Government & The Economy - Essay Example

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But a nation’s status (based upon development) cannot be considered as an apt yardstick to measure inequality. On the other side, successful…
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Download file to see previous pages d 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.
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.
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 ...Download file to see next pagesRead More
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