Throughout our nation’s history, and until recent years we have had a fairly stable economy. However, our income equality, or the gap of wealth between the rich and the poor, became an issue during the mid to late 1970s and continuing to worsen in recent years. Since the 1970s though, income inequality has begun to increase for many different reasons. Income inequality is defined by the proportion of the total wealth in US and the proportion of that wealth that is distributed to rich and the poor, and in recent years the rich have been getting a bigger piece of that pie that the poor. We need to look at events leading up to our increased dilema to better understand the why and how this became an issue to begin with.
During the 1920s our economy was booming. Corporate economic growth as well as economic growth in the private sector flourished. These two things were a function of one another. When corporations saw economic growth so did the private sector. Jobs increased, and money was more equally distributed. This trend continued into the 1930s through the1960s. However, our income concentration saw a slight decrease during this time due to things like the Great Depression and World War II. It wasn’t until the 1970s when inflationary trends impacted this sequence of events and set things off balance and the rich began to see a dramatic increase in their economic growth and the poor sharing less.
This trend has increased since the 1970s. Things like the dot-com crisis, where investments were being made in mostly internet based businesses which, for the most part, failed, leaving investors with little to nothing to show for their investments, caused setbacks for this trend. Another ripple that has affected the trend of income inequality was the recession in 2008. For the most part, these two instances in recent years did not change or recalibrate the discrepancy of income in the US or cause a change in the trend. The top 1% of rich people who share around 22.5% of income has increased dramatically and if the current trend plays out, the increase will continue as time goes on. That doesn’t sound like an issue by itself, but when bringing the other side of the argument into the light, the bottom 90% of people share less than 50% of all income.
This problem of income inequality has been a rising issue of interest ever since the 1970s. It has received more of the spotlight recently in hopes to explain some of our other economic issues. In my opinion, income inequality is a fact of life. The rich are always going to be richer than the poor and the poor are always going to be poorer than the rich. This issue needs to be addressed, but it does not need to be prioritized over balancing the budget, or decreasing the national debt.
Joseph Lowe
Additional Readings:
http://www.pewresearch.org/fact-tank/2013/12/05/u-s-income-inequality-on-rise-for-decades-is-now-highest-since-1928/
http://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality
http://www.nber.org/digest/dec08/w13982.html
During the 1920s our economy was booming. Corporate economic growth as well as economic growth in the private sector flourished. These two things were a function of one another. When corporations saw economic growth so did the private sector. Jobs increased, and money was more equally distributed. This trend continued into the 1930s through the1960s. However, our income concentration saw a slight decrease during this time due to things like the Great Depression and World War II. It wasn’t until the 1970s when inflationary trends impacted this sequence of events and set things off balance and the rich began to see a dramatic increase in their economic growth and the poor sharing less.
This trend has increased since the 1970s. Things like the dot-com crisis, where investments were being made in mostly internet based businesses which, for the most part, failed, leaving investors with little to nothing to show for their investments, caused setbacks for this trend. Another ripple that has affected the trend of income inequality was the recession in 2008. For the most part, these two instances in recent years did not change or recalibrate the discrepancy of income in the US or cause a change in the trend. The top 1% of rich people who share around 22.5% of income has increased dramatically and if the current trend plays out, the increase will continue as time goes on. That doesn’t sound like an issue by itself, but when bringing the other side of the argument into the light, the bottom 90% of people share less than 50% of all income.
This problem of income inequality has been a rising issue of interest ever since the 1970s. It has received more of the spotlight recently in hopes to explain some of our other economic issues. In my opinion, income inequality is a fact of life. The rich are always going to be richer than the poor and the poor are always going to be poorer than the rich. This issue needs to be addressed, but it does not need to be prioritized over balancing the budget, or decreasing the national debt.
Joseph Lowe
Additional Readings:
http://www.pewresearch.org/fact-tank/2013/12/05/u-s-income-inequality-on-rise-for-decades-is-now-highest-since-1928/
http://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality
http://www.nber.org/digest/dec08/w13982.html