The main idea of this article is that economic inequality has steadily risen in the United States between the richest people and the poorest people. American government tends to give less help to the unemployed than other rich countries. With the average American having a disposable income of $28,277, it is no wonder America has become the consumer nation that it is today (census.gov).
Every American dreams of finding a job that pays well enough so that they may comfortably take care of their loved ones and themselves for years to come. Most Americans hope to find some way to make a living that they enjoy, something that they view as productive. Unfortunately, many do not have this luxury. In our society, a good portion of the population is forced to hold the base of our country in place while hardly being redeemed for their time and effort, and thus the problem of income inequality. Numbers of these people live from paycheck to paycheck, barely getting by, not because they manage their money poorly, but because the value of their time at work is insignificant. Some may even sacrifice happiness at work to find a job that pays better simply because they cannot make ends meet at their current job. Some people sacrifice their sanity and eventually their life just to keep from going under financially. Segregation in income distribution is another cause of these problems, such as that with women or African-Americans who make less than other classes comparatively. Other causes of income inequality consist of globalization, the decline of labor unions and education.
In the 1970s, minimum wage was about 46% of the average wage. By 2006 the federal minimum wage fell to under 31% of the average hourly wage in 2006 and recovered to 37% in 2009. This wider gap has sharpened income inequality at the lower rungs of the economic ladder. (Smith, 2012, p. 17)
AAUW The Simple Truth about the Gender Pay Gap briefly addresses issues by going beyond the widely reported 78 percent statistic. The report explains the pay gap in the United States; how it affects women of all ages, races, and education levels; and what you can do to close it. The pay gap has barely budged in a decade. In 2013, among full-time, year-round workers, women were paid 78 percent of what men were paid. According to the AAUW the best place for pay fairness is Washington, D.C.; women are paid 91 percent of what men were paid in 2013. At the other end of the spectrum is Louisiana, the worst state in the country for pay equity, where women were paid just 66 percent of what men were paid. Women of color and other ethnic groups suffer the most in the pay gap.
It does not matter if women are a school teacher, a graphic designer or even a chemical engineer, women of every ethnic background and race suffer the pay gap. Women earn about the same amount as men until a certain age, then after that their earnings are decreased to about 75-80% of what men are paid. (AAUW, 2015)
The Equal Pay Act of 1963 makes it illegal to pay different wages to men and women if they perform equal work in the same workplace. (Dias, 2011) The basis of this law is that male and females are to be paid the same for the same type of work, and the law specifically addresses gender pay differences. If dissimilarity in pay is found, the employer cannot reduce the wages of either sex to equalize the pay they would only be able to raise the amount. Equal pay refers to the fact people should legally be paid the same amount for performing the same type of work, even if the job title is different. Unequal power results in unfairness, which may be a legal concern.
The decrease in the labor unions has a big impact on income inequality in society. There has been a dramatic decrease in unions since 1980 when it was at 20.1%; in the year of 2010 it fell to 11.9%; that’s almost a 50% decline. According to Stiglitz, “this has created an imbalance of economic power and a political vacuum.” (Stiglitz, 2012)
In the book The Great Divergence by Timothy Noah he reveals that while some economic difference is unavoidable and to be welcomed in a vibrant industrial society, the level of that inequality is now deeply damaging to American democracy. (Noah, 2012)
I would like to make a note on an approach to the subject of the relationship of inequality and the strength of the middle class and U.S. economic growth. The United States is a developed economy at the edge of the technological frontier, with the highest levels of income inequality it has ever seen. (Boushey and Hersh, 2012)
I have stated a variety of problems that lead to income inequality. The following is a short list of concepts to try and fix income inequality. The most important would be to take care of our young. They are our future so we need to nourish them, educate them, and keep them healthy. Make sure that education is affordable for our youths. Increase state support for public universities so tuition is not as expensive as it is and the middle class people can afford it.
We need to have policies that directly deal with inequality. The policy goal should not be to distribute the existing income but to allow the private sector to create more for all. Help out the middle class by having higher taxes particularly for the upper class. If this happens, the government could take the money from the taxes of the upper-class and help fund programs such as our public education. Tax breaks, subsidies, and loopholes should be limited to energy, medical and financial companies. Also as stated before labor unions has a big influence on income inequality. Union workers should be able to stand together and have a voice in their companies. They should be involved in decisions about how the company is managed.
Our welfare system could use an update to it which might decrease the income inequality. More and more people are actually abusing the system. People who essentially need to be on welfare are not able to get the assistance they need due to lack of funds. People who need to be on assistance, due to whatever reason, should only be allowed to be on it for six months to one year and then not be able to reapply for at least six months; unless they have a good reason to continue on. Some people are getting on welfare and then realizing that being supported by the government is much easier than going out and looking for a job.
So now the question is what can be done about income inequality? Should we be passive and just hope it fixes itself or actually take the necessary steps to cure the problem?
Every American dreams of finding a job that pays well enough so that they may comfortably take care of their loved ones and themselves for years to come. Most Americans hope to find some way to make a living that they enjoy, something that they view as productive. Unfortunately, many do not have this luxury. In our society, a good portion of the population is forced to hold the base of our country in place while hardly being redeemed for their time and effort, and thus the problem of income inequality. Numbers of these people live from paycheck to paycheck, barely getting by, not because they manage their money poorly, but because the value of their time at work is insignificant. Some may even sacrifice happiness at work to find a job that pays better simply because they cannot make ends meet at their current job. Some people sacrifice their sanity and eventually their life just to keep from going under financially. Segregation in income distribution is another cause of these problems, such as that with women or African-Americans who make less than other classes comparatively. Other causes of income inequality consist of globalization, the decline of labor unions and education.
In the 1970s, minimum wage was about 46% of the average wage. By 2006 the federal minimum wage fell to under 31% of the average hourly wage in 2006 and recovered to 37% in 2009. This wider gap has sharpened income inequality at the lower rungs of the economic ladder. (Smith, 2012, p. 17)
AAUW The Simple Truth about the Gender Pay Gap briefly addresses issues by going beyond the widely reported 78 percent statistic. The report explains the pay gap in the United States; how it affects women of all ages, races, and education levels; and what you can do to close it. The pay gap has barely budged in a decade. In 2013, among full-time, year-round workers, women were paid 78 percent of what men were paid. According to the AAUW the best place for pay fairness is Washington, D.C.; women are paid 91 percent of what men were paid in 2013. At the other end of the spectrum is Louisiana, the worst state in the country for pay equity, where women were paid just 66 percent of what men were paid. Women of color and other ethnic groups suffer the most in the pay gap.
It does not matter if women are a school teacher, a graphic designer or even a chemical engineer, women of every ethnic background and race suffer the pay gap. Women earn about the same amount as men until a certain age, then after that their earnings are decreased to about 75-80% of what men are paid. (AAUW, 2015)
The Equal Pay Act of 1963 makes it illegal to pay different wages to men and women if they perform equal work in the same workplace. (Dias, 2011) The basis of this law is that male and females are to be paid the same for the same type of work, and the law specifically addresses gender pay differences. If dissimilarity in pay is found, the employer cannot reduce the wages of either sex to equalize the pay they would only be able to raise the amount. Equal pay refers to the fact people should legally be paid the same amount for performing the same type of work, even if the job title is different. Unequal power results in unfairness, which may be a legal concern.
The decrease in the labor unions has a big impact on income inequality in society. There has been a dramatic decrease in unions since 1980 when it was at 20.1%; in the year of 2010 it fell to 11.9%; that’s almost a 50% decline. According to Stiglitz, “this has created an imbalance of economic power and a political vacuum.” (Stiglitz, 2012)
In the book The Great Divergence by Timothy Noah he reveals that while some economic difference is unavoidable and to be welcomed in a vibrant industrial society, the level of that inequality is now deeply damaging to American democracy. (Noah, 2012)
I would like to make a note on an approach to the subject of the relationship of inequality and the strength of the middle class and U.S. economic growth. The United States is a developed economy at the edge of the technological frontier, with the highest levels of income inequality it has ever seen. (Boushey and Hersh, 2012)
I have stated a variety of problems that lead to income inequality. The following is a short list of concepts to try and fix income inequality. The most important would be to take care of our young. They are our future so we need to nourish them, educate them, and keep them healthy. Make sure that education is affordable for our youths. Increase state support for public universities so tuition is not as expensive as it is and the middle class people can afford it.
We need to have policies that directly deal with inequality. The policy goal should not be to distribute the existing income but to allow the private sector to create more for all. Help out the middle class by having higher taxes particularly for the upper class. If this happens, the government could take the money from the taxes of the upper-class and help fund programs such as our public education. Tax breaks, subsidies, and loopholes should be limited to energy, medical and financial companies. Also as stated before labor unions has a big influence on income inequality. Union workers should be able to stand together and have a voice in their companies. They should be involved in decisions about how the company is managed.
Our welfare system could use an update to it which might decrease the income inequality. More and more people are actually abusing the system. People who essentially need to be on welfare are not able to get the assistance they need due to lack of funds. People who need to be on assistance, due to whatever reason, should only be allowed to be on it for six months to one year and then not be able to reapply for at least six months; unless they have a good reason to continue on. Some people are getting on welfare and then realizing that being supported by the government is much easier than going out and looking for a job.
So now the question is what can be done about income inequality? Should we be passive and just hope it fixes itself or actually take the necessary steps to cure the problem?