The growing wealth inequality in the US is now a major social issue. As such, academics, including sociologists and economists, have explored wealth inequality from various perspectives and found multiple responsible variables. For instance, the video, the Extent of U.S. Wealth Inequality, presents a dramatic extent of that imbalance by using graphic details to enhance understanding. In this assessment, three distinct factors responsible for the divide between the top 10% and the rest of the population have been explored (Wealth Inequality In USA or Rich vs Poor In America). Finally, the assessment presents two suggestions that can be used to reduce the gap.
- Changes in the national and global economy are responsible for the growing wealth inequality in the US. While actions of individual investors, specifically greed on Wall Street, have escalated inequality, social conditions considered as economic restructuring have led to widespread inequality. The economic restructuring reflects the ongoing changes in the US economy. Notably, previously stable jobs found in the manufacturing sector in the US have steadily declined, leaving millions of unemployed persons. Moreover, the US has grown to be the home of tech giants, which have led to a significant reduction of the workforce across various industries. Further, globalization and technologies have facilitated the outsourcing of jobs previously done in the US. Consequently, these jobs are now done in emerging economies at the lowest cost possible. Overall, many people previously employed, if they find jobs at all, now work for minimum wages with limited benefits. These changes in the US economy have largely contributed to the widening gap between the ultra-elite and the bottom class.
- Wealth concentration is another factor that has wealth inequality in the US (Damon 1). Wealth is generally concentrated in corporate shares and the personal wealth of the ultra-elite in the US. They control a significant fraction of the national and global wealth (Elliott and Pilkington 1; Matthews 1). The class has dominated wealth accumulation from one generation to the next while newcomers are relatively few.
- Gender and age factors have also largely contributed to social equality in the US. For several decades, there have been affirmative action and laws to protect women from pay variances. However, men continue to enjoy relatively higher salaries compared to their female colleagues for the same job. In the year 2014, for instance, it was noted that women were paid about 79% of what their male counterparts earned, reflecting a pay gap of 21% (Hill 1). While the gap continues to narrow because of increased women’s participation at the workplace, achievement in education, and slow progress of men’s salaries, there are still notable variations reflected across age, education, locations, and race. With the age factor, earnings tend to rise until they stagnate for women when they attain age 35 years (Hill 1).
One must appreciate that addressing social or wealth inequality in society is not a simple task. Nevertheless, multiple possible solutions have been offered.
- Effective fiscal policy is viewed as a critical tool for tackling wealth inequality (Dabla-Norris et al. 30). Fiscal policy can enhance macrofinancial stability and assist in controlling the impacts of economic crises, which have severe effects on the marginalized majorities. In this case, redistributive functions of fiscal policy can help in wealth distribution by addressing the growing income inequality, taxation, controlling tax avoidance and evasion, and reinforcing social benefits, such as savings.
- Education policies can increase the skill levels of many disadvantaged individuals. As such, they will be able to cope with the technological changes required at workplaces and increase their income prospects. These policies should target financial barriers that limit access to education.
Dabla-Norris, Era, Kalpana Kochhar, Nujin Suphaphiphat, Frantisek Ricka, and Evridiki Tsounta. Causes and Consequences of Income Inequality: A Global Perspective. 2015. Web.
Damon, Andre. “Growing Social Inequality in America. Wealth Concentration and Decline in Living Standards.” Global Research. 2014. Web.
Elliott, Larry and Ed Pilkington. “New Oxfam report says half of global wealth held by the 1%.” The Guardian. 2015. Web.
Hill, Catherine. “The Simple Truth about the Gender Pay Gap.” Economic Justice. 2016. Web.
Matthews, Chris. “Wealth inequality in America: It’s worse than you think.” Fortune. 2014. Web.
Wealth Inequality In USA or Rich vs Poor In America. Online video clip. YouTube. 2013. Web.