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What causes income inequality in America today - Essay Example

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Income inequality is an issue that is not only limited to the borders of developing nations. Nations that are well developed such as the United States even…
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What causes income inequality in America today
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Causes Of Income Inequality In America Causes Of Income Inequality In America Introduction The term income inequality is used to refer to the huge gap between the earnings of individuals belong to the same society. Income inequality is an issue that is not only limited to the borders of developing nations. Nations that are well developed such as the United States even experiences the destructive issue of income inequality. There are different reasons due to which the rich, middleclass and the poor class of the American society experience income inequality.
Body
The rich are getting richer and the poor are getting poorer and the main cause of this is globalization. Globalization has led to the creation of global companies which operate in different parts of the world. The benefit of operating global companies is that these companies do not only sell goods and services in their host nation, they even sell their goods and services in foreign nations. Even those individuals who work in these global organizations are paid more than what the middle-class and the lower class of the society is paid. According to The Economist, globalization has benefited global companies such as the one owned by Bill Gates and due to this the entrepreneur now owns a corporation that is worth $50 billion (The Economist, 2006). The same article states that people working in global companies such as Goldman Sachs earn an average salary of $500,000 (The Economist, 2006). These statistics show that companies operating at the global level and their employees earn huge amount of money and this has led to the unequal distribution of wealth between these companies and companies that are restricted to one certain region.
The middle class of the society has witnessed a decline in their income levels due increase in the number of jobs that have been outsourced and because of the failure to obtain employment by the children belonging to this class. According to Nytimes people belonging to the middle class perceive that college education can help them earn high but during the period of 2009 the number of unemployed college graduates was 9.2% (Nytimes, 2010). According to The Economist a huge number of white collar jobs such as accounting positions are being outsourced (The Economist, 2006). These findings clearly show that the college graduates who belong to the middleclass fail to attain employment as a result of their jobs being outsourced and due to this they end up earning less than the rich class of the society.
The middle class and the poor class of the society experience different reasons of income inequality. The poor class experiences income inequality because jobs that do not require skilled laborers are being taken away by the immigrant population and because this class fails to attain higher education. According to Rampell, the unskilled labor force is no longer being protected by the regulators and according to The Economist; immigrant population is taking away low skilled jobs (Rampell, 2011 & The Economist, 2006). Due to lack of protectionist policies, unskilled labor force is losing their jobs to immigrant population and due to loss of jobs they do not have enough money to pay for their children’s education and this leads to continuing increase in the income earned by the rich and the poor.
Conclusion
The rich are getting richer and the poor continue to downslide on the slope of the income. There are various reasons due to which the rich, poor and the middleclass is experiencing income inequality. The rich are earning more due to their global corporations and the people working in these organizations are earning fat salaries. The middle class has experienced loss of their white collar jobs due to outsourcing and the rate of unemployment amongst the college graduate population is increasing. The poor class is unskilled and they are losing their jobs to immigrant population and they are failing to provide higher education to their children.
References
Nytimes.com,. (2010). College, Jobs and Inequality. Retrieved 25 November 2014, from http://www.nytimes.com/2010/12/14/opinion/14tue1.html
Rampell, C. (2011). Inequality Rising Across the Developed World. Economix Blog. Retrieved 25 November 2014, from http://economix.blogs.nytimes.com/2011/05/03/inequality-rising-across-the-developed-world/?_r=0
The Economist,. (2006). Inequality and the American Dream. Retrieved 25 November 2014, from http://www.economist.com/node/7059155 Read More
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