Economic Inequalities in the United States - Research Paper Example

? Economic Inequalities in the United s Economic inequality in the United s exists between the existing different groups. These include; the high class and the low class groups. The lower class mainly comprises of the racial and ethnic minority group, women, and the handicapped. Economic inequality resulted from several factors such as; the difference in the wealth and income of individuals, the higher class influence on the government, lack of unions and reduction of tax on progressive income. The resulting consequences of economic inequality include; separation of the two groups both socially and physically, and unfair distribution of opportunities. The wish of most Americans is to bring the economic equality to an end. The society has been involved in the search of the possible social solutions to the increased inequality. The possible solutions include reducing taxes on the income of the low class group, increased taxes on the wealth and income of the high class group and adjusting the social security tax. Social nature of the problem Economic inequality exists in the United States due individuals having varied amount of money, power or even prestige. This problem creates different social classes among the people. Individuals in higher classes enjoy higher income and have continued to accumulate their wealth, while the lower class individuals in the society incur higher rates of taxes on their low income. As inequality in terms of resources widens, individuals with more wealth have become powerful and are be able to attain their goals. They will be able to accomplish their vested interests at the expense of the lower social class individuals. They are also influential in the society and are powerfully in making different decisions. Inequality in income results from several causes, some of these causes are relatively clear, others unknown and others are still under dispute. The basic cause of household income inequality at a structural level is variations in the yearly hours worked per household. It can be broken down into the product of the total number of workers, the yearly weeks worked and the weekly hours worked. This is a very significant factor among individuals in the lower class level. However, it remains minor among individuals who belong to the higher class. Beyond the total hours individuals have worked, income inequality arises out of; the variation of the income rates per hour and the income which has not been earned, these differences is mainly due to differences in the education level. Income inequality is common in the United States due to the variation of an individual position in terms of responsibility, its importance and the complexity. Income remains to be a common form of compensation. In most cases the market value is reduced by abundant supply hence, income is increased significantly by the possession of scarce skills. The most common source of income among the lower class individuals in America is not occupation but the government welfare. Causes of the problem There are several causes of economic inequality in the United States. These include; difference in the individual’s wealth and income, most individuals depends on the income they get from their jobs. Others however, benefits from both their job’s income and their wealth. The big problem is that those with higher sources of income get larger percentage of increase than those with little income. The wealthy are able to accumulate their wealth and income for several years unlike those with little income and no wealth. This creates a wide gap between the two groups of individuals. Those who are wealthy are in a position to vie for political offices and invest more money in order to win. They will also be able to interact with other individuals of the same class and who also have similar power and interests. Another cause of inequality in the capitalistic society is that there is an existing belief that the government influence has to be maintained at a minimal level (Sen and Foster1997). When the government is kept at a minimum level then there will no need for people to pay much tax. The wealthy individuals in the society are in a position to maintain more of their wealth due to the minimized taxes hence, increasing inequality. Following the minimal tax revenue received by the government, there will be no adequate resources to provide proper services such as the health care, this leads also to increased inequality. The wealthy stores their resources while those with moderate income get limited services like the foods stamps, medical care and even the student loan. Another cause of inequality is the level by which the wealthy individuals influence the government to reduce tax on progressive income (Wilkinson and Pickett, 2009). In the case where the tax system is less progressive, the wealthy people will be pay minimal tax and will retain more of their money leading to increased inequality. The wealthy having more money and existence of good network connections, will be able to influence higher public officials unlike those of lower classes. They will be influential on how individuals are taxed. Even though they do not make the final decisions they are in better positions than individuals of the lower classes. Therefore, it is in the interest of the rich to have a government with fewer responsibilities so that minimal taxes will be required. Through this they will also be able to justify the lower progressive income tax. Other taxes that widen inequality in the society include the sales tax. A sales tax is a regressive kind of tax, and in most cases the low income people pay more percentage in their income taxes than those of the wealthy people. An example is a higher sales tax on the basic needs. It means that those with little income will pay higher percentage of the sales tax from their total income for these products than those with higher income. Therefore as the sales tax increases, the inequality will also rise. Another cause of increasing inequality is the lack of unions among individuals who are employed in industries and several other businesses. The low income earners will not get protection for their financial interests. Those at the top positions in various companies will therefore maintain higher percent of the profits for themselves because employees cannot join together to fight for their rights. Workers in the United States face difficulty in the establishment of unions because most companies have transferred their plants outside the country in order for them to benefit from reduced costs from the low wages, and nonexistent retirement and health care benefits. This way they generate more profits and pay the top management well and also provide shareholders with larger dividends. However the American workers who work in these locations may lose their jobs and other benefits hence creating more economic inequality. Those affected by the problem Those affected by the economic inequality are those from the racial and ethnic minority group, women, those from certain religious groups and the handicapped. They have been hurt because they are discriminated and are not given equal opportunities like the rest of the American citizens. The levels of income have continued to be low among the female unlike that of men. The income a level of certain racial demographics is lower than the national median. Even though gender and racial inequalities have been dealt with progressively, a number of social scientists perceive the variance in income to imply continuity in discrimination. The wage difference has also been attributed to the choices and preference of women. In most cases when women are seeking for employment they consider several other factors and not necessarily salary. Majority of the women do not have the will to relocate or to travel to other areas, they also take several hours off their work and work for few hours. Women are also known to specialize in college majors that result in poor rewards. In addition, majority of the women are employed in government and non-profits organizations where the payment is lower than that in the private sector. Some ethnic minorities and women rarely get opportunities for to improve economically. They also get fewer promotions than others. This concept is best known as glass ceiling and it keeps women from moving up in the occupational ladder. Considering race, studies reveals that there is less likelihood of the African American being hired as compared to the European Americans who possess similar qualifications. The current levels of discrimination may also be attributed to the continued prevalence of the ancient gender roles and the ethnic stereotypes. According to Bartels, (2008), in 2005 the Asian and the white males had the highest median income levels while females of all the races had the lowest. It was lower among the women who were identified as African American or the Hispanic. Despite the gender and the racial difference being ended there is significant discrepancies in the demographics of both racial and gender. Lately, women have earned more associate bachelors and master’s degrees and doctorates than the men. Women are also projected to have overtaken men in the doctorates they earned between 2006 and 2007. Despite all this impressive improvement from the women, male workers continue to hold higher educational attainment. The outstanding performance of women in academia is perceived to be a comparatively new phenomenon. Consequences There are several consequences of the growing economic inequality in America. These include; individuals in the higher social class being distant from individual who are in the lower social classes both socially and physically. There is a likelihood that those who are of higher social classes will be staying in different neighborhoods, there will attend different schools be it public or private and also their place of worship will be different from the rest. With increase in inequality those from higher social classes will be distant socially and even geographically. There will not be able to understand individuals from the lower classes. This may result in several ideologies such that the poor being perceived to be lazy. This may lead to inequality being made legitimate. Another consequence is that individuals from the higher social classes will access several opportunities unlike those from the lower class (Wilkinson, 2005). For example, those from higher classes will be able to go to different parts of the world in search of better education, consumer goods, better health care and even improved retirement lifestyles. This gap will continue to widen unless the government intervenes. This can be through provision of opportunities which cannot be provided in the usual functioning of capitalistic system society. The widening of economic inequalities can lead to the feelings of relative deprivation. This is a situation where individuals in the lower classes compare their current conditions with those of individuals in the higher class and feel deprived and even resentful. It is more likely to arise if people are just told of the importance of equality but does not exist in real life situations. When individuals have a feeling of being deprived and are resentful they will begin looking critically into the existing social conditions legitimacy. The outcome may be several riots and frustrations and outbursts from people of the lower classes. This will result in instability in the whole society. The possible solutions The wish of most Americans is to bring the economic equality to an end. The society has been involved in the search of the possible social solutions to the increased inequality. They include the following; decreasing of the taxes, this involves taxes of the poor, individuals who are working, and the middle class (Lambert, 2002). On the other hand, the taxes of the rich people should be increased. For example, the federal income tax can be made to be more progressive. This will ensure that the poor, working and those from the middle class pay taxes of lower percentages while the wealthy individuals are made to pay taxes of higher percent. Besides the income being taxed, the wealth of the rich can also be taxed and through this inequality will be reduced. Finally, social security tax can also be adjusted. Conclusion The economic inequality in the united has brought division in the society. The high class individual and the lower class group have been separated from one another both socially and physically. The two groups have a contrasting lifestyle. The widening of economic inequalities can lead to the feelings of relative deprivation among the lower class group of individuals. They will begin comparing their current conditions with those of individuals in the higher class. Their perception of unfairness will make them feel disadvantaged and resentful. They become more resentful when the importance of equality is just said but does not exist in real life situations. When individuals have these feelings they begin to critically look into the existing social conditions legitimacy. The outcome may be several riots and frustrations outbursts from people of the lower classes and the whole society will lack proper stability. References Bartels, L .M. (2008).Unequal Democracy: The Political Economy of the New Gilded Age. Princeton: Princeton University Press. Lambert, P. (2002). Distribution and Redistribution of Income. London: Manchester University Press, Sen, A. & Foster, J. (1997). On Economic Inequality (Radcliffe Lectures).Oxford: Oxford University Press. Wilkinson, R. (2005). The Impact of Inequality - how to make sick societies healthier, New York, NY: The New Press. Wilkinson, R. & Pickett, K. (2009), The Spirit Level: Why more equal societies almost always do better, Canada, CA:Allen Lane. Read More