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Income Inequity in the United States

by GBAF mag
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Income inequality has risen dramatically in the United States over recent 30 years, with more income moving increasingly unequally to those at the top of the income ladder. Current research suggests three primary causes of rising income inequality and the resulting decline in social mobility: technological change, globalization, and institutional failure. Technological change is nothing new. Industrialization, which began in the mid-nineteenth century, brought forth new manufacturing processes and products that enabled the assembly of consumer goods from simple one-celled organisms to vehicles, plants, and entire industries. However, the impact of this development on income is uneven across countries and communities.

The industrial revolution led not just to increased productivity but also to increased wages. This, however, did not trickle down, with only a small portion of laborers seeing their incomes rise. Realizing the importance of increased income, Americans pushed for policies and legislation to benefit everyone, including workers. Unfortunately, by offering special benefits to certain groups – such as students, minorities, and women – the government inadvertently created income inequality by pricing some groups unfairly against other ones.

Another important cause of rising income inequality is globalization. Since the 1970’s the international economy has become interconnected. Trade barriers have fallen, making goods and services cheaper, which has affected all nations. Americans are particularly affected because they pay much more for goods and services than they imported. Globalization’s effect on the U.S. economy has been overwhelming, resulting in the current global economic downturn and a narrowing of national income gaps.

Institutions also affect an economy. Labor market regulations, rules concerning employees’ rights, the minimum wage, and regulations regarding the corporation are all essential to maintaining fair labor markets. Incomes have been growing since the 1970’s. However, income inequality has been rising along with it. This can be attributed to the increasingly complex rules governing labor practices and to the decreasing number of workers that are currently employed.

Worker’s compensation and unemployment insurance are two of many items that contribute to income inequality. Workers are not able to obtain adequate protection from unemployment due to employers firing them for reasons such as poor performance or illegal activity. Worker’s compensation laws attempt to help this unfortunate group of people and ensure that they are compensated for lost wages, medical bills, or other losses incurred as a result of employment. The minimum wage attempts to level the playing field between low skilled and high skilled workers by ensuring that these workers are paid a fair wage.

Income inequality can also be affected by changes in living standards. When families have been able to improve their living standards, income inequality often decreases. For example, the average family in the United States in recent years has experienced an income growth of about 3% per year. A vast majority of this income growth has come from the upper middle class and upper classes.

Income inequality is an important concern of the political parties of both major parties. President Obama has taken measures to reduce income inequality in the United States. President Obama and his party are responsible for any efforts that fall short when it comes to reducing income inequality in the United States. President Obama has said that income equality is one of the highest priorities for his administration. The Democrats are seeking to increase the minimum wage, reduce taxes for higher incomes, create tax credits for employers who offer paid leave, institute a “green” tax, institute an “American Jobs Act,” and work to make the US more energy independent.

President Obama’s efforts to reduce income inequality in the united states will most likely face a Republican congress attempting to defeat the left-leaning president on every issue. President Obama realizes that the problem of income inequality is much more complex than he does. He is also aware of the fact that income inequality is very much a product of free market capitalism. It is not a product of socialism. Therefore, it is a concern of both parties in the United States to work toward income equality in the United States.

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