Wealth in the Hands of the Few: How does Wealth Inequality Affect Local Communities and the American Economy?

15 0

 

Introduction to Wealth Inequality:

Graph displaying the average income of the top 1, 5, 10, and bottom 90 percent of Americans. (Powell)

        Wealth inequality is used to describe the unequal distribution of wealth in an economy. It doesn’t mean that everyone in the economy is either rich or poor but that a high percentage of wealth in the economy is highly concentrated in a small group of people. Wealth inequality in principle doesn’t have to be bad if everyone in the economy is overall doing well. Still, when wealth inequality is at a certain level it promotes below standard education for lower-class Americans, reduces overall participation in the economy which hurts businesses, and truly benefits no one from rich to poor.

Chart of family income inequality from 1955 to 2010 in segments of Democratic and Republican presidents.(Jacobs)

How We Got Here: 

        To understand wealth inequality it’s important to understand its causes. In post-WWII America, taxes and regulations were relatively high and because of this, the American middle class thrived (McElwee). But later during the Regan era, there was a push for deregulation and trickle-down economics which cut taxes for the rich. This led to massive wealth inequality and the subsequent decline of the middle class immediately after these policies were implemented in 1980 (picture left). This trend of increasing inequality is still happening today and is intensified by the open market of the tech industry. Eric Nee explains this unregulated market, “Software standards for the Web were open, license-free, and controlled by an international community…The possibilities for the Web were endless: open government, open data, open access, free education, and free information…the Internet became dominated by these same rebels—Facebook, Amazon, and Google—all of whom pursued profit and market dominance as aggressively as Standard Oil or US Steel ever did” (Nee). With a deregulated dominant industry like tech and a trend of inequality in the first place creates the level of wealth inequality in America today. 

Introduction Video:


My interest in this topic stems mostly from a documentary I watched a couple of months ago called Capital in the Twenty-First Century about this growing wealth inequality in America and what impacts it can and is having on our society. Not only this but I always wondered why there were people that I knew who were making it from paycheck to paycheck and others who had such massive amounts of wealth that they could fly to anywhere in the world at any time. When I came to my school Head-Royce in 6th grade this wealth gap became more and more apparent to me. I wondered why my tuition at Head-Royce was equivalent to the yearly salary of some workers in the United States. This seems to be a topic that I have a personal and academic interest in and as American wealth inequality is on the rise it seems like a perfect time to understand this topic more.

How You Can Help:

https://help.donorschoose.org/hc/en-us/categories/200125163-Making-donations

        To start, charities like Strike Debt help provide a safety net for people that amass a lot of debt by helping to eliminate it. This can help them assume more capital from saving their money instead of spending on their debts (Wile). Another organization that works to close the gap of inequality is called DonorsChoose which provides materials to teachers and students in underserved communities improving education and making sure teachers don’t have to spend their own money on school(Wile). These organizations and others like them help to decrease income inequality and on a personal level, you could donate or volunteer at these charities. This will make a meaningful impact on the people in your community but on a larger scale charities won’t decrease wealth inequality in the country by an adequate amount. To do this we need government policy change and to make a change in a democracy it’s important to go out and vote. If you’re not of legal age to vote you still have influence in elections by campaigning for a candidate that supports legislation to decrease wealth inequality. Personally, for myself, I will campaign for candidates that support a decrease in wealth inequality by knocking on doors and handing out flyers, not to mention when I turn 18, to vote.

https://strikedebt.org/

 

 

Big Picture:

(Wind)

        Lawmakers still need to know what policies will make a significant difference in decreasing wealth inequality. One of these policies is to raise the minimum wage to around 12-15 dollars an hour around the country which would help people like laborers, and restaurant workers gain more money. These types of workers usually are a part of the lower class and giving these workers more money around the country through their jobs can help lift up the lower class. Another way to help on the macro-level is to strengthen government safety nets like Medicaid, welfare (Bernstein, et al). Also fighting for individual rights on the internet and privacy is essential not only for the public but also for keeping the tech industry at bay (Nee). All of these policies combat wealth inequality on different fronts; if enacted these policies would make an extremely meaningful change to an unequal current American economy.

Conclusion:

        In conclusion, wealth inequality promotes less growth in the economy and makes it increasingly more difficult for people with a small amount of wealth to climb the economic ladder. The reality of today does not have to be the reality of the future if we can act on it soon and aggressively. Supporting local charities that aim to close the gap between the rich and poor is a start but where people can make the most change is to stay politically active and go out to vote. Supporting and encouraging lawmakers that sponsor legislation to reduce wealth inequality will make the most difference. It will take all of us to work together and decrease wealth inequality in America from the micro to the macro.

Work Cited: 

https://docs.google.com/document/d/1BhHO0WOAKRxZ3kU4hdxX6Nna7kmXuuEKxWstrc0Axvw/edit?usp=sharing

 

 


Thank you so much for reading my Website! I hope it inspires you to think more about the damage wealth inequality has done and what you can do to fight it. If you have any clarifying questions or feedback it’s more than welcome. 

Thanks, 

Theo Wilson 

0 Comments
Theo_87

Theo_87

Student at Head-Royce School, Oakland, CA USA.

Leave a Reply