Income Inequality in America
One of the most controversial issues that are faced by American society is Income Inequality. After the financial crises of 2008. Most of the people in the United States lived below the poverty line due to low income which doesn’t exceed $20,000 a year. The wealthier people collect the majority of revenue. Helped by the recoveries from the financial crisis. They are getting more affluent every day. There are various causes to this inequality besides the financial crisis. The deregulation regarding the labor disputes benefits the businessmen more than any of the workers. This leads to workers earning meager wages, that is $10 per hour.
Causes of Income Inequality
Technology changed the nature of work:
Technology is one of the causes of this inequality. Technology replaced workers with machines. Technological progress has caused many people to lost their jobs. Whether it’s machines, robots, or another type of technological advancement. Some people consider that globalization is the cause of this problem. However, technology is the main problem, and only those who pay attention to this technological advancement and train their skills accordingly get a higher paid job.
Globalization:
The rising number of immigrants in the country fills most of the low paid positions. Consequently, the negotiating power for workers is weakened because most employers know that they can hire new people. Therefore workers don’t negotiate for higher wages. Furthermore, President Trump’s tax plan has helped investors and businesses more than it helped workers, thus creating structural discrimination.
When China joined the World Trade Organization in 2001, it had a dramatic effect on income inequality in the U.s due to intense competition with China for the manufacturing of goods.
The Rise of Big Companies:
Amazon and Walmart have brought significant revenues all across the world. Those companies revenues affect the economy. It’s suitable for the corporation, but it’s unfavorable for the smaller stores. Walmart was responsible for the bankrupting and closure of many small family-owned grocery stores and pharmacies in smaller cities. Due to these big corporations, economic growth is limited only to a few big companies that control the market.
No more Labor Unions:
During the last four decades, there has been a drastic drop in the number of trade unions, and only 10% of them are left. Consequently, it shrinks the power of laborers to negotiate for better wages. Over the past half-century, the value of the hourly minimum wage has not increased.
Although the US is facing inequality, there are many ways to diminish this inequality. The US is the only country that owned 25% of the world’s wealth out of 40%. This means that there is enough money in the country. The money is in the hands of the top %1; there is only a need to rotate this money to remove this inequality. This can be done by imposing limitations on outsourcing, trade policies must be protectionist, and walls should be built to prevent people from entering illegally into the country.
In comparison, it is analyzed that there is no income inequality in China due to their strong policies of income equality. They give employment opportunities to their people rather than they outsource to others. Like America, China owns 22% of the world’s wealth, but there is no income inequality. All this due to their consistent rules and regulations.
