The Wealth Gap, Essay Example

It is no doubt that there is a wealth disparity in the United States. The disparity between the have, and the have-nots have widened. According to CNN, “the 400 richest people in the United States have more wealth than the bottom 150 million put together” (Hargreaves). The situation of the US economy in the past five years have only widened the gap as unemployment rates have reached over 12 percent, the amount of Americans receiving government help has increased significantly, and has increased the number of people that have fell into poverty. The government has not done enough to help stop the shrinking middle class, and the increased in citizens falling into the lower class. There is a severe wealth gap between the 1 percent that holds the most wealth in America, and the rest of the United States that includes the middle and lower classes. The widening wealth gap has directly affected the workforce, the poor, and the children. There have been several articles, books, movies, and other commentaries that have tried to bring to light the situations of the poor in the United States and the wealth gap that has divided the country into the have and the have nots. For the purpose of this paper, I will provide a critical argument over the problems that stem from wealth and poverty in the United States.

“An affluent society that is also both compassionate and rational would, no doubt, secure to all who needed it the minimum income essential for decency and comfort” (Galbraith, 406). Dated back to the 1920s, “the top 1 % of wealth holders has consistently owned an average of 30% of total household sector wealth (Keister, Moller 1) The economic times have recently expanded the rift between the rich and the poor, while those in the middle are left on a sinking ship that leads them into the lower class. Once the recession hit in 2007, the top 1 percent income fell more than 36 percent, while the rest of the 99 percent fell only 11.6 percent. When the economy began to rebound, the top 1 percent benefited from these rises in stock prices and corporate profits. (Wiseman) The wealth gap has contributed to many Americans falling into the categories of the have and the have nots, as more and more have nots have turned to government assistance in order to keep their families off of the streets. Since the rebound from the recession, the top 1 percent has enjoyed 95 percent of income gains. From research from Wiseman (2013), “In 2012, the incomes of the top 1 percent rose nearly 20 percent compared with a 1 percent increase for the remaining 99 percent” (Wiseman). They are several reasons given on why there the middle class is shrinking and there are more people falling into the lower class. In the works of Robert Reich, his reasons on why there has been disparity between the classes is due to the United State compromise on letting corporations build factories here by driving out the small organizations, and then leaving for international borders. Reich’s article, “Why the Rich Are Getting Richer and the Poor, Poorer” Reich discusses how the government pandered to corporations like car manufacturers, by overlooking rules and regulations. The United States “hourglass” economy is limited by its increasing automation and mechanization of the workforce, which has led to outsourcing to other countries where work is cheaper. These actions have allowed those in the top position to become richer while leaving the workforce left without jobs.

There is an overwhelming consensus that the problems of poverty have stemmed from the wealth gap plaguing the United States. Keister and Moller agree that, “wealth ownership in the United States is extremely unequal and that inequality has worsened in recent decades” (Kiester, Moller 64). Reich and Galbraith have both provided commentary on the situation of poverty and wealth that has separated the country into the have and the have nots. Reich describes that the Americans were once on a same economic class, but through corruption with the corporations and the dips in the national economy, “we are now in different boats, one sinking rapidly, one sinking more slowly, and the third rising steadily” (Reich 420) The “hourglass” economy that America now lives in is affecting the main driver of the American economy, the workforce. The dwindling workforce was hit when the recession that took the unemployment rate to the lowest in decades leaving over 10 million Americans without jobs. Some of the first jobs to disappear have been production jobs that have left the fastest within the traditional unionized industries. Older workers within these industries are protected by seniority where the youngest members are found to be the first to be laid off. (Reich 426)

The effects of the workforce have left many jobs that were attributed to hands-on to be switched to robots, and innovations in technology. More and more jobs will be left to be replaced by cheaper labor, lower salaries, and increases in social security used for the retired. As Reich sees it the wealth gap in the workforce is attributed to the rich selling their ideas to the foreign countries, the job occupations of the rich that include engineers, architects, and others. (Reich 427) One of Reich’s last views if the “succession of the rich” leaves the rich able to seclude themselves from the rest of the society with private schools, private transportation, gated communities, and investments into corporations around the world. The wealth gap is growing considerably as the years pass, because the rich get to dictate the job force and are able to outsource jobs for lower wages and automatic machinery to do the job of people.

Galbraith offers his own take on the problems of wealth and poverty in America. His view more specifically with the wealth nation is the problems that plague. In “The Position of Poverty”, Galbraith gives his assessment on the problems of poor in and outside of America. His view on poor and poverty is that, “it is a physical matter; those afflicted have such limited and insufficient food, such poor clothing, such crowded, cold, and dirty shelter that life is painful as well as comparatively brief” (Galbraith 407). Within his research he breaks down the causes of poverty into two categories, insular and case poverty. Insular poverty in Galbraith’s opinion is due to the influences in the environment. Poverty is a result of living in a poor community, neighborhood, or situation in which they have not directly responsible for their predicament. Galbraith believes, “people are poverty-stricken when their income, even if adequate for survival, falls radically behind that of the community” (Galbraith 407).

The disparities in wealth affect the poor dramatically especially in terms of life longevity, where research as shown that wealthy individuals lives over 5 years longer than the poor, and in education as wealthy people are more likely to go to college than poor people. (Hargreaves) The wealth gap leaves the poor with little opportunity to escape from their situations, leaving the assumptions from the rich that they are “indecent”. The richer see the poor as degradations of society, “they live outside the grades or categories which the community regards as acceptable” (Galbraith 407). Case poverty on hand is a case by case basis in which being poor is from a result that is related directly to individuals, in cases in which they are mentally disabled, unemployed, alcoholism, addiction, due to laziness, or other afflictions. Galbraith iterates by saying, “the poor farm family with the junk-filled yard and the dirty children playing the bare dirt” (Galbraith 407).

There is no easy fixes for both categories of poverty, the causes of these extreme gaps is the lack of political reverence. Politicians only play to the poor when it benefits their campaign. Before politicians would align themselves to the poor community in efforts to shine the light on the situations that the rest of the middle class and rich class try to sweep under the rug. However, now politicians regularly align themselves with the people who benefit from an affluent income, instead of the poverty stricken members of the community. (Galbraith 409) In Reich’s view the Government allowed for major corporations to create factories by ignoring and crating rules to receive the kickbacks, but are not dealing with the repercussions as those factories are taking their business elsewhere. The economic growth has been stifled for the middle class, as they have been prone still spend more of their income than the wealth. According to CNN, the wealth gap suppresses job creation and economic growth, because the middle class is too weak to support consumer spending, as the economy is recovering very slowly. (Hargreaves) The disparities have not only affected the middle class but the lower kids as more children have found to toeing the line of poverty than in recent decades.

Children are the future of the generation, but many are growing up with little opportunity of advancement as in pass generations. The extreme wealth gap between the have and the have nots, leads more children in the have not category. According to American Agricultural Economics Association, “In 2000, 17.1 million persons lived in low0income households that participated in the FSP (food stamp program), and of these programs participants, 8.8 were children” (Jolliffe, Gundersen, Tiehen, Winicki 569). Just over a decade later that number has increased dramatically, and there are usually the ones more susceptible to being hurt by the widening wealth gap. The poverty gap is extensive, and the disparities in the income level have placed millions of low-income families looking to the government for financial, food, and wellbeing assistance. The Food Stamp Program (Snap), WIC, TANF, Medicare, Medicaid, and other programs that help low-income and poor individuals survive. But even those social programs have their limits, as they turn away millions who don’t make enough, or make too much to qualify, even though the families are still living in poor conditions. The family structure is possibly to blame as low wage jobs have left parents with little options when taken care of their families as most fathers choose to leave, or struggle with their families. Many experts have pointed that from conclusion of the wealth inequalities, the structure of the family plays a decisive role as an indicator for the poor. Galbraith said, “So is the disintegration of family life in the slum which leaves households in the hands of women” (Galbraith 410). Women and children are the highest demographic for social programs, as the widening gap have left women to search for assistance, take low wage jobs, and sometimes be left homeless in order to take care of their families. While it is much easier to see the effects of the wealth gap in adults, children are the ones that suffer the most as they are left in poor communities, education, resources, and opportunities that help them to rise out of poverty.

For Galbraith there are several solutions that can be done, advances income however not enough and not a prime solutions are. Several other politicians have proposed that we tax the rich, raising minimum wage, and creating better jobs. However, in order to fix the problems of the wealth gap that have led to the haves and the have nots, the government must be willing to acknowledge and put a plan of action in addressing the wealth disparities that have afflicted the workforce, the poor or lower class, and the children. The widening wealth gap has left the upper class with general control over job creations, income, stock prices, and other benefits that have left the rest of the economy including the shrinking middle class with few options to advance. America unlike other countries has a free market in which has helped to get people out of poverty, and place several million into poverty. In order to close the gap there needs to be a real government that takes charge and make efforts to provide better schools, social program and rebuild communities in order to gives those that live in poverty a better chance to escape it.

Works Cited

Galbraith, John Kenneth. “The Position of Poverty.” A World of Ideas: Essential Reading for College Writers. Lee A. Jacobs. 7th ed. New York; Bedford St. Martins, 2006. pp 406-413.

Hargreaves, Steve. How income inequality hurts America. CNN. 25 Sep. 2013. Web. 18 Oct. 2013. http://money.cnn.com/2013/09/25/news/economy/income-inequality/

Joliffe, Dean, Gundersen, Craig, Tiehen, Laura, Winicki, Joshua. Food Stamp Benefits and Child Poverty. American Journal of Agricultural Economics Vol. 87, No. 3 pp. 569-581. Aug. 2005. Web. 18 Oct 2013. http://www.jstor.org/stable/3697899

Keister, Lisa A, Moller, Stephanie. Wealth Inequality in the United States. Annual Review of Sociology Vol. 26, (2000), pp. 63-81. 2000. Web. 18 Oct. 2013. http://www.jstor.org/stable/223437.

Reich, Robert B. “Why the Rich Are Getting Richer and the Poor, Poorer.” A World of Ideas: Essential Reading for College Writers. Lee A. Jacobs. 7th Ed. New York; Bedford St. Martins, 2006. Pp 420-433.

Wiseman, Paul. Wealth gap widens: Richest 1 percent earn biggest share of income since 1920s. Mercury News. 10 Sep. 2013. Web. 18 Oct. 2013. http://www.mercurynews.com/business/ci_24065108/wealth-gap-widens-richest-1-percent-earn-biggest