Wealth and income inequalities in the United States are only two issues that affect all Americans, and unfortunately it disproportionally large effect on the the poorest Americans. Wealth inequality is defined as an unequal distribution of assets without liabilities found among various individuals, groups, or countries (Zucman & Saez, 2014). Similarly, income inequality is the extent to which income is distributed unequally among a population (Zucman & Saez, 2014) Income directly affects wealth by adding to it like interest accumulated when money is kept in the bank. Thus, seemingly unrelated socioeconomic factors like access vs. lack of access to education, available vs. unattainable resources, and the ease vs. difficulty of finding a good job, are all contributing factors as well as the results of wealth inequality.
Existing Social Conditions.
There are many existing social conditions that affect wealth and income inequality. While all socioeconomic groups feel the effects of inequity, the poor are most affected. Data from the United States Census Bureau from 1967 to 2016, shows that the poorest Americans are earning 2.1% less annually than the poorest Americans earned in 1967 (Semega, Fontenot, & Kollar, 2017). This means that the wealth available to the group most in need of money has actually suffered a significant loss in only ten years. This further exacerbates the inequity because those who are poor and most needing of resources such as healthcare have either inadequate access or no access at all to such resources. This is particularly true in Mississippi, where a study identified an inadequate amount of healthcare professionals in Mississippi’s rural counties, where 53% of residents are African American (Hart-Hester & Thomas, 2003). This disparity results in lower overall health and lower than average life expectancy for residents due to such poor access to healthcare, as the largest determining factor of an individual’s health is their regular access to routine check-ups. Additionally, studies have shown that income and health are proportionately related. For example, people with more income have more regular doctor visits and fewer emergency visits as compared to their lower income counterparts (Kleiman, 1979).
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Cultural Beliefs and Biases.
There are many cultural beliefs and biases that effect wealth and income inequality. One such belief is that there are fewer opportunities for success, even for individuals with degrees from four-year universities (Bailey & Dynarski, 2011). This is evident from a study which showed that “in the last 30 years the amount of college educated people living in poverty has increased from 3% to 6% and the amount of high school educated people living in poverty has increased from 6% to 22%” (Saez & Zucman, 2014). This study shows that despite earning a four-year degree, which has been a reliable way for an individual to increase their socioeconomic class for decades, graduates have fewer opportunities to get good paying jobs. The belief that there are few or no opportunities for individuals with advanced degrees, deters people from earning one, despite those individuals constantly being told that it is the best way to increase one’s income. And the situation is even worse for individuals with only a high school diploma as currently 22% of these people live in poverty (Saez & Zucman, 2014). This fact tends to solidify a belief among those not living in poverty that those who do do so because they are unmotivated or lazy. This belief stems from the false equivalency that if someone can achieve success by working hard and anyone should be able to achieve success by working just as hard. Unfortunately, this is not true and working hard does not necessarily guarantee success. One of the main factors that contribute to success is the availability of beneficial opportunities. However, people who live in poverty do not often see these opportunities nor do they have the resources necessary to take advantage of said opportunities if they happen to arise. By first identifying the logical pathways that allow people to maintain these misconceptions and biases, people can then address and begin to correct these false generalizations about those who live in poverty.
Social Roles.
The social roles that are most prevalent around this issue, divides the population into two groups: the rich and the poor. The social role of the rich is to gain more wealth. They accomplish this by leveraging the power of their vast wealth to make changes that allow them to increase their wealth, such as in the case of Charles Koch’s substantial contribution to Speaker of the House Paul Ryan’s campaign. Not long after the Tax Cuts and Jobs Act of 2017 was passed, billionaire donor Charles Koch, contributed $500,000 to Paul Ryan’s re-election fund (Bykowicz, 2017). This generous donation was made because Charles Koch stood to make anywhere between $1 billion to $1.4 billion from that reform (Americans for Tax Fairness, 2018). This was in addition to the $20 million already spent by Koch and other donors to change public opinion of the tax bill nationwide in order to ease its passage into law (Americans for Tax Fairness, 2018). Thus, by spending the wealth they already have, they are purposely changing the ease with which they can gain more. Considering the immense influence that just one billionaire donor can exert, it is easy to see how the poor can become broken spirited and resigned to the lack of changes in their favor due to their lack of wealth and influence. Luckily enough people are willing to fight for the poor of this country, and eventually break the cycle of wealth and income inequality (Porter & Kramer, 2011). Ultimately, the masses choose who makes the laws by voting. This “power in numbers” is one of the few strengths the poor have over the rich. Identifying which groups align with a given social role allows people to determine which groups are impacted by inequality and which benefit from it.
Social Inequalities.
The poor are most likely to experience social inequities and minority races are more likely to live in poverty (American Psychological Association, 2018). This is due, in part, to institutional discrimination against minorities such as the banking practice of redlining, a practice whereby financial institutions denying loans or insurance to residents within a community based on that community being considered a financial risk to the bank. Unfortunately, most of these communities are heavily populated by minority groups (American Psychological Association, 2018). This rut, that many poor people are stuck in, can also be a result of socioeconomic factors such as the fact that “only 9% of children born in the bottom income quartile complete a four-year degree” (Bailey & Dynarski, 2011). While not always the case, many of these children are raised in the homes of single mothers or even grandparents, with little positive influence from additional family members (Bailey & Dynarski, 2011). These inequities effectively remove access to financial products and higher education for minorities. Without the income of two parents and social support of a family, children are less likely to even know about how to obtain these advantages (Ahmed, 2005). This leaves them with less access to resources like technology, and with fewer chances of success as discussed previously. This in turn means that there are more opportunities available to those in higher socioeconomic classes because the poor are not able to take advantage of such opportunities. (American Psychological Association, 2018) As a result of this unequal distribution of advantages, the gap between the wealthy and the poor can only increase. As previously stated, this is due to the fact that the wealthy are in the best position to increase their wealth because of the increased number of opportunities that the highest socioeconomic class affords them. Luckily, by identifying and studying the factors that contribute to these social inequities, an attempt at providing the poor more resources can be made.
Social Change
The existing conditions including but not limited to cultural beliefs and biases, expected social roles, and social inequalities must be understood if a solution to the problem of wealth and income inequality is to be found (Saez & Zucman, 2014). One of the social issues that will drive change is the increasing difficulty to live as a member of the lowest socioeconomic class. This is because people vote based on how they are faring in the economy. As the poor continue to struggle, public outcry will eventually drive a wave of support for equity resulting in the election of more leaders who want to fix the problems associated with wealth and income inequality (Saez & Zucman, 2014). Such a wave is happening even now. For example, as resources like Planned Parenthood, which provides cheap reproductive health care to women, are taken away from poor communities across the country, a wave of public outrage has caused events to take place that would have previously been extremely unlikely. One such event is the election of Democratic Senator, Doug Jones, to the available Senate seat in Alabama. This is the first time since 1997 that a Democratic has won this position in Alabama. Wealth and income inequality is the current “normal”, but it does not have to be. By banding together the poor can leverage their numbers to elect leaders who are sympathetic to wealth and income equality and will work with their constituents to make positive changes for those who elected them.
- Ahmed, Z. S., (2005) Poverty, Family Stress & Parenting. http://www.humiliationstudies.org/documents/AhmedPovertyFamilyStressParenting.pdf
- Analysis: Koch Brothers Could Get Up To $1.4 Billion Tax Cut From Law They Helped Pass. (2018, January 24). Americans for Tax Fairness. Retrieved February 11, 2018, from https://americansfortaxfairness.org/analysis-koch-brothers-get-1-billion-tax-cut-law-helped-pass/
- Bailey, M. J., & Dynarski, S. M. (2011). Inequality in postsecondary education. In Whither Opportunity?: Rising Inequality, Schools, and Children’s Life Chances. Russell Sage Foundation. (pp. 117-131).
- Bykowicz, J. (2017, December 22). Billionaire Koch Brothers Invest Millions More to Promote Tax Overhaul. The Wall Street Journal. Retrieved February 11, 2018, from https://www.wsj.com/livecoverage/tax-bill-2017/card/1513859346
- Ethnic and Racial Minorities & Socioeconomic Status. (2018). Retrieved February 11, 2018, from http://www.apa.org/pi/ses/resources/publications/minorities.aspx
- Hart-Hester, S., & Thomas, C. (2003). Access to Health Care Professionals in Rural Mississippi. Southern Medical Journal, 96(2), 149-154.
- Kleiman, M. B. (1979). Emergency room use and access to alternative sources of care. Sociology of Health and Illness, 1(3), 318-330.
- Lichter, D. T., & Crowley, M. L. (2002). Poverty in America: Beyond Welfare Reform. Population Bulletin, 57(2), 17-20. Retrieved February 11, 2018, from http://www.prb.org/Source/57.2PovertyInAmerica.pdf
- Porter, M.E. & Kramer, M. R., (2011) Creating Shared Value: How to reinvent capitalism—and unleash a wave of innovation and growth. Harvard Business Review: Reprint HBR.ORG. http://www.nuovavista.com/SharedValuePorterHarvardBusinessReview.PDF
- Saez, E & Zucman, G., (2014) Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data. National Bureau of Economic Research: NBER Working Paper Series. http://goodtimesweb.org/industrial-policy/2014/SaezZucman2014.pdf
- Semega, J. L., Fontenot, K. R., & Kollar, M. A. (2017, September). Income and Poverty in the United States: 2016: Report Number: P60-259: Table A-3. Selected Measures of Equivalence-Adjusted Income Dispersion: 1967 to 2016. Retrieved February 7, 2018, from https://www2.census.gov/programs-surveys/demo/tables/p60/259/tableA3.xls
