Widening Economic Inequality is a Big Problem in the United States - 550 Words

Widening Economic Inequality is a Big Problem in the United States (Research Paper Sample) Content: NameInstructorTaskDateWidening economic inequality is a big problem in the United States.IntroductionThe current president of the United States, Barrack Obama, has openly declared income equality as being a greater threat to the government compared to the ever shrinking federal budget deficit. The President terms this aspect as "deficit of opportunityà ¢Ã¢â€š ¬Ã‚ , and suggests minimum wage increase, more educational investment, and a tighter safety net as the solutions to this problem.Empirical evidence on the widening economic inequalityA report by David Cay, a winner of the Pulitzer Prize journalist award revealed that there was a mere $59 increase in incomes of the lower 90% of Americans from 1966 to 2011, whereas the top 10% had their income rise by $116,071 (adjusted for inflation) in the same period (Kochar Fry 1). There has been a deepening in wealth inequality over time. In 2013, the top 3% of the American citizenry held 54.4% of the entire economic wealt h, an upsurge from 44.8% in 1989. In contrast, only 24.7% of the entire economic wealth was held by the bottom 90% by the year 2013, a fall compared to 33.2% in 1989. In terms of asset ownership, in the year 2013, only 65.2% of families owned houses, the lowest homeownership rate recorded since 1995. In the same light, there was a decline in the percentage of families owning a business to 11.7%, a record 25-year low. There has also been a continuous decline in the proportion of stock-owning families, although a big portion of the top 10% controlling the economic wealth owned shares thus had a high likelihood of having been beneficiaries of the recent stock market bull run.DiscussionThe origin of this problem is the system which is currently structured in such a way that it favors a selected group of Americans to dominate certain income-producing, wealth creating capital assets such as tools, machines, robotics, super -automation, and digital computerized operations (Reber 1). These non-human factors of production are resultant from technological progress which in turn reduces the need for manual labor, leading to scarce job opportunities and ultimately causes unemployment across different sectors of the economy.The root of the income inequality gap tragedy facing America is the fact that earnings in the form of salaries and wages are reducing in the context of the entire income formula, whereby there is an increasingly huge proponent of capital gains obtained from primary financial assets investment represented within the total income gap, albeit both factors of production are equally essential to Americaà ¢Ã¢â€š ¬s growth prospects (Reber 1).Recent research has also noted that there has been a significant income inequality issue cutting across various racial and ethnic groupings. For instance the income for home owners, whites who are non-Hispanic and college degree holders-headed households shot up in 2013 compared to 2010 (Kochar Fry 1). On the contrary, there was a remarkable decline in the average income of households with renters, Hispanic and non-white families, and non-high school diploma holders-headed households.The American wealthy minority have greatly benefited from the decades of the Federal Reserve extended low-interest rate policies and recent no-interest policy on overnight lending (Reber 1). In addition,... Widening Economic Inequality is a Big Problem in the United States - 550 Words Widening Economic Inequality is a Big Problem in the United States (Research Paper Sample) Content: NameInstructorTaskDateWidening economic inequality is a big problem in the United States.IntroductionThe current president of the United States, Barrack Obama, has openly declared income equality as being a greater threat to the government compared to the ever shrinking federal budget deficit. The President terms this aspect as "deficit of opportunityà ¢Ã¢â€š ¬Ã‚ , and suggests minimum wage increase, more educational investment, and a tighter safety net as the solutions to this problem.Empirical evidence on the widening economic inequalityA report by David Cay, a winner of the Pulitzer Prize journalist award revealed that there was a mere $59 increase in incomes of the lower 90% of Americans from 1966 to 2011, whereas the top 10% had their income rise by $116,071 (adjusted for inflation) in the same period (Kochar Fry 1). There has been a deepening in wealth inequality over time. In 2013, the top 3% of the American citizenry held 54.4% of the entire economic wealt h, an upsurge from 44.8% in 1989. In contrast, only 24.7% of the entire economic wealth was held by the bottom 90% by the year 2013, a fall compared to 33.2% in 1989. In terms of asset ownership, in the year 2013, only 65.2% of families owned houses, the lowest homeownership rate recorded since 1995. In the same light, there was a decline in the percentage of families owning a business to 11.7%, a record 25-year low. There has also been a continuous decline in the proportion of stock-owning families, although a big portion of the top 10% controlling the economic wealth owned shares thus had a high likelihood of having been beneficiaries of the recent stock market bull run.DiscussionThe origin of this problem is the system which is currently structured in such a way that it favors a selected group of Americans to dominate certain income-producing, wealth creating capital assets such as tools, machines, robotics, super -automation, and digital computerized operations (Reber 1). These non-human factors of production are resultant from technological progress which in turn reduces the need for manual labor, leading to scarce job opportunities and ultimately causes unemployment across different sectors of the economy.The root of the income inequality gap tragedy facing America is the fact that earnings in the form of salaries and wages are reducing in the context of the entire income formula, whereby there is an increasingly huge proponent of capital gains obtained from primary financial assets investment represented within the total income gap, albeit both factors of production are equally essential to Americaà ¢Ã¢â€š ¬s growth prospects (Reber 1).Recent research has also noted that there has been a significant income inequality issue cutting across various racial and ethnic groupings. For instance the income for home owners, whites who are non-Hispanic and college degree holders-headed households shot up in 2013 compared to 2010 (Kochar Fry 1). On the contrary, there was a remarkable decline in the average income of households with renters, Hispanic and non-white families, and non-high school diploma holders-headed households.The American wealthy minority have greatly benefited from the decades of the Federal Reserve extended low-interest rate policies and recent no-interest policy on overnight lending (Reber 1). In addition,...