Economic Inequality: the Wealth Gap Between Americans

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Global Economic Inequality is defined as the worldwide divergence of financial resources among nations, but also among households, individuals, classes, sex, and other socially defined groups. The United States today is faced with many issues that shape the way we go about our everyday lives. With an upcoming election, topics like the economy, foreign policy, and social rights are all being addressed and recognized as things we can improve upon. Currently, the wealth gap between Americans is one of the biggest issues we face and is one of the greatest injustices we see in our modern day society. With the top one percent making more than fifty percent of the income in the world and the average CEO making five-hundred times his average laborer, a large portion of the working class is left unable to make it above the poverty line.

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The American dream relies on the ability to succeed and have opportunity from any background. Unfortunately, though, this is not the case. The current system we have in place supports wealthy, and usually white, Americans under the assumption that they are doing the right thing. For poorer Americans this is usually not the case, as they face harsher standards and punishments for the same actions. The best examples for this can be seen through the treatment of large corporations in comparison to lower class individuals. Hong Kong and Shanghai Banking Corporation, a multi billion-dollar company, admitted to laundering up to $7 billion dollars for Central American drug cartels. While this big corporation did end up paying a $1.9 billion dollar civil fine (about a month of the company’s revenue), the company and its employee’s were never faced with any criminal charges. On the other hand, lower-class African Americans see much higher incarceration rates than their white counter-parts. Drug charges lead the way in inequality with comparable arrests. Within the last thirty years black Americans have been up to five times as likely as a white American to be imprisoned on a drug charge. The great economic disparity coupled with the disadvantage of racial identification is another reason why the American dream is not intact. Being born at a disadvantage along with disfavor towards this disadvantage is one of the greatest issues of our current wealth gap.

So why is the wealth gap so morally wrong? Imagine that there is a region of one hundred people, each person to denote a different percent of the American wealth spread. For anecdotal purposes lets say each person needs $2 a day to stay above the poverty line. We can say there is one thousand dollars made by that region a day, way more than enough for every person to be above the poverty line. Ideally, there is a spread in income, because if everyone made the same (in our own economy) then it would be socialism and they’d lose motivation to work. So, this “ideal spread” has the top 1% making about $20 dollars for the day and the bottom 10% making around $4 each, where the middle class is making $8-$10. Everyone is above the poverty line, great! Unfortunately, that is only ideally, and not quite that many people are above the poverty line. In actuality the bottom 15% wouldn’t even make the $1 they needed, the middle class would be making around $4 dollars each, and the top 15% would be the only ones making more than $10 for the day. In fact, the top 1% would make $400 dollars out of the $1000. When people can’t make enough money to account for the cost of living while others are living in excess, at what point can we draw a line and say enough is enough?

During the past few years the Wealth Gap has reached a point where large groups feel moved to gather and protest, the most notable recent movement being Occupy Wall street. After the financial crisis of 2008 many American’s were left without jobs and wanted government action in order to recover. The 1% controlled the majority of financial assets and the other 99% wanted answers. With the moral standards of living not able to be met by many Americans, you can either look to the top for help, or demand it. Unfortunately, since the start of the Occupy movement in 2008, little change can be seen in income of the top 1%, but President Barack Obama has made steps toward equality by a change in economic policy which actually taxed capital gains more than ever before. But still we see the enormous gap between the top and the bottom, which causes us to ask this: How can we build our lower and middle class without taxing the motivation to succeed out of the wealthy?

Many Democrats believe the first step to ending this huge wealth gap is by increasing the tax on the wealthy, especially the top 1%, while most conservatives argue that taxing the top 1% instead reduces jobs. The argument used is that if we increase the tax on the super-rich, they will not only have less money to spend on personal consumption, but their ability to create other jobs will be reduced. This is under the assumption that by taxing the huge companies and their heads that they will have less money to pay their laborers. Research has actually shown different effects on the economy. An increase in tax on the rich proportionate to the middle and lower class would instead pump money into government programs and some say stimulate the economy.

The reason we are unable to make this fiscal policy change though is because the super rich do not (as a whole) want to give up their hard earned money. Political corruption, excessive sponsoring, and heavy lobbyist action are all calculated moves that the big corporations, the ones with all the power, make in order to stay on top. This is where another injustice lies. The United States is technically a democracy but more goes on behind the scenes than we’re meant to know. Politicians are meant to represent the people but instead usually gain their support through campaign funding from large corporations, with strings attached. It is nearly impossible to win an election without a large amount of resources and the super rich are more than willing to give in order to stay on top.

At what point do Americans as a whole come together in order to create a more just society? With the upcoming presidential election new candidates bring hope to the tarnished American dream and all promise get the economy on the right track to be a successful nation and people. With people starving everyday, unable to keep their houses, and accruing massive debt, the super rich continue to reap of the benefits of the current system and change is necessary not only because it is logistical but because morally, it is the right thing to do.

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