Is social inequality between the super rich and the rest of the US increasing? Why?
The aim of this essay is to argue that social inequality between the super rich and the rest of the United States is increasing. Nowadays more Americans particularly African Americans live in poverty and do not enjoy the benefits of technology and wealth in a country which is in the forefront of globalization. Also from political perspective the voices of the poor especially African Americans are not heard or they do not have the opportunity to participate in the political process. In terms of politics and economic, social inequality refers to a situation where different groups in the society do not have the same opportunity and wealth for reasons such as race, gender, class and ethnicity. Two essential factors which cause social inequality in the world including the US are unjust politics and economy. Unequal share of wealth, income inequality has created classes in the US society and it will be argued that the upper class has managed to retain most of the wealth at the expense of the middle and the lower class.
Two essential factors which cause and deepen social inequality in the world including the United States are the unjust government’s economic policy and individuals fault as in the US the current government’s tax cut is in favor of the upper income earners more than the middle and the lower income groups (Caputo 2005, p.5). Also Caputo (2005, p.6) adds that the US’s federal taxation policy is in favor of high income earners and the low income earners pay the price. Findings suggest that in regards to the net effect of the Federal tax burden from1980s to 1990s the poor people as well as the middle income households were better off than under the current administration (Caputo 2005, p.16). Caputo (2005, p.7) argues that unlike the upper income earners, the middle income households experience decrease in their shares of income and this could threaten democracy in the US.
Signs of social inequality are in the ways of which people of a society live very differently from each other according to their gender, race, class and ethnicity in terms of having access to education, health care system, political participation and more (New Dimensions of Social Inequality, n.d). Using this definition this could be proved that social inequality is increasing between the super rich and the rest of the US as poor people are getting poorer and the number of homeless and hungry people is increasing (Watson 2007).
In a comparison between the former governments of Clinton, Reagan and G.H. Bush in regards to tax rates, the total effective tax rates among the highest quintile and top one percent during the Clinton’s administration was higher than Reagan and G.H. Bush’s administrations (Caputo 2005, p.8). However, the total effective tax among the middle and the lower income households with or with out children during Clinton’s administration was much lower than Reagan or G.H. Bush administrations (Caputo 2005, p.8). Evidence suggests that the Clinton’s government continued to benefit the lower and middle income families with children through a tax system which first started under G.H. Bush administration through providing them a greater share of after-tax income (Caputo 2005, p.14).
Wealth inequality started to rise sharply from 1975 and now compared to mid 1970s the level of wealth inequality has almost doubled (Wolff 2003, p.3). If dividing income earners, more than half of the wealth in the US is owned by the top five percent and the top twenty percent owns more than eighty percent of the total wealth (Wolff 2003, p.3). However the bottom twenty percent owns no wealth which means precisely they own no assets (Wolff 2003, p.3). Evidence shows that wealth inequality in the US is 0.82 which is close to the maximum level of inequality (Wolff 2003, p.2). It is suggested that the number of people in deep poverty is increasing in the US, while few others are getting richer (Parenti 2002, p.2). This ends up in more social inequality which affects poor people’s access to health and education as it is stated that rich people have better access to higher education and ultimately taking higher paying positions (Parenti 2002, p.1).
Along wealth inequality, there has bee a rise in income inequality as well; however the level of this increase is not as high as the level of wealth inequality (Wolff 2003, p.3). A comparison between the US, the Great Britain and Sweden shows that up to 1970s the level of wealth inequality was much lower in the US than Great Britain and Sweden. In contrast now as the level wealth inequality in many countries is decreasing, in the US this level is sharply increasing (Wolff 2003, p.5). Wolff (2003, p.5) believes that there are two factors behind the rise of wealth inequality which are increase in income inequality and the ratio between stock prices and housing prices. According to Wolff (2003, p.5) if stock prices goes up quicker than housing prices then the share of richest households wealth increases as the rich’s major assets is stock and small businesses while the middle class’s major assets is their home (Wolff 2003, p.5).
Inequality is proved to be a huge issue as it is harms the well being of societies (Wolff 2003, p.6). Compared to more equal societies, economic growth in unequal societies has a lower rate (Wolff 2003, p.6). In agreement, some researchers argue that those societies which tolerate inequality experience a very low economic growth than equal societies (Pizzigati 2005, p.40). Also in equal societies citizens benefit almost equally from education resources (Wolff 2003, p.6). This is not applied to the US as in the country there still is a huge difference in the total resources which go towards education. Consequently, the quality of schools and the level of performance at schools are unequal (Wolff 2003, p.6). This ultimately results in having less educated people in the work force compared to European countries such as Germany and Netherlands which affects the economic growth of the country (Wolff 2003, p.6).
African American families earn much less than the white families and it is estimated that African Americans has earn 60 percent of the average income of white families (Wolff 2003, p.4). In regards to wealth it is found that an average African American family has only 18 percent of the wealth of an average white family and this shows how people are treated according to their race in the US (Wolff 2003, p.4).
Wolff (2003, p.7) refers to tax and social expenditure system as the reasons of the high level of inequality in the US compared to other industrial countries. Compared to most of the Western European countries the US has a much lower taxes and a less progressive tax system. Consequently unlike the rich in Western European countries the rich in the US retain a higher share of their income, enabling them to accumulate a greater share of wealth (Wolff 2003, p.7). Compared to other advanced industrialized countries such as Canada and Japan, the US has a higher rate of poverty and the level of income support for poor families is much lower than these countries (Wolff 2003, p.7).
Evidence suggests that there is a link between fathers and sons class identity (Bjorklund and Jantti 1997, p.1009). A research study between fathers and sons from different background shows that sons of rich fathers turn out to be rich and sons of poor fathers turn out to be poor (Bjorklund and Jantti 1997, p.1016). It is called intergenerational mobility which is believed to be high in the US as findings suggest that forty percent of sons with poor fathers are also poor and forty percent of sons with rich fathers are rich as well (Bjorklund and Jantti 1997, p.1016).
Living expenses in the US has drastically increased to an extent where those poor people who have very limited budget to spend on food rather buy food which is cheaper and has higher calorie as they can not afford to buy healthy food. This results in more obesity (Spencer 2007). Krugman (2007) believes that the US has gone back to the levels of inequality which existed before 1920s. In regards to health inequality Krugman (2007) states that the US government spends huge amount of money on health care, but people are still uncovered and the reason is that “the system is wildly inefficient”. Pizzigati (2005, p.40) indicates that studies by Epidemiologists -Scientists show that the more unequal society the more unhealthy is the people of that society (Pizzagati 2005, p.40). In unequal society in Brazil, wealthy people spend millions of dollars on private security as they fear of being kidnapped in return for money (Pizzigati 2005, p.42).
Although the US’s economic achievement is high, the country has more poverty and lower life expectancy because income is heavily concentrated at the top (Krugman 2002). Evidence suggests that in the past thirty years there has been an unequal rise in the rich and the workers income (Krugman 2002). For instance from 1970 to 1999 average annual salary in America rose from $32,522 to $35.864 which is 10 percent increase in 29 years (Krugman 2002). However at the same time average real annual compensation of the top 100 C.E.O.’s increased from $1.3 million to $37.5 million which is estimated to be more than 1000 times the pay of normal workers (Krugman 2002).
Additionally, exploitation is a process where one class gets “an economic advantage at the expense of another class” (Sorensen 2000, p.1528). It is argued that exploitation in capitalism is out of sight because most likely workers agree to work in return for a wage but this wage is not the value of the workers’ product (Sorensen 2000, p.1528). In addition Sorensen (2000, p.1529) states that the wage which the workers receive is equal to the exchange value. There is a difference between wage and value produced and this difference is “the source of the capitalist’s surplus that generates profits, the end-all of all capitalist activity” (Sorensen 2000, p.1529). In this process the surplus is for the workers and at the expense of workers the capitalist becomes rich (Sorensen 2000, p.1529). Arguably, although capitalism brings about productivity, it promotes huge inequalities in the style and condition of life and this inequality decreases the possibility of fair equality of opportunity (Rubenstein 1993, p.187). Precisely unequal opportunities increase inequality in societies (Rubenstein 1993, pp.194-195). It is suggested that the US has a capitalist society and according to egalitarians a capitalist society is not able to provide and maintain equal opportunities, however this view has been rejected by some researchers (Rubenstein 1993, p.186). Also it is argued that “great inequalities of wealth undermine the equality of rights and political power” (Rubenstein 1993, p.198).
According Sorensen (2000, p.1524) exploitation refers to “a casual connection between the advantage and disadvantage of two classes”. Sorensen (2000, p.1524) further argues that this connection forms “latent antagonistic interests that when acted upon as a result of the development of class consciousness create class conflict”. Sorensen (2000, p.1524) defines the theory of inequality according to the theory of exploitation and states that “the theory of exploitation is the cause of advantages and disadvantages among classes”. Sorensen (2000, p.1524) further states that the theory of exploitation is “a Structural theory of inequality because the source of inequality resides in the relation between classes and not in the efforts and skills of the incumbents of these classes”.
Sorensen (2000, p.1553) strongly argues that nothing can guarantee that efficient labor market develop and maintain good lives. Therefore poor people need to be supported through governments in forms of income support in order to provide them with decent standards of living (Sorensen 2000, p.1553). Berinsky (2002, p.279) indicates that “social welfare programs in the United States is thin and ephemeral”. Additionally, Berinsky (2002, p.279) argues that the responsible factor in disadvantaging social welfare policy supporters is not only the larger political culture.
Finally, evidence suggests that social inequality between the super rich and the rest in the US is increasing. Unequal opportunity plays a big role in creating and increasing of inequality. Researchers claim that from 1970s up to now wealth inequality and income inequality has been increasing sharply and this has resulted in deepening the gap between the super rich and the rest of the US. Additionally, it is argued that poor people have less opportunity in the professional work force system as they have less access to education. Different factors are believed to be responsible in the rise of social inequality in the US; however all the factors can be gathered under two main headings of US politics and economy. Politics in the US praise capitalism which in this system the rich get richer at the expense of the poor and the poor gets poorer. The economic system of the US has helped the upper class to earn much more in less time. It is feared that increase in social inequality could threaten democracy in the US.
References
Berinsky, A. J 2002, Silent Voices: Social Welfare Policy Opinions and Political Equality in America, American Journal of Political Science, Vol 46, No.2.
Bjorklund, A & Jantti, M 1997, ntergenerational Income Mobility in Sweden Compared to the United States, American Economic Review, Vol 87, No.5.
Caputo, R.K 2005, “Distribution of the federal tax burden, share of after-tax income, and after-tax income by Presidential administration and household type, 1981-2000, Journal of Sociology and Social Welfare, Vol 32, No.2.
Krugman, P 2002, For Richer, The New York Times, viewed 25 April 2008,.
Krugman, P 2007-08, Where is the middle class?, ABC Radio National - Background Briefing, Australian Broadcasting Commission, Producer: Kirsten Garrett (Broadcast on 25 November 2007; rebroadcast February 2008.)
New Dimensions of Social Inequality, n.d, viewed 20 April 2008,.
Parenti, M 2002, The super rich are out of sight, Commondreams.org News Centre.
Pizzigati, S 2005, The rich and the rest, Futurist, 39 (4).
Rubenstein, D 1993, Capitalism, social mobility and disributive justice, Social theory and Practice, Vol 19, No.2.
Sorensen, A.B 2000, Toward a Sounder Basis for Class Analysis, American Journal of Sociology, Vol 105, No.6 .
Spencer, N 2007, Food prices rise, living standards fall for US families, viewed 20 April 2008,.
Watson, D 2007, US mayors’ report: Hunger and homelessness intensify in US cities, viewed 22 April 2008,
.
Wolff, E 2003, The wealth divide: the growing gap in the United States between the rich and the rest, Multinational Monitor, Vol 24, No.5.
The aim of this essay is to argue that social inequality between the super rich and the rest of the United States is increasing. Nowadays more Americans particularly African Americans live in poverty and do not enjoy the benefits of technology and wealth in a country which is in the forefront of globalization. Also from political perspective the voices of the poor especially African Americans are not heard or they do not have the opportunity to participate in the political process. In terms of politics and economic, social inequality refers to a situation where different groups in the society do not have the same opportunity and wealth for reasons such as race, gender, class and ethnicity. Two essential factors which cause social inequality in the world including the US are unjust politics and economy. Unequal share of wealth, income inequality has created classes in the US society and it will be argued that the upper class has managed to retain most of the wealth at the expense of the middle and the lower class.
Two essential factors which cause and deepen social inequality in the world including the United States are the unjust government’s economic policy and individuals fault as in the US the current government’s tax cut is in favor of the upper income earners more than the middle and the lower income groups (Caputo 2005, p.5). Also Caputo (2005, p.6) adds that the US’s federal taxation policy is in favor of high income earners and the low income earners pay the price. Findings suggest that in regards to the net effect of the Federal tax burden from1980s to 1990s the poor people as well as the middle income households were better off than under the current administration (Caputo 2005, p.16). Caputo (2005, p.7) argues that unlike the upper income earners, the middle income households experience decrease in their shares of income and this could threaten democracy in the US.
Signs of social inequality are in the ways of which people of a society live very differently from each other according to their gender, race, class and ethnicity in terms of having access to education, health care system, political participation and more (New Dimensions of Social Inequality, n.d). Using this definition this could be proved that social inequality is increasing between the super rich and the rest of the US as poor people are getting poorer and the number of homeless and hungry people is increasing (Watson 2007).
In a comparison between the former governments of Clinton, Reagan and G.H. Bush in regards to tax rates, the total effective tax rates among the highest quintile and top one percent during the Clinton’s administration was higher than Reagan and G.H. Bush’s administrations (Caputo 2005, p.8). However, the total effective tax among the middle and the lower income households with or with out children during Clinton’s administration was much lower than Reagan or G.H. Bush administrations (Caputo 2005, p.8). Evidence suggests that the Clinton’s government continued to benefit the lower and middle income families with children through a tax system which first started under G.H. Bush administration through providing them a greater share of after-tax income (Caputo 2005, p.14).
Wealth inequality started to rise sharply from 1975 and now compared to mid 1970s the level of wealth inequality has almost doubled (Wolff 2003, p.3). If dividing income earners, more than half of the wealth in the US is owned by the top five percent and the top twenty percent owns more than eighty percent of the total wealth (Wolff 2003, p.3). However the bottom twenty percent owns no wealth which means precisely they own no assets (Wolff 2003, p.3). Evidence shows that wealth inequality in the US is 0.82 which is close to the maximum level of inequality (Wolff 2003, p.2). It is suggested that the number of people in deep poverty is increasing in the US, while few others are getting richer (Parenti 2002, p.2). This ends up in more social inequality which affects poor people’s access to health and education as it is stated that rich people have better access to higher education and ultimately taking higher paying positions (Parenti 2002, p.1).
Along wealth inequality, there has bee a rise in income inequality as well; however the level of this increase is not as high as the level of wealth inequality (Wolff 2003, p.3). A comparison between the US, the Great Britain and Sweden shows that up to 1970s the level of wealth inequality was much lower in the US than Great Britain and Sweden. In contrast now as the level wealth inequality in many countries is decreasing, in the US this level is sharply increasing (Wolff 2003, p.5). Wolff (2003, p.5) believes that there are two factors behind the rise of wealth inequality which are increase in income inequality and the ratio between stock prices and housing prices. According to Wolff (2003, p.5) if stock prices goes up quicker than housing prices then the share of richest households wealth increases as the rich’s major assets is stock and small businesses while the middle class’s major assets is their home (Wolff 2003, p.5).
Inequality is proved to be a huge issue as it is harms the well being of societies (Wolff 2003, p.6). Compared to more equal societies, economic growth in unequal societies has a lower rate (Wolff 2003, p.6). In agreement, some researchers argue that those societies which tolerate inequality experience a very low economic growth than equal societies (Pizzigati 2005, p.40). Also in equal societies citizens benefit almost equally from education resources (Wolff 2003, p.6). This is not applied to the US as in the country there still is a huge difference in the total resources which go towards education. Consequently, the quality of schools and the level of performance at schools are unequal (Wolff 2003, p.6). This ultimately results in having less educated people in the work force compared to European countries such as Germany and Netherlands which affects the economic growth of the country (Wolff 2003, p.6).
African American families earn much less than the white families and it is estimated that African Americans has earn 60 percent of the average income of white families (Wolff 2003, p.4). In regards to wealth it is found that an average African American family has only 18 percent of the wealth of an average white family and this shows how people are treated according to their race in the US (Wolff 2003, p.4).
Wolff (2003, p.7) refers to tax and social expenditure system as the reasons of the high level of inequality in the US compared to other industrial countries. Compared to most of the Western European countries the US has a much lower taxes and a less progressive tax system. Consequently unlike the rich in Western European countries the rich in the US retain a higher share of their income, enabling them to accumulate a greater share of wealth (Wolff 2003, p.7). Compared to other advanced industrialized countries such as Canada and Japan, the US has a higher rate of poverty and the level of income support for poor families is much lower than these countries (Wolff 2003, p.7).
Evidence suggests that there is a link between fathers and sons class identity (Bjorklund and Jantti 1997, p.1009). A research study between fathers and sons from different background shows that sons of rich fathers turn out to be rich and sons of poor fathers turn out to be poor (Bjorklund and Jantti 1997, p.1016). It is called intergenerational mobility which is believed to be high in the US as findings suggest that forty percent of sons with poor fathers are also poor and forty percent of sons with rich fathers are rich as well (Bjorklund and Jantti 1997, p.1016).
Living expenses in the US has drastically increased to an extent where those poor people who have very limited budget to spend on food rather buy food which is cheaper and has higher calorie as they can not afford to buy healthy food. This results in more obesity (Spencer 2007). Krugman (2007) believes that the US has gone back to the levels of inequality which existed before 1920s. In regards to health inequality Krugman (2007) states that the US government spends huge amount of money on health care, but people are still uncovered and the reason is that “the system is wildly inefficient”. Pizzigati (2005, p.40) indicates that studies by Epidemiologists -Scientists show that the more unequal society the more unhealthy is the people of that society (Pizzagati 2005, p.40). In unequal society in Brazil, wealthy people spend millions of dollars on private security as they fear of being kidnapped in return for money (Pizzigati 2005, p.42).
Although the US’s economic achievement is high, the country has more poverty and lower life expectancy because income is heavily concentrated at the top (Krugman 2002). Evidence suggests that in the past thirty years there has been an unequal rise in the rich and the workers income (Krugman 2002). For instance from 1970 to 1999 average annual salary in America rose from $32,522 to $35.864 which is 10 percent increase in 29 years (Krugman 2002). However at the same time average real annual compensation of the top 100 C.E.O.’s increased from $1.3 million to $37.5 million which is estimated to be more than 1000 times the pay of normal workers (Krugman 2002).
Additionally, exploitation is a process where one class gets “an economic advantage at the expense of another class” (Sorensen 2000, p.1528). It is argued that exploitation in capitalism is out of sight because most likely workers agree to work in return for a wage but this wage is not the value of the workers’ product (Sorensen 2000, p.1528). In addition Sorensen (2000, p.1529) states that the wage which the workers receive is equal to the exchange value. There is a difference between wage and value produced and this difference is “the source of the capitalist’s surplus that generates profits, the end-all of all capitalist activity” (Sorensen 2000, p.1529). In this process the surplus is for the workers and at the expense of workers the capitalist becomes rich (Sorensen 2000, p.1529). Arguably, although capitalism brings about productivity, it promotes huge inequalities in the style and condition of life and this inequality decreases the possibility of fair equality of opportunity (Rubenstein 1993, p.187). Precisely unequal opportunities increase inequality in societies (Rubenstein 1993, pp.194-195). It is suggested that the US has a capitalist society and according to egalitarians a capitalist society is not able to provide and maintain equal opportunities, however this view has been rejected by some researchers (Rubenstein 1993, p.186). Also it is argued that “great inequalities of wealth undermine the equality of rights and political power” (Rubenstein 1993, p.198).
According Sorensen (2000, p.1524) exploitation refers to “a casual connection between the advantage and disadvantage of two classes”. Sorensen (2000, p.1524) further argues that this connection forms “latent antagonistic interests that when acted upon as a result of the development of class consciousness create class conflict”. Sorensen (2000, p.1524) defines the theory of inequality according to the theory of exploitation and states that “the theory of exploitation is the cause of advantages and disadvantages among classes”. Sorensen (2000, p.1524) further states that the theory of exploitation is “a Structural theory of inequality because the source of inequality resides in the relation between classes and not in the efforts and skills of the incumbents of these classes”.
Sorensen (2000, p.1553) strongly argues that nothing can guarantee that efficient labor market develop and maintain good lives. Therefore poor people need to be supported through governments in forms of income support in order to provide them with decent standards of living (Sorensen 2000, p.1553). Berinsky (2002, p.279) indicates that “social welfare programs in the United States is thin and ephemeral”. Additionally, Berinsky (2002, p.279) argues that the responsible factor in disadvantaging social welfare policy supporters is not only the larger political culture.
Finally, evidence suggests that social inequality between the super rich and the rest in the US is increasing. Unequal opportunity plays a big role in creating and increasing of inequality. Researchers claim that from 1970s up to now wealth inequality and income inequality has been increasing sharply and this has resulted in deepening the gap between the super rich and the rest of the US. Additionally, it is argued that poor people have less opportunity in the professional work force system as they have less access to education. Different factors are believed to be responsible in the rise of social inequality in the US; however all the factors can be gathered under two main headings of US politics and economy. Politics in the US praise capitalism which in this system the rich get richer at the expense of the poor and the poor gets poorer. The economic system of the US has helped the upper class to earn much more in less time. It is feared that increase in social inequality could threaten democracy in the US.
References
Berinsky, A. J 2002, Silent Voices: Social Welfare Policy Opinions and Political Equality in America, American Journal of Political Science, Vol 46, No.2.
Bjorklund, A & Jantti, M 1997, ntergenerational Income Mobility in Sweden Compared to the United States, American Economic Review, Vol 87, No.5.
Caputo, R.K 2005, “Distribution of the federal tax burden, share of after-tax income, and after-tax income by Presidential administration and household type, 1981-2000, Journal of Sociology and Social Welfare, Vol 32, No.2.
Krugman, P 2002, For Richer, The New York Times, viewed 25 April 2008,
Krugman, P 2007-08, Where is the middle class?, ABC Radio National - Background Briefing, Australian Broadcasting Commission, Producer: Kirsten Garrett (Broadcast on 25 November 2007; rebroadcast February 2008.)
New Dimensions of Social Inequality, n.d, viewed 20 April 2008,
Parenti, M 2002, The super rich are out of sight, Commondreams.org News Centre.
Pizzigati, S 2005, The rich and the rest, Futurist, 39 (4).
Rubenstein, D 1993, Capitalism, social mobility and disributive justice, Social theory and Practice, Vol 19, No.2.
Sorensen, A.B 2000, Toward a Sounder Basis for Class Analysis, American Journal of Sociology, Vol 105, No.6 .
Spencer, N 2007, Food prices rise, living standards fall for US families, viewed 20 April 2008,
Watson, D 2007, US mayors’ report: Hunger and homelessness intensify in US cities, viewed 22 April 2008,
Wolff, E 2003, The wealth divide: the growing gap in the United States between the rich and the rest, Multinational Monitor, Vol 24, No.5.
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