduction of workplaces for non-qualified wage (blue-collar) workers and creation of new positions for employees with IT background and several higher educations. In general, technological progress is often blamed for the reduction of places for manual workers, which has been happening for the last 30 years in connection with computerization and automation. The growth of supply in certain market areas is associated with high unemployment for the corresponding groups of workers and decrease of average wage in the segment. In general, “capitalists” feel free to set wages for their employees, and nowadays the highest income and best career opportunities are enjoyed by employees with university education who have been continuously improving their professional level.
Another factor contributing to the uneven distribution of wealth is race (or ethnicity). The annual median household income of White Americans was about $50 thousands in 2006, of African Americans – $30 thousand, of Hispanic Americans – $35 thousand (Domhoff, 2010). African Americans are generally more likely to experience poverty, this tendency is associated with considerable racial segregation: “Our fundamental argument is that racial segregation – and its characteristic institutional form, the black ghetto – are the key structural factors responsible for the perpetuation of black poverty in the United States” (Butler and Watt, 2007, p.94). Such communities are characterized by lower access to education and “desirable” social infrastructure including health care institutions and workplaces with higher wages. In such conditions, educational attainment of the growing generation is generally lower in African American communities as compared to the other circles.
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Furthermore, I admit that in the existing labor market success and economic well-being are “granted” not to the fittest (like in Darwinism), but to the most flexible and motivated workers. Those who are ready to dedicate themselves to the profession, regularly “update” and “refresh” their knowledge and skills and, importantly, are ready to move to another area of specialization after the decrease of demand for their original profession, are nowadays more likely to succeed. Labor market is changing rapidly, and only those employees who keep their knowledge up-to-date and have genuine interest in development in the selected area, will be able to maintain their income at the desired level. Furthermore, some of the experienced professionals with education (or training) in entrepreneurship further establish their own small businesses, thus automatically shifting to the category of “capital owners”.
As one can conclude from the above presented examples, it is important to recognize the role of education and individual abilities (or at least motivation) in economic prosperity. As a rule, the higher level of education the person receives, the higher their income will be (Neckerman, 2004, p.39). Master’s degree or MBA are today the basic requirements for highly-paid positions, due to the considerable complexity of the work. College and university education are available to all students who demonstrate good academic performance during school years, so economic success ultimately depends upon individual motivation and life orientation. Owing to the existing welfare system and legal regulation of employment and wage policy, even “poor” people have the opportunity to live in relatively comfortable conditions without any special training. If they are satisfied with this quality of life or fail to do anything to improve the existing conditions, it is possible to conclude that apart from all economic and social factors, the final decision concerning one’s own economic prospects to great extent belongs to the person.
Domhoff, W. “Who Rules America? Wealth, Income and Power”. 2010. Web.
Butler, T. and Watt, P. Understanding Social inequality. SAGE, 2007.
Neckerman, K.. Social inequality. Russell Sage Foundation, 2004.