Question

Income inequality has grown dramatically in the US over the past 4 decades.   Is that a bad thing? Why/why not? What percentage of the US work force has enjoyed improved standards of living over the past 4 decades?   Who has received the productivity and income gains generated by the US economy over that period of time?   Should public policy be changed to encourage greater or lesser income inequality?   What changes would you advocate?

Answer 1

Income inequality in the US has grown drastically in the past years. 1% of the nationals receive an income much more than the 99% of them. The income of one-fourth of the population is less than $10 per hour. The richer are getting richer and poorer and leading to a miserable condition. The causes of this imbalance can be the unfair exchange rates, cheap labour of China, and trend of outsourcing jobs. The developing countries like China and India have low paid skilled workers and are taking place in the global markets. The American companies choose to hire them for their work and pay less instead of hiring the high paid Americans. This makes the Americans lower their demand for income. The companies aim for profits more than the upliftment and employment of the locals. With the outsourcing of jobs, the works of these companies are getting done, they are growing and earning profits which are making the higher classes of population richer.

The public policies for the employment in the country and equal distribution should be changed so that the nationals are paid decently and the inequality is abolished. More investments should be made in human capital for improving labour force and increasing individual wealth. Education and employment training should be accessed to the youth so that they can enhance their skills to replace the outsourced talents. Providing the population with a universal basic income is not a practical solution. Hence more emphasis should be on the upliftment of the labour force so that they can be capable of working such that better incomes can be paid to them.