Causes Of Wealth Inequality In The United States

Income/wealth inequality in the U.S has grown rapidly over the last few decades. “Today the richest 1% own 34% of the wealth and top 10% own 74%” (Hodges). The main causes of this discrepancy are attributed to the technology boom, the need for companies to outsource production and inherence of wealth as well as company differences. Though the growing gap is alarming to Americans, it is important to remember that income and wealth inequality is an accepted result of a capitalistic economy. The whole idea of capitalism is the ability for any individual to freely develop, trade, and in turn increase their social status without government interference. By adhering to these base principles it allows us as Americans the freedoms not seen in
Nicholas Bloom writes in an article for Harvard Business Review that “in the 1960’s GE employed manufacturing workers, line managers, executives, janitors, and administrative staff to do a wide range of functions and at different skill levels. Yet over the past several decades it had automated or outsourced most of those functions, however there total number of employees has stayed relatively the same. Meaning they have hired more engineers and it specialists while paying other companies to handle the more medial tasks” (Bloom). It is also worth mentioning and pointing out that the same job within different companies are not paid the same. Companies that conduct the same core aspects, compete against one another. This competition is what makes a competitive market leading to new ideas and technology; however, this competition also has a major impact on income inequality. Companies that are able to attract the best of the best are able to offer better wages and more benefits to their employees, in comparison those companies that are failing to compete often have to lower these benefits in order to save money. These higher sought after companies are
Countries with a large income inequality gap inherently develop much of the same social issues. High crime rates, lower life expectancy due to medical costs, loss of faith in democracy and higher unemployment rate leading to recessions are all major issues associated with a large income gap. Studies have shown a positive relationship between income inequality and crime, saying that inequality is “the single factor most closely and consistently related to crime” (qtd. in Birdsong). It’s not hard to understand why this correlation is so prevalent. Lowered self-esteem and depression lead to resentment of those that are well off, often presenting itself in a hostile manner. This mixed with the need to provide for their families will push people into committing crime, with the benefits outweighing the legal ramifications of their actions. Not to mention, police forces are less funded in those areas of the country that are poor. All of this interacts together leading to a powder keg of crime as desperate people try to provide and react to the injustice they perceive has been committed against them. Mixed with crime is the lower life expectancy for citizens. Dr. Singh from the department of health and human services states “that from 1980-1982 those individuals in the higher income bracket could expect to live 2.8 years longer than the most deprived group, by 2000 that