Are the Rich Getting Richer and the Poor Getting Poorer Still Today - Research Paper Example

Are the Rich Getting Richer and the Poor Getting Poorer Still Today? Abstract The modern socio economic arena has changed remarkably over the years. Today people enjoy the most of social and economic freedom that has long been deprived during the man’s starting years that have been polished with one social reform to another. The virtue of social reforms and social awakening caters for social equality that was observably missing in the early concept of society and the social man. Did man ever found equality in all its sense? That today one can truly say that he is an equal of another? The complexities of equality is not yet fully achieved hence the presence of social inequalities such as inequality in wealth and power will not arise. In the context of this paper inequality in wealth will be tackled by answering the hypothesis if whether the rich are getting richer and the poor are getting poorer in the modern time and the reasons behind such an assumption. Key words: society, social reforms, social awakening, equality, rich, poor Are the rich getting richer and the poor getting poorer still today? Problem Definition It is not a hidden fact that today’s modern world still barricades the society with different levels of differences such as in social and economic status. And few of the common things that come in minds of many people when referring to socio economic differences are poverty and the equation of the rich and the poor. These contrasting words sadly refer to a person’s stability in the society in terms of money or wealth or the purchasing capability of a person to acquire goods or services in exchange of something of value—which in the modern world refers to money and assets convertible to cash. Since the early days of man’s existence, the differences in status have plagued the society with different social evils arising from such inequalities. Even today the gap between the rich and the poor still remains in between setting two worlds offering a life far different from each other. The world has gone from one social reform to another over the years with the hope to end the social inequalities that was set by social differences rooted in the history of man. And one can attest that today’s era represent the social awakening that defies inequality among man and the society. But it seems that wealth and poverty was set aside as a societal battle and was brought down as an individual responsibility that today is viewed as a personal responsibility to strive hard to lift oneself from the pits of poverty. Indeed the modern world is a socially acceptable world but still the traces of inequalities still linger on. One of the best examples of social inequality is the ever dragged issue of poverty that if the world has truly evolved into a fair place of living but why is it that every year poverty is still on top of the list of issues to be addressed by all nations. If the socially reformed world truly deems equality then why is it that only a few percent of the total world population is rich and the rest lies below these few. Is the world such a societal monopoly that makes the rich richer and the poor poorer? Among the context of this issue it will be necessary to know in the current economic trend the percentage of the rich against the percentage of the poor and the rate it travels over the years and the studies that was made before this that would support and suffice the inquiry of this paper. Social and economic theories: Defining the cause of inequality Many social and economic theorists have sought to define and explain the undermining issues why inequality in wealth and social status exist in the social world despite social awakening and reforms that target to address the issue. One of the most famous popular economic doctrines in the economic world has been Karl Marx’s exploitation theory. According to this theory, capitalism is a system of virtual slavery, serving the narrow interests of a comparative handful of businessmen and capitalists, who according to Marx are driven by insatiable greed and power lust that exploits as parasites upon the labor of the masses. Marx views that true wealth is on labor and corporations are exploiting the labors of the people in order to gain more money for themselves and the actual laborers, that are described to be the true producers of true wealth, left with little value thus being exploited. This theory exists to describe that the modern economy of labor is unjust, making the high end owners of companies and business exploiting on the labor of workers thus getting richer while the producers of true wealth are not compensated well with the produce that paved way for income (Reisman, 2012, p. 3). The exploitation theory argues on the conceptual framework that easily points to the assertion of the wage earners’ right to the whole produce or to its full value. It itself is based on the further belief that all income which is due to the performance of labor is wages and that all who work are wage earners. The framework of the exploitation theory is very basic and can be best described during the time when everything is basically free of private ownership and one produces one’s own products and crops and sells them eventually with no other cost or without help incurred from other laborers that will demand a share afterwards (Reisman, 2012, p. 5). Understanding from the Marxism views exploitation theory forms inequality in terms of income and labor. To state the views of exploitation theory an example is that high level workers such as the ones in the supervisory positions work less hard than the ones in the bottom of the labor chain who exerts more effort in labor and yet gets lower income than the ones above the level. This contradicts Marx’s belief that true wealth is in labor and that unequal amount of the whole produce was given to the actual producers of wealth in terms of production. Thus making capitalist even richer and the laborers remain laborers if not even poorer. On another note some believers think that societal inequality is something to live by because it will commonly occur. According to Kingsly Davis’ functionalist view, social inequality is thus an unconsciously evolved device by which societies insure that the most important positions are conscientiously filled by the most qualified persons. This basically tells that social stratification arises basically out of the needs of societies and not out of the desires or needs of individuals (Lenski, 1984, p. 15). What s is interesting with Davis’ view is that he deems inequality inevitable and essential since all positions can never be of equal importance nor all men are equally qualified. With this view societal reforms for equality in all aspects are disregarded since it connotes that inequality is essential to have the wealthier, educated thus more powerful individuals dominate the top of the societal chain because they are highly more qualified than rest. This belief barricades the chances of commoners to be in position to serve with pure intentions and not on the basis of wealth. This also biased in favor of the wealthy that they are more educated thus deserves better chances over unqualified competitors. This theory gives power to those who have wealth making them more in control of the societal and economic condition in favor of them thus making them richer within the society. Are the rich getting richer and the poor poorer? After going through various theories that support the presence of inequality in many forms in the society, the analysis of whether the rich gets richer and the poor get poorer still applies in the modern context of today. Indeed the face of the modern social structure has changed as evolution took over the years and the society now entails much more socially equal atmosphere in terms of rights and other lawful aspects. Although today’s world is considered a socially reformed society inequality in socio economic stability still remains as an issue that manifests all society. Today people no longer fear that they do not have the right to accumulate property, or to go to school, or to marry the one they love or the fear of being singled out because of differences in race, culture or ethnicity because social reforms called for these issues to be addressed years ago. Today most people now fear of not being economically stable to avail all the necessities that are already made available for everyone-- food, shelter, education. It seems that poverty still remains as a social evil that hinders everyone in the society the full access of what it offers that only few of the world’s population get to enjoy. The desire to bring equality even paved way for newer social evil such as social inequalities of the modern form and now these inequalities permitted only the few to benefit as a result the rich to gets richer while most of the people remain at the bottom of the economic field. According to the article ‘29 Amazing Stats Which Prove That The Rich Are Getting Richer And The Poor Are Getting Poorer in America,’ (The American Dream, 2012) the wealthiest one percent of all Americans have a greater net worth than the bottom ninety percent combined. This statement shows that only one percent of the American population is considered wealthy and yet the net worth of that little percentage surpasses the rest of the ninety percent joined together. With this amazing fact one cannot help but wonder how a little portion of the population would earn so much as compared to the totality if equality really exists. A few assumptions can be made from these comparatively contrasting figures: one is that only a little percent of the population are wealthy because they wanted it that way so that control and power is limited to just a few. Secondly, the assumption of the thesis that the rich people are getting richer that they have managed to exceed the net worth compared to the remaining large number of average to poor people who are getting poorer due to inability to cope with the economic standards set by the wealthy few to keep it that way. Moreover, according to the Economic Policy Institute, between 1979 and 2007 income growth for the top 1 percent of all United States income earners was an astounding 390 percent compared to income growth of 5 percent for the bottom 90 percent the same time period only showing the steadily increasing income of the wealthy one percent enough to assume that the rich have gone richer over a period while the poor sector barely cope up (The American Dream, 2012). The following figure represents how the total wealth distribution is favoring the people belonging to the wealthier class. The disparity of changes in wealth over the last generation is portrayed in the figure, which shows the shares of the wealth gains for various wealth classes. All of the gains in wealth accrued to the upper fifth, with 40.2 percent of the gains going to the upper 1 percent and 41.5 percent going to the next wealthiest 4 percent of households. In other words, the richest 5 percent of households obtained roughly 82 percent of all the nation’s gains in wealth between 1983 and 2009. The bottom 60 percent of households actually had less wealth in 2009 than in 1983, representing how poorer these people have become over the years (Mishel, 2011). (Table source: Mishel, 2011, Huge disparity in share of total wealth gain since 1983) From the data and figures presented it can be concluded that the rich have been getting richer over the years while leaving poor income class behind. According to OECD, the gap between rich and poor has grown in more than three-quarters of OECD countries over the past two decades. Inequality of incomes raises both political and economic challenges. Politically, income inequality can fuel populist and protectionist sentiments. Also, societies with a large gap between rich and poor face the threat of political power being confined to the hands of a few wealthy citizens (Organization for Economic Cooperation and Development, 2008). This explains why monitoring inequality is important, although it may seem impossible to bring every individual on the same level in all aspects that make inequality inevitable due to some differences man cannot overcome. And to show the gap that exist between the rich and the poor people is a graph below showing the average incomes of the richest 10% compared to the average income of the poorest 10%. (Table source: Organization for Economic Cooperation and Development, 2008) The Matthew Effect: why the rich are getting richer and the poor poorer. An initial advantage begets further advantage, and disadvantage further disadvantage thus creating a widening gap between those who have more, the rich, and those who have less, the poor. This statement is called the Matthew Effect phenomenon as described by distinguished sociologist Robert Merton from the verse in the Gospel of Mathew (13:22) that says, “for whosoever hath, shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath” (Rigney, 2010). Being wealthy is an advantage thus it can lead them to even better and bigger advantages because according to the Matthew effect resources attracts even more resources. To explain the Matthew effect this further is to discuss the parable of the monopoly game that greatly relates to human life as a gamble to whether to succeed or not in the game of life not purely on luck but most of the times, wise decisions. In this board game all players begin with equal resources that will later progress to extreme inequalities in the distribution of resources as the players acquire and gamble what they have. It has been observed that though things may happen during the course of the game still the richer players tend to get richer, and the poorer players poorer, until eventually the richest player has monopolized all the resources and the poor are left with nothing. As successful players accumulate income-producing property through a combination of skill and luck, their cumulative advantages allow them to reinvest new income in accumulating still more property, producing still more new income. This snowballing pattern of self-amplifying accumulation results in a Matthew effect that ultimately allows the most advantaged player to crush all opponents (Rigney, 2010). Sociologist, Leonard Beeghley (1989 as cited in Rigney, 2010), have made a slight variation in the monopoly game that would make it even more associative with real life. In Beeghley’s version, each player begins with a different sum of money, supposing some players begin the game with $5,000, others begin with $1,000, and still others with only $500. Those who begin with $5,000 enjoy a considerable head start on the competition. They can well afford to acquire every property they land on, and they soon own a disproportionate share of the income-producing properties on the board. Those who follow after them are less able to afford properties of their own, and instead usually find themselves spending limited resources in rent payments, enriching the large owners and impoverishing themselves in the process. The laws of probability virtually ensure that under these conditions, the rich will get richer and the poor poorer, and through no special virtue or vice of their own. Initial advantages are parlayed into greater advantages, creating a widening gap in between (Rigney, 2010). Today the Matthew effect and the parable of the monopoly game can be clearly seen in almost every large scale companies and rich investors in the world that tend to take the risk and invest more with nothing to lose since they already have vast resources until they have fully monopolized the economy they are into playing with the law of supply and demand and pricing eventually making them even richer. On the other end the poor people of society will have to cope up with the increase in prices of goods being monopolized thus stretching and cutting on the budget that they usually have decreasing their purchasing capabilities or in other words making them even poorer. Conclusions and Recommendations From the data collected and collated for the purpose of finding out whether the hypothesis of this study exist that questions whether the rich are getting richer and the poor are getting poorer today. On a personal standpoint, it is believed that the rich are getting richer and the poor are getting poorer today—mostly in the sense of economic decline that is presumed inevitable as well. The data presented are not just figure per se but they connote the increasing number of the rich, the poor and even poverty that increases over the years. The next figure will show the percentage of belief of what most people nowadays think of the cliché: the rich are getting richer and the poor poorer over the years. Surprisingly, even though the society has been through many social reforms and awakening still many believe that the hypothesis of this study exists (Pew Research Center, 2012). Table Source: Pew Research Center, 2012 In order to address the issue of inequality in terms of wealth it is recommended that the society raise awareness of the dynamics of cumulative advantage such as proposals for a return to more regressive forms of taxation and for the rollback of civil rights laws that threaten to further concentrate advantages in the hands of those who are already most advantaged (Rigney, 2010). It is important to take social responsibility on a personal level believing that everyone on the society would benefit from it instead of just letting the wealthy and powerful have control over societal activities. Every person should be very diligent in giving in support to government social reform activities that will help end up inequality in the long run. Earlier the exploitation theory was discussed and believed to be one contributing factor why inequality exists in the capitalist economic society. But the concept of exploitation theory according to Marx is very limited and would no longer apply in the modern concept of economy. I believe that physical exploits and other injustices have already been addressed by the promulgation of laws, acts and bills that protects the labor force from the hands of opportunistic capitalists. People attribute economic progress to labor unions and social legislation, and to what they consider to be improved personal ethics on the part of employers. In the absence of such legislation, people believe, wage rates would return to the minimum subsistence level and women and children would labor once more in the mines and the hours of work would be as long and as hard. The equal share of the produce will also no longer apply because production today incurs different processes that are being paid by the capitalist and the production or work will never actually happen if not for the risk taken by the business capitalist to put up such business. In today’s world of extreme social inequalities, not only in our own nation, but also within and among the nations of the world, we must acknowledge our social conscience that activates a concern for the well-being of others and for the common good (Rigney, 2010). The world may seem unfair for it bears inequalities that man can no longer suppress. Statistics may have shown that the increasing number of the wealthiest net income connotes they are getting richer while on the other hand the increasing rate of poverty tells that the poor are getting poorer still it should not stop people from working hard to pursue the economic status they aim for. Wealth is not anymore in the sense of having the most money today, many people now values self satisfaction that they find even in the most simplest form of work as long as it suffice for the needs of their family. Moreover, poverty is a just a state of economic status that a person should never associate himself permanently with. Many people blame the government, the economy, even the leaders of poverty but they themselves have never done anything to change it. The reason why the rich are getting richer is that they make use of their advantage to even move forward while most of the poor sinks into the disadvantage of being poor and never do anything about it while waiting for the especially the government to make a move. References Beeghley L (1989) The Structure of social stratification in the United States. Allyn and Bacon, Boston. Lenksi G. E. (1984) The Problem: Who gets what and why? In Power and Privilege: A Theory of Social Stratification. University of North Carolina Press Books, USA, p. 1-23 Mishel L. (2011) Huge disparity in share of total wealth gain since 1983. Economic Policy Institute. Retrieved from http://www.epi.org/publication/large-disparity-share-total-wealth-gain/ Organization for Economic Cooperation and Development (2008) Are we growing unequal: New evidence on changes in poverty and incomes over the past 20 years. OECD Publishing. Pew Research Center (2012). Partisan Polarization Surges in Bush, Obama Years Trends in American Values: 1987-2012. Section 3: Values About Economic Inequality and Individual Opportunity. Retrieved from http://www.people-press.org/2012/06/04/section-3-values-about-economic-inequality-and-individual-opportunity/ Reisman G. (2012) Classical Economics Versus the exploitation theory. The Jefferson School of Philosophy, Economics and Psychology. Rigney D. (2010) The Matthew Effect: How advantage begets further advantage. Columbia University Press. The American Dream (2012) 29 Amazing Stats Which Prove That The Rich Are Getting Richer And The Poor Are Getting Poorer. 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