Question

Is income inequality a serious problem in America? Should the government do more to promote a more equitable division of wealth in America? If so, how? If not, why not?

Explain in 300 words.

Answer 1

Income inequality is a broad difference between the money earned in an economy by the wealthiest people as opposed to the poorest. Income includes salaries, returns on investment, loan, and real estate sales.

Inequality of national and global income is becoming a rising problem which needs to be addressed.
The top earners will benefit from the economic recovery more than will the bottom earners.
The top 10 per cent earn more than 50 per cent of overall income in the United States.
Through outsourcing and businesses replacing employees through technology, inequality has increased.

Income disparity is blamed on China's cheap labor, unequal exchange rates and outsourcing of jobs. Corporations are also criticized for taking income before the employees. But they do need to stay competitive. U.S. firms must compete with lower-priced Chinese and Indian firms which pay far less to their employees. As a result, several businesses outsourced their manufacturing and high-tech jobs overseas. Since 2000, the United States has lost 20 per cent of its working employment. Traditionally, these were higher-paid Union workers. Service jobs have increased, but these are much lower paid.

Companies went public during the 1990s to obtain more funds to invest in growth. Managers now have to produce ever-larger profits to appease stockholders. The payroll is the rising budget line item for most businesses. Reengineering has led to fewer full time workers doing work. It also means hiring more contract workers and temporary employees. Immigrants, often illegally in the country, fill more low-paid roles on the service. They have less bargaining leverage to claim higher wages.

The United States needs to recognize the transfer of global wealth is taking place. Many in the top fifth of the U.S. sales class have to know that those in the lower two-fifths can not bear the brunt forever. Trying to avoid outsourcing of U.S. companies won't succeed. It punishes them for having responded to the global wealth redistribution. Nor should protectionist trade measures or walls deter illegal immigration.

The government will have access to education and job training for the lower two-fifths. The best way to boost individual income and develop the work force is to invest in human resources. Equity in education will put us to a certain level, at least. It will be a better option than improving welfare benefits or delivering a minimum guaranteed income. Congress should increase taxes on top fifth to pay for it. Those reforms will be made now so that the adjustment for the economy as a whole is gradual and stable.