Income inequality: more than a social issue

|

The Daily Athenaeum
By: Benjamin Russell
March 31, 2014

There has recently been much talk about gay rights and gay marriage in the United States.

The privilege to love who you want is something that is brought under the United States motto of the "Land of the Free". While there are still strides to be made, it is exciting to see this movement of equality spread throughout the states more and more each day.

While inequality is certainly most evident in its social application, economic inequality is continuing to rise in the United States. This unsustainable economic gap has led to many problems already, but the worst is still to come.

The capitalist economy only works if the middle class is safe. With the ever-increasing gap between the wealthy and the poor, the middle class is suffering. In short, the rich are staying rich and the poor are staying poor. Everyone has heard it before, but it is a legitimate concern.

The middle and lower classes are having to spend more money than ever before with the increasing cost of living in the United States, but they are having to do this with stagnant (if not decreasing) wages.

After the Industrial Revolution, productivity and wages of workers both increased dramatically due to the increase in demand. Eventually when the wage salaries leveled off, the demand continued to rise and inflation only created a more difficult situation for families. Many families resorted to borrowing money and working more hours in order to deal with this inflation.

The cost of living has only increased over time and the wages that hard-working families are earning has nearly stayed the same over this same time. The rich are finding loopholes and tax breaks, which allow them to save much more than the average middle class family. The CEOs of some major companies are using these legal loopholes to pocket millions of dollars while lowering the companies' IRS bills at the same time.

The 400 wealthiest Americans have more money than half of America combined. It is a vicious cycle that is only going to create havoc. The lower class is moving further and further into debt while the rich are flourishing by avoiding these types of taxes. The upper class is finding ways to save their money, while the lower class is being taxed what little it already has.

This increase in income inequality in the United States has led to outrage in the middle and lower classes who are being exploited by the government regulations and forced to live (often times) paycheck to paycheck. Not only is it exploiting the 99 percent of Americans that is so often referred to in these discussions, but it has also bled into the political system. Income inequality has been found to be directly proportional to political polarization. Take into consideration political action committees and donations they make to candidates to assist in campaigns. The wealthy are able to influence the political system by donating, or not donating, to a candidate. This essentially creates a political system where groups of wealthy individuals can essentially poison the democracy by controlling it entirely.

The middle class is becoming smaller and smaller, and this is something that is unsustainable over time. A strong middle class is the only way to sustain our economy. The middle class contributes so much to the United States economy that without them, the economy will collapse. With this gap growing between the rich and the poor, the middle class is getting no compensation from the government and are accordingly distraught. This has led to many middle class Americans living modestly to try and prepare their kids for college, pay off health bills, or pay off loans. Without a raise in the wages of these workers, the economy will certainly collapse. It is only a matter of time.

Everyone benefits from a strong economy, and the consequences of not acknowledging the middle class are going to be long-lasting and unnecessarily destructive.

http://www.thedaonline.com/opinion/article_ee87c1c4-b950-11e3-9ca6-0017a43b2370.html

About this Entry

This page contains a single entry by CFED published on April 1, 2014 3:33 PM.

Income Equality: A Search for Consequences was the previous entry in this blog.

Explainer: How economic "rents" affect inequality is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.