Why the Rich Are Getting Richer and the Poor, Poorer - Essay Example

Why the Rich Are Getting Richer and the Poor, Poorer Man has coexisted with the element inequality since time immemorial. There was a means via which man could create social clusters then inequality was always eminent. This social feature is sourced from political, social, economical perspectives. These three aspects have been a characteristic of society since the creation of the first social group. This then highlights the intrinsic extent of inequality. However, in the aim of maintaining the objectivity of this paper, economic inequality will be the principal focus. This is hinged on the fact that the main distinguishing element in the contemporary society is phrased in economic terms. The economic power and potential of an individual is used to elevate them into higher status. As such, the main rationale for this eventuality is the wage inequality of the contemporary society. A majority of the people are dependent, wholly, on the wages as their principal source of income. This translates to mean that changes in level of wage are bound to instigate a change in economic capabilities of the household. In this way, the rich continue to increase their wealth while the poor continue to struggle out of economic troubles that are continuously becoming difficult. In the endeavor of explicating on this pertinent issue, this paper will expound on the complexities of this subject matter. As such, it will include the work of Richard Reich, which tackles this issue. Economic inequality is at times regarded as an intrinsic element that cannot be removed. However, with the proper policies and attitude changes, this much needed realignment will be eventually be realized. In the absence of this, the level of inequality will continue to increase rapidly. The existence of inequality is imperative for the growth of a society. This is hinged on the rationale that this inequality is at times an element of motivation. As such its absence will lead to many looking for external motivating factors to work hard in life. There is always going to be those individuals I society who does not want to work hard like the other kinfolk. As such, with persons such as those in the society, it is a remarkable feat to counter the effects of such behavior. These assertions do not signal the absence strategies and subsequent policies that have been structured to aid in the reduction in the level of inequality. Rather, these assertions propagate the notion that these pre-existing policies are not efficient towards realizing this goal. As such, there is a need to offer fashion new strategies and polices that have a higher probability of realizing this goal of equality reduction. However, prior to embarking on the exercise of strategizing, it is essential to understand, first, the complexities of economic inequality. Robert Reich dedicates his article, “Why the Rich Are Getting Richer and the Poor, Poorer” to this increasing economical gap between the upper, middle and lower class of people. To this fact, he employs the use of metaphors that are characterized by three boats. He continues to assert that these three boats are rising and falling. The rate with which these boats are sinking is varied. Additionally, it is dependent on the occupants and their role in corporate America (Reich 309). The boat representing the workers involved in routine processes is sinking at a rapid rate. The second boat represents the in-person servers and its rate of sinking is slow. However, in contradiction to the two previous boats, the third boat is rising steadily. This boat represents the symbolic analysts. Instead of simply stating the members of each boat and their respective rate of sinking, Reich gives the adopted rationale for the theory. The rapid rate of the first boat of routine workers is because of outsourcing initiatives employed by American firms (Reich, 310). What is referred to as cheap production alternatives is detrimental to the welfare of these routine workers. American firms, and many international firms, are resorting to outsourcing their work to world countries that offer high returns and reduced operational costs. However, what these firms do not realize that they are instigating a vicious cycle that will negatively affect, in the end, the profits they are so determined to increase. However, the rate of outsourcing does not seem to be precipitating an eventual return to operational normalcy. Advances in the state of technology characterize this post-modern period. The existing technology and the proposed future technologies have the power to improve the lives of those who learn and understand the respective usages. However, aside from this positive impact, technology also has negative impacts; production workers have significantly felt these impacts. The level of technology is rapidly rendering their services and experiences redundant in application in the contemporary society. This is a sad eventuality for the people who have dedicated their lives to unique technical abilities only to be retrenched and replaced by intelligent machinery. The second boat is that of in-person servers. Reich asserts that this boat is sinking at a much slower rate as compared to the production workers. This is hinged on the rationale that these jobs are still in high demand in the society. This is in addition to the fact that after loss of employment of the production workers, they resort to in-person services: who are best exemplified by waiters, hotel attendants and secretaries. However, in person services are not restricted to these occupations. The third and last boat represents the symbolic analysts. Unlike the two previous boats, this boat is rising steadily. Reich asserts that these jobs have the best potential for long-term employment in additional to high wage levels. As such, these jobs will not be affected by the economic downturn. He exemplifies these jobs by citing entertainers, management consultants and scientists among the elite class represented by this boat. According to Reich, these boats are a manifestation of the gap between these social classes. It is imperative to point out that this clear distinction between classes was not always evident. During the mid century, there was an even distribution of social classes. Additionally, the distribution of money was evidently evenly distributed through the social classes. However, a significant transformation was witnessed in the 1990s. This situation continued up until the global financial meltdown of 2008. As such, this period culminated in unprecedented inequality levels (Levy, Frank and Murnane 1342). When the assertions propagated by Reich are analyzed at a deeper level. It becomes clear that he is insinuating that the American economy is not dependent on the American people. He believes that the economy has been acting on an independent basis given the adverse impact its dependence on the American workforce has created. Prior to the creation of different boats, when the whole of America occupied a single boat, the economy was performing well and the same can be said of the people. This relationship can best be illustrated by analyzing the limits of corporate world. The executives of the corporate world could not arbitrarily lower the wage levels of the production workers. This is because the adverse impacts of this measure would be detrimental to the performance of the market. This is hinged on the rationale that this measure would limit the potential purchasing power of the lower class. Therefore, a situation of insufficient purchasing power would be created. The verity of the matter is that the introduction of machinery into the production facilities has a lot to do with the economic downfall. The firms have employed the use of machinery to save on production costs. However, these firms do not factor in the long term impacts of such an endeavor. These machines are robbing the population of employment opportunities. Unlike the people who will work with these firms and in turn buy commodities produced by these firms, machines are only characterized by one-sided relationship of this imperative dual relationship between firms and the workforce. This situation culminates in a rapidly deteriorating economy. As such, the link between the corporate executives and the working population was severed. Reich explicates that there were mechanisms that were established to ensure that the wage levels of the lower class would not dip past a certain level. This was primarily hinged on the rationale of maintaining the ability of the lower class to purchase commodities produced by these corporations. As such, as the rich were continuingly building on their riches, the power had to endure the plight attributed to the low wage level, which in turn was making their economic power deteriorate. The article by Reich is somewhat a precise description of the contemporary society. The gap between the social classes is becoming increasingly evident with the passage of time. The distinction between the social structures is significantly evident, and is subsequently a rift is being fashioned among the members of these social classes. The rich are getting richer by suppressing and taking up all the job opportunities of the production workers. In this eventuality, the rich assume that these production opportunities are their own and thus, handle them as they please. In most scenarios, the rich relive production workers of their jobs. In their place, they put high performing and efficient machines. In addition, to this, American production workers are facing steep competition from immigrants (Wolff 15). There has been an increase inflow of immigrants into the United States. The rate of immigration is steadily rising. As such, this situation does not seem to recede any time in the future. When these immigrants come into the United States, they are in dire need of employment opportunities. As such, they offer cheap labor that is otherwise unattainable for the corporations. Therefore, employers are significantly inclined to hire immigrants much to the detriment of employment opportunities of Native Americans (Wolff 16). This is the rationale for increasing extent of job losses for Native Americans. These immigrants are continuing to increase the wealth of the rich while acting to the detriment of the welfare of the lower class Americans. If this situation is not curtailed early enough, the eventuality will be an America with a filthy rich class and an extremely poor lower class. Despite having the power to aid the poor out of their misery, the rich are acting in utter oblivion of the existence of this plight. This situation necessitates the need to adopt a different approach to finding a solution. Every single member of the society has one idea or two on how to generate money and thus afford the lives of their dreams. However, there are very few who are willing to take the necessary steps required to achieve this goal. In typical circumstances, the risks associated with such ventures are significant and thus noteworthy. As such, only a limited number of people will take the necessary steps and brave the risks of failure in order to realize their dreams and subsequently generate money. It has been sort of a wonder why a select clique of individuals is able to realize their dreams. Strictly, in the context of economic success, these individuals do not conform to the stereotypical forms of 9 to 5 jobs. They are masters of their own destiny and thus do not conform to societal norms and expectations. The fact is that all people have an innate potential of realizing financial freedom. However, hard work is imperative for financial success that lets most people down. Most production workers do not love their jobs rather they simply have to contend with the routine task. This is a detrimental element. This is hinged on the rationale that it is only when a person loves his job irrespective of its nature, will an enabling environment for success be fashioned. An additional reason for why the rich get richer while the poor continue to experience increasing poverty is pegged to the level of opportunities that are available to both social classes (N.D 80). The rich have better access and higher probability of getting industrial jobs at executive levels. Additionally, they have higher salaries than the lower class. As such, they have an opportunity to save a significant percentage of their wages. With time, these individuals climb the corporate ladder and thus attain better services and rewards than before. This is contrary to the situation facing the lower class. They have limited opportunities of finding gainful employment. In addition, their chances of scaling the corporate world are slim to none. They have low wage levels that cannot allow them to save their incomes. An angle that can be modeled to reflect this situation is that the rich initially had advantages in life as compared to those individuals born in the lower class. This debate has been wide and varied. Proponents argue that those born with silver spoons have more chances and have an unfair advantage when engaging in the real life perspective. It is not arguable that unfair advantage does indeed exist. However, the extent and value of this unfair advantage are the source of conflict. The fact that there are people who have defied this rationale is testament to the suspect nature if this theory. This ushers in the need to develop an alternative theory to explain this situation. The most applicable theory is that of the impact of choices made throughout life. The discussion on growing inequality levels has to be principally in the context of income levels. This is hinged on the rationale that there has to be income in the society to enable the creation of wealth. In the absence of income, the creation of opportunities will be futile (Moyers 13). The fact remains that rich and poor people will always characterize the American capitalist economy. It is not really the result of actions committed by either class but the workings of the American economy. Some years ago the wage gap was acceptable. However, in the contemporary setting, the wage levels of a majority of the working class have stagnated. It would be flawed to analyze this thesis in the absence of elucidation on the impact of the recession. This eventuality had a toll on all of America. However, the rich were better placed to recover steadily. This is owing to the fact that the spread their wealth across different income generating avenues. The same cannot be said for the lower and middle class who did not have the ability to spread their wealth. As such, when the market crashed, their wealth evaporated. With this eventuality, the obligation for wealth generation is left solely as an endeavor of the rich. Contrary to popular belief of equal opportunities in America, there is a distinct inequality in opportunities. This is the main cause of a disparity in the income and wealth of the rich and poor. There is a perception harbored by the American population that what is needed is hard work and motivation and success will essentially be forthcoming. However, these rationales do not take into account the factor of mobility and unequal distribution of opportunities. In the endeavor of providing solutions to this subject, the issues of mobility and evident lack of opportunities must first be addressed. In order to realize this, there needs to be a joint effort between the public and private sectors. With regard to job mobility, there needs to be an increase the initiatives for job training programs that are widespread in the country. The incentive should be tax reductions for those firms that engage in these programs. Additionally, firms must be willing to increase wage levels after their training programs have yielded qualified candidates. Work Cited N.D. "Chapter Five: the Widening Gap between the Rich and the Poor in Capitalist Society." Chinese Economy. 8.4 (1975): 78-99. Print. Levy, Frank, and Richard J. Murnane. "U.s. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations." Journal of Economic Literature. -. 303 (1992): 1333-1381. Print. Moyers, B. "How Wall Street Occupied America Why the Rich Keep Getting Richer and Our Democracy Is Getting Poorer." Nation New York. 293.21 (2011): 11-14. Print. Reich, Robert B. The Work of Nations: Preparing Ourselves for 21st-Century Capitalism. New York: A.A. Knopf, (1991): 308-316. Print. Wolff, E N. "The Rich Get Richer... and Why the Poor Don't." The American Prospect. 12 (2001): 15-16. Print. Read More