Have you ever heard the phrase, “the rich get richer and the poor get poorer”? This is not just a saying, but an undeniable reality in the United States of America. Currently, the three richest men in the country hold the same amount of wealth as the bottom 50% of Americans. Economic policy and ideological divisions in the United States has made it virtually impossible to achieve upward social mobility, resulting in a socioeconomic divide with detrimental consequences.
As I explained in my video, my desire to learn about inequality stems from a growing political awareness beginning in the 6th grade. I went to middle school at Julia Morgan School for Girls where we were taught to fight against social injustices within our communities and in the world. I joined a club where I registered hundreds of high schoolers to vote, went to a number of political marches, and interviewed local political figures. These experiences inspired me to explore a myriad of issues. One that I became very interested in is America’s economic system and the way it shapes our society. Furthermore, the issue of inequality is not only apparent in the country as a whole, but in the Bay Area. Oakland and its surrounding cities are the most unequal region in California. Growing up here, I have seen the ways the wealth gap divides our city and creates unimaginable poverty. These observations have inspired me to uncover how corporations, politicians, and the rich have been successful in increasing the class divide.
Socioeconomic inequality refers to disparities in the distribution of wealth, income, education, employment, and opportunity which may harm or elevate an individual or group’s social status.
Major socioeconomic inequalities first became apparent in the South throughout slavery. Aristocratic slaveowners used their economic power to influence politics, allowing them to maintain control of the region. This left most of the population with little wealth and opportunities for economic mobility. The wealth gap continued to widen into the late 1800s with the Gilded Age, a period that brought new, more efficient technology to manufacturing. The technological changes spurred great economic gains, but mainly for corporations and the men who managed them. The immense socioeconomic disparities during the Gilded Age were the result of laissez-faire capitalism, which prioritized profit and individual gain, and led to deregulation, political corruption, wage reductions, and labor violence.
Furthermore, the 20th century consisted of major national and global events which caused socioeconomic conditions to fluctuate. Wealth disparities decreased during the Progressive Era, but this did not have a lasting impact due to the Great Depression and spread of conservatism. After the stock market crash of 1929, one fourth of Americans were unemployed and the national income average dropped by 40%. The New Deal and World War II mobilized the economy and created more jobs, however, progress was undone in the late 1900s. Other countries were becoming economically competitive with the U.S., drawing American corporations overseas where they could collect bigger profits through worker exploitation. Major cities lost countless jobs as a result, and President Reagan re-ignited laissez-faire capitalism, eliminating many regulations and social programs. Between 1977 and the end of the century, “incomes for the top fifth of Americans grew by 38%, while middle-class incomes remained roughly stagnant, and those for the bottom fifth declined by 12%” (Cahill).
Gains in socioeconomic mobility failed to persist past the 1960s and wealth disparities today are as high as they were during the Gilded Age. As I mentioned in my video, the 21st century has consisted of social, economic, and political practices that have enabled the oppression of the middle and working classes. Falling levels of unionization have taken pressure off corporations and politicians to advance workers’ rights, globalization has allowed corporations to relocate outside of the United States taking away millions of manufacturing jobs, and wages have failed to rise with productivity, inflation, and costs of living. Finally, tax breaks for corporations and the top percentiles have weakened the voices and livelihood of the middle and working classes.
Moreover, the wealthy have imposed false ideological notions on American society such as the belief in the American Dream, the class compromise, and individualism which have suppressed the development of class consciousness among the middle and working class. These ideologies assume that “equal opportunity is already actualized” (Neill) and poverty is a result of individual failure to work hard. Further, American politics are dominated by ideologies such as laissez-faire capitalism, which neglect economic fairness. Ultimately, the debate is not about the existence of socioeconomic inequality, but rather,
“The gap in values between those who are concerned with the well-being of society as a whole and those who are concerned primarily with individual success and the freedom to pursue profits” (Neill)
In the past 30 years, “America’s most affluent families have added to their net worth, while those on the bottom have dipped into ‘negative wealth,’ meaning the value of their debts exceeds the value of their assets.” Additionally, the wealthiest “5% of Americans own two-thirds of the wealth.” In this essay, I go into greater detail about the current state of the problem.
It is undeniable that American capitalism does not function for the majority of Americans. It is inherently unstable, unjust, and incompatible with democracy. Many believe,
“the future for capitalism is highly illegal, highly socially immobile” (Pemberton)
However, this is already occurring in the present. The inequalities produced by the system cannot be undone by minor reforms, but through shifting to a social democracy. Unfortunately, those in power have spread propaganda across the United States condemning socialism as a way to preserve their influence and wealth under capitalism. This has created stigma around the idea of a more socialist society because people don’t understand its actual meaning and implications.
A social democracy would hold corporations accountable through government-imposed regulations in addition to tax incentives that will encourage companies to prioritize public interest. Destructive activities such as environmental pollution and exporting employment to low-wage countries would be outlawed as well. To dismantle the socioeconomic hierarchy, we must reimagine the role of government and the ways it can be used to benefit all Americans, especially low-income households and people of color. A social democracy would call for programs and policies aimed to support the public and create equal opportunity. This may be achieved through worker owned cooperatives, establishing a wealth tax and eliminating loopholes, a higher minimum wage, universal healthcare, free college, childcare, and more.
Although a social democracy still operates under a capitalist framework, it is the most viable solution for the United States and will allow for significant progress. A complete shift to socialism or communism would be unlikely to occur in the current climate. A social democracy is proven to be effective by its success in Scandinavian countries that have reduced the wealth gap while conserving the benefits of capitalism. Sweden, Denmark, Finland, Iceland, and Norway rank highly in happiness, freedom of speech, gender equality, and they are the least corrupt countries in the world. These countries also invest heavily in educational programs, giving younger generations equal opportunity and promoting social mobility in the future.
“Governments can take the cost of a good education away from families, with an immediate impact on the income gap between rich and poor, as the cash benefit is proportionately far greater for families on lower incomes” (Walker)
Thanks for exploring my page, I hope you found it interesting. I would certainly appreciate some constructive feedback. Specifically, what do you think of my solution, and how might you alter it? What types of programs would you like to see implemented?