Income inequality in the US

Income has always been used as a significant determinant of quality of life in the world.  It consists of earnings from salaries, wages, self-employment, and capital investments. Income does not involve the value of homes, stocks, or other personal belongings. Access to basic needs in life is tied to what someone earns. It determines the well-being of individual and families where those who make little money have limited access to basic needs. On the other hand, people who earn enormous income have unlimited access to basic needs and more (Solt 1270). Those with high income have a high disposable income, which allows them to invest and gain more money. The lowly paid have low income, which inhibits their ability to expand their wealth and increase the quality of life. The disparity in the level of income is what is termed as income inequality. Despite being labeled one of the wealthiest nations in the world, the United States of America also experience income inequality among its populace.

Income inequality refers to the disparity in the distribution of income between individuals in a particular shared economy. The difference in income levels brings other forms of inequality, such as political power and social status. Income inequality can be measured using the Gini coefficient, which compares the cumulative proposition of the population versus the cumulative proportion of income they receive (Saez and Gabriel 519). There exists a vicious cycle of income inequality, where the rich continue getting more income while the lowly paid remain in poverty. Several reasons cause income inequalities in an economy. Education has been used to determine the amount of money a person earns. People with a high level of education are perceived to be more qualified, and hence, they get paid highly. Those with a low level of education or illiterate are seen to be less skillful; thus, the low income received (McLoyd 592). The labor market also causes income inequality. In a free market, the amount of wages and salaries are paid according to the market demand and supply of labor. In a situation where there is a high demand for labor, the workers will be paid high wages. On the other hand, the workers will receive lower wages where the supply of labor is high, and the demand is low. The use of technology has also contributed to the increase in the level of income inequality. Technology has replaced most of the human labor and rendered a large number of the population in New Jersey jobless. The job market also witnesses disparities in income based on gender. In the United States of America, women earn less salary compared to their male colleagues on a full-time basis. However, women who work in part-time jobs make more compared to their male counterparts

Income inequalities do affect not only individuals but also the country as a whole. The living standards of people living in a country are affected by income disparities. The access to basic needs such as healthcare, housing, and food is determined by per capita income. Those with a high level of income live in the most lavish places while the low-income earners live in abject poverty. The difference in social status leads to increases level of crime in the country (Dabla-Norris et al.). The poor will try to steal from the rich class for survival purposes. The United States experiences a rise in the level of illegal businesses due to income inequality. The poor engage in illegal businesses to liberate themselves from the chains of poverty, while the rich engage to maintain their social class. The level of income inequalities has been on the rise in the United States since the 1980s. Income disparities witnessed is spurred by race age and gender, among other social factors (Milanovic). Erosion of wages to the less educated workers has been the main causes of income inequalities, which have led to a decline in real wages. The decline in real wages is triggered by a reduction in the number of manufacturing jobs and growth in the service industry that pays minimum wages. Globally, political instability and environmental degradation has been linked to the existing income disparities

The existence of income inequalities is unhealthy for any country that seeks to grow its economy. It is advisable for any country experiencing income inequality to confront the matter and iron out the difference. Although there is no particular solution to income inequality, nations should employ multiple programs and policies to reduce the discrepancies in income. The governments are advised to address the matter of inequalities without diminishing the prospects of wealth. Income inequalities can be reduced by setting a legal minimum wage for the workers (Dabla-Norris et al.). If the governments set the minimum wages required to pay workers, the level of income inequalities would reduce drastically. It also requires the government to regulate the maximum amount of money paid as wages for high earners. The government can also use fiscal policies such as taxes to address the issues of income inequality. Increasing access to education can also address the issue of income inequality. When a high number of people have access to education and skills, they will upgrade to a higher pay grade hence reducing the income gap. Economies are also advised to put in place policies that would address unemployment in the country (Milanovic). Employment-related policies will strengthen collective bargaining power and full employment schemes that will address income inequalities

An ideal state is where the government can meet the basic needs and welfare of its people. Addressing the issues of income inequality will ensure that the country grows economically. The government has a task to ensure that its people are educated and equipped with the necessary skills for employment and innovation (Saez and Gabriel 519). Making colleges and education programs more affordable would increase the number of skilled people and reduce the level of income inequality. It would also be wise for the government to strengthen the labor unions to fight for the welfare and rights of workers. This approach will ensure that the welfare of the majority of the people, who are lowly paid is addressed. Government focus on developing and investing in the welfare of the people will address inequality and promote economic growth.


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