Economic Inequality In The United States

Inequality is the unequal distribution of valued goods and opportunities in a society. Over the past two decades, there has been an increase in economic inequality in the United States. Four major reasons for this increase is the changing relationship between technological expansion and education, deindustrialization and restructuring, government policies, and decline of unions. Technology in the United States has advanced immensely since the 1970s. This has led to peoples jobs being replaced by technology, for example bank tellers have been replaced by ATMs, and a higher level of education is now needed to use the technology for jobs. Sociologists have coined this skill-based technological change which just means that increase in technology
For deindustrialization, it is not that less manufacturing is being done, it is that it is being done somewhere other than the United States. This is due to sending jobs overseas in which jobs previously held my Americans, are now being done in other countries for very low wages. For example, Apple has many of its products made in China where workers make an average of 1.50-2.20 dollars and hour. This leads to higher profits for companies and more money for the people at the top which is why there is a large gap in inequality. Also because these industrial jobs are being sent overseas, it means Americans have to leave good jobs for worse jobs such as cashiers, security guards, or many other service type jobs. These jobs not only pay less and are possibly part time jobs, but they also offer fewer benefits such as health care. Economic restructuring has also led to an increase in inequality. Due to the recession of the 1970s, employers were seeking to cut costs and were able to cut employees much easier so they didn’t have to bother with unions and would also reduce the amount of benefits they were giving out. The bottom line for restructuring is that workers are becoming more and more productive, however their pay isn’t increasing. So by being more productive, they are increasing the profits of the company so the people at the top are benefiting and the workers aren’t reaping any of
The United States uses a progressive tax system which means that people at the top are taxed more than people at the bottom. Taxes help pay for government programs which gives money to the elderly, poor, and people with disabilities. However taxes for the rich have declined all the way down to 36 percent. Also many rich people don’t actually pay the full amount they should be paying due to deductions, exemptions, and reduced taxes on certain types of income. Because the rich are paying less in taxes than they should be, there is less money to be redistributed to the people who need it which therefore leads to an increased gap in inequality. The other policy that has failed to change is minimum wage. During the 1980s, the minimum wage stayed stagnant and didn’t rise as inflation occurred over time so in 1990, the minimum wage was six dollars and was adjusted accordingly after that. The reason why minimum wage has a huge effect on inequality is that adult minorities and women make up 70 percent of minimum wage earners and even though only five to six percent of people make minimum wage, it also effects the people that make just above minimum wage because if minimum wage doesn’t increase, then the people just above minimum wage most likely won’t see their wages increase