Question

Inequality in the American economy is a growing concern for Americans. What are the moral and economic reasons to consider as to why the rich seem to get richer and the poor seem to get poorer?

Answer 1

Inequality shows the variance between the people. It refers to the difference in the earnings, caste, social status etc. From economic prespective, inequality is when you are earning more than others despite of same knowledge and skills. In america growing ineqaulity is a major concern. Various parts of america are facing immense inequality in terms of income. It does not matter what is the growth rate of your economy, how well you are performing, inequality still exists and it does not have any direct relation with poverty. Even if there is no poverty, inequality can still exist. In america 2015 , data shows that 1% of the population have earned what 99% of the population earn there. It has been continously rising. Rich are becoming richer and poor are becoming more poor.

Major economic reasons for growing inequality:-

Growing technology and education:- innovations and development of new technology have generated demand for highly skilled labour whereas supply of the labour is not sufficient which led to loss of jobs for unskilled labour and therefore widening the gap between incomes. To correct this US govt. Needs to bring enhancment in education and training system.

Exceptional performace by some companies:- companies like Apple and Amazon are doing business at global level and acting as a barrier for others to enter in the market and compete with established gaints. Therefore these big companies are earning huge profit while others are just struggling.

Globalization:- with the emergence of free trade, us has started trading outside the country which has led to increase in imports and decrease in production in us which resulted in unemployment and shut down of some firms which leads to decline in jobs, income and rise in inequality.

Govt. Policies:- us government policies like tax reforms, monetary policy, fiscal policy have been unfavourable for equality. It needs to bring changes in the policies and make policies which can reduce inequality so that the benefits can be reached in all the parts of us rather than making them available to the selected groups.

IF we talk about the moral reasons that cause inequality includes fradulent companies which are operating in some parts and snatching great amount of money cause ineqaulity. Such companies are earning huge amount unethically.

Moreover bribe system, non payment of taxes by some people causes leads to inequality.