Inequality Affects World Nations - Essay Example

Government & The Economy One can see that inequality affects world nations but the general assumption is that developed nations are safe from the same. But a nation’s status (based upon development) cannot be considered as an apt yardstick to measure inequality. On the other side, successful implementation and follow-up work on innovative policies can reduce inequality in the society. Within this scenario, the current problem of inequality faced by the United States is deeply rooted in its economic policies. To be specific, Thesis statement: The grass-root level reasons behind inequality within the United States are cheap labor from Asia, unreasonable exchange rates, outsourcing, corporate greed, illegal immigration, discrimination, and involvement in global wars, but policy changes like increase in minimum wages, innovative tax systems, earned income tax credit (EITC), Family and Medical Leave Act of 1993 (FMLA), etc can reduce this inequality to an extent. Reasons: Asian challenge First of all, the challenge of cheap labor from Asia is an important reason behind the inequality in the United States. For instance, globalization transformed the US role within the global trade relations. The Asian nations began to exploit the scope of globalization because human resource is comparatively cheap in Asian context. So, the American companies began to recruit Asians due to less economic burden. This eventually led the educated US citizens towards economic problems related to joblessness. From a different angle of view, cheap labor from Asia benefited the American companies, but affected the educated US citizens. But the policy makers within the US political context were not able to foresee this problem. Besides, the Asian nations accelerate the challenge of cheap labor because the same is helpful for those nations to gain more revenue. To be specific, the difference in exchange rate helps the Asian nations to benefit from working for American companies. Exchange rates Similarly, unreasonable exchange rates result in inequality within the American context. For instance, the initiatives undertaken by the Federal Reserve to stimulate the economy resulted in the decrease in interest rates. To be specific, the Federal Reserve aimed to help the housing market by decreasing the interest rates. But this initiative did not help the Americans to own homes because decreased rate was not enough attract them towards the housing market. This proves the drastic effect of the ineffective economic policies within the US context. One can see that good jobs help citizens to own homes. On the other side, the Federal Reserve tried to stimulate the economy by interfering in the Treasury rates. This helped the upper-class people to enjoy the benefits of low rates because they invested their wealth in bonds. When the investors began to buy commodities, the same resulted in the increase in food price. One can see that unexpected increase in food price directly affects the lower classes in the society. In short, the unreasonable exchange rates forced the lower classes to be the victims of the same. Outsourcing One can see that outsourcing helps international corporations to gain more wealth with less investment. But in the US context, outsourcing resulted in joblessness, poverty and inequality. For instance, the US companies outsource their jobs to the software companies in other parts of the world. These companies benefit from outsourcing because of the supremacy of dollar in the international context. On the other side, outsourcing reduces the scope of the educated youngsters in the United States. When the US companies prefer Asian companies, the US citizens face joblessness because the job is done by the Asian companies. Besides, blue chip companies prefer Asian software companies because the same is more profitable for them. On the other side, the educated Americans are forced to do other jobs. This helps the blue chip companies to enjoy the benefits of globalization, but forces the citizens to face economic problems and inequality in the society. Corporate greed The multinational companies aim to make profit from every deal, disregarding the problems faced by the lower classes. This sort of unwanted importance given to profit, disregarding business ethics and fair deal, is generally known as corporate greed. From a different angle of view, multinational companies hesitate to invest in the mainstream business sector. Instead, they invest their wealth in real estate sector or stock market. On the other side, middle class people invest in business sector and become easy preys of corporate greed. Besides, the lower class people never enjoy the benefits of subsidies related to the business sector because they never try to save or invest money. Still, the economy is under the direct control of the business sector and the same is evident in political lobbying for more subsidies within the economy. So, one can see that corporate greed affects the smooth functioning of the economy and results in inequality among the mass. Illegal immigration Another reason behind inequality is the flood of illegal immigrants posing threat to the US society. The illegal immigrants consider the US as a safe haven because they can enjoy the benefits of different welfare programs. The Commission on Civil Rights opines that, “Many Americans are more likely to believe immigrants fill jobs that without them would remain vacant and that their labor accelerates economic growth and expands overall employment” (28). But the funding for these programs and related economic aid is extracted from taxes. To be specific, the US citizens pay additional taxes to support the illegal immigrants and this leads to further inequality in the society. Discrimination Similarly, discrimination based upon one’s racial identity or sexual identity is another reason behind inequality in the society. For instance, the dominant race considers that colored people are inferior to them. This sort of discrimination is illogical because skin color has nothing to do with one’s status in the mainstream society. Nancy DiTomaso stated that, “Racial inequality still exists, however, and it remains a troubling issue in the American psyche and political landscape” (2). On the other side, discrimination based upon sexual identity forces womenfolk to be within their private domains. To be specific, multinational companies prefer male candidates and this leads to the inequality based upon one’s sexual identity. Wars The political elite class considers that military supremacy is essential to maintain supremacy within the global context. Besides, multinational corporations force the political elite class to protect their assets and business interest in other parts of the world. One can see that wars and invasions result in unexpected economic burden. Neil Smith stated that, “The United States has always harbored great social inequality, but in the quarter century after World War II this inequality remained comparatively stable, even abating at times” (262). The decision makers are safe, but the economic burden is to be suffered by the mass. This leads to further inequalities related to joblessness, poverty, high taxes etc. Expected policy changes One can see that public policy making bodies are deeply influenced by power politics and lobbyists. Besides, inequality within the scenario of American society proves that the nation is following ineffective public policies. For instance, mere subsidy cannot solve poverty because subsidy forces the poor to be dependents forever. From a different angle of view, the government can provide economic support to the needy but the same cannot be considered as a long-term solution. Lewis F. Abbott stated that, “However, over long periods the US national minimum wage rate has stayed the same or fallen in real terms” (28). So, the first initiative from the side of the Federal government must be the increase in minimum wages. For instance, the minimum wage within the nation is $7.25 per hour. The government put forth a proposal to increase the minimum wage to $10.10 per hour. This is an important initiative because it can reduce income inequality among the working class people. Worldwide, innovative tax systems procure revenue to be used for public benefit programs and to accelerate national development. Within the scenario of the United States, the government tries to bring back investment related revenue by implementing tax holidays. For instance, the tax holiday implemented in the year 2004 aimed to boost domestic investment by bringing back American corporations from other nations. Besides, the Federal government expected that the corporations will operate within the national boundary and help the nation to have more job opportunities. To be specific, the American Jobs Creation Act (AJCA) (2004) envisioned to create more job opportunities within the United States. The multinational corporations enjoyed the benefits of tax holiday but it did not create more job opportunities. Sheldon D. Pollack stated that, “The 1976 Tax Reform Act was, at the time, the most massive tax bill ever enacted, implementing tax-reform proposals that had been brewing in the Treasury Department for years” (82). On the other side, the Tax Reform Act in the year 1976 was innovative attempt reform taxation within the United States. So, this sort of innovative policies must be implemented to stimulate the economy. From a different angle of view, the best possible way to deal with the problem of inequality is to combine policies to strengthen families by amalgamating policies like earned income tax credit (EITC) with policies ensuring increase in minimum wages. Kampon Adireksombat stated that, “The Earned Income Tax Credit (EITC) is a refundable income tax credit targeted at low-and middle-income working families in the United States” (1). For instance, the EITC envisions strengthening the working class families by helping to have tax credit. This is important for the society because family is the basic unit within the mainstream society. When individuals are able to keep themselves away from economic problems, the same can help their families. The EITC helps working class families with children to enjoy the benefits of tax credit and to save their income for future uses. Similarly, the Federal government can connect the working class families with innovative Federal policies. To be specific, the immigrant families face a number of problems within the US society. Besides, the economic insecurity distracts children from having proper education. On the other side, there are so many families with women as bread-winners. When the government policies do not aim to save this sort of families from economic problems, expected bankruptcy, and poverty, the scope of overall development becomes futile. Lynne E. Ford stated that, “The implementation of the Family and Medical Leave Act (FMLA) provided the first comprehensive program in the United States to assist wage earners with dependent-care responsibilities” (176). The innovative policies like Family and Medical Leave Act of 1993 (FMLA) can reduce inequality in the society. To be specific, the Act envisions protecting employees and their families from domestic problems related to medical leave. The current taxation and welfare benefits must allow working-class families to raise their children with dignity. On the other side, the multinational corporations influence the politicians and exploit the loopholes within federal taxation. This does not allow working-class families to keep away from poverty and related problems. In short, the federal government and policy makers must provide ample importance to the problems faced by the working-class families. Besides, there must be separate committees to monitor the effectiveness of the policies aiming to reduce inequality in the society. If not, ineffective economic policies and welfare programs may transform American families into the breeding ground of inequality. Summing, there is no clear cut solution to solve the problem of inequality in the mainstream society. Instead, the amalgamation of innovative polices to the core of the society can reduce exploitation and boost-up overall development to an extent. Still, policy makers and political elite class can play important roles in reducing inequality because the responsibility to deal with the problem of inequality is vested upon them. Besides, the American policy makers and political elite class must realize that their initiatives can transform the lives of millions from dependency to self-reliance. Within this scenario, political lobbyists and self-centered business firms must not be allowed to interfere in the process of policy-making and implementation of different welfare programs. To be specific, the Federal government is aware of the grass-root level reasons behind inequality, but political lobbying and ineffective policies affect the smooth functioning of the current welfare programs. In short, positive attitude towards overall development and policy changes can reduce inequality within the context of the United States in future years. Works Cited Adireksombat, Kampon. The Effects of the Earned Income Tax Credit on Labor Markets and Individual Behavior. Ann Arbor: ProQuest, 2008. Print. Abbott, Lewis F. Statutory Minimum Wage Controls: A Critical Review of Their Effects on Labour Markets, Employment and Incomes. Manchester: Industrial Systems Research, 2013. Print. Commission on Civil Rights. Impact of Illegal Immigration on the Wages and Employment Opportunities of Black Workers, August 2010. Washington: Government Printing Office, n.d. Print. DiTomaso, Nancy. The American Non-Dilemma: Racial Inequality Without Racism. New York: Russell Sage Foundation, 2013. Print. Ford, Lynne E. Encyclopedia of Women and American Politics. New York: Infobase Publishing, 2009. Print. Pollack, Sheldon D. Failure of U. S. Tax Policy: Revenue and Politics. University Park: Penn State Press, 2010. Print. Smith, Neil. Uneven Development: Nature, Capital, and the Production of Space. Athens: University of Georgia Press, 2008. Print. Read More