Sunday, January 23, 2011
Rising inequality in the United States
Inequality has risen in the United States and there are important reasons why this is a problem. Inequality and poverty go hand in hand. The reason behind this is that lower classes lacking access to education and benefiting less form all the factors considered in the solow curve leads in the long run to more poverty. Furthermore inequality directly leads to social and psychological aspects that harm society. Competition is one of societies key aspects of society and increasing inequality has a a negative psychological effect on the lower classes. Inequality does not have a direct impact on a countries GDP, at least not in the short run, so many may not consider inequality as a severe problem. Tension between social classes and the obstacles that inequality imposes on upward mobility within the social ladder are issues the inequality leads to that affect society in a negative way. Countries with a lower Gini coefficient like Norway experience less political and crime than countries with higher instability like Brazil for example.
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4 comments:
It's really interesting how the article points out the different ratios of growth in the U.S. and how, despite the rich growing quicker than the poor, that Gordon says that the bottom 99% of the population hasn't seen a change in inequality. We can then see how the article points out that the top isn't working harder and not contributing back the 80% more that they are making which ties in with the article below and how we can work to distribute that extra income to help alleviate the inequality not only in the U.S., but in countries around the world.
It’s interesting to see the different aspects of inequality within a country’s society and economy. For instance, one of the founding ideals that makes America so appealing is the notion that a person can not only get rich in a short amount of time, but can continue to get rich even after they have reached a level of comfortable living. In the same breath, that drive for economic dominance creates a competitive atmosphere so powerful the majority of people fail and enter a poor economic state. Distributing wealth more evenly almost acts like a safety net for people who do fail, benefiting a society as a whole in the long run by virtually phasing out poverty. What it boils down to is the benefits of economic inequality, the driving desire to make as much money as possible even if the majority of people lose out, outweigh the costs of a poorer class of people in a society?
I think the most interesting thing about this article is the possible reasons that are given for income inequality. For me, the medical reasons are a bit of a stretch, although they are definitely thought provoking. In any case, it is clear that the increasing income inequality in the US is creating a lot of social unrest, and measures may need to be taken to increase the equity. Hopefully it does not take too much away from the efficiency of the economy.
Although many believe that it is easy to climb up the social ladder in the U.S. this has been proven to be untrue recently. In the lower class, the vast majority actually do not make it out while the upper class generally find it extremely hard to fall out of their income bracket. Recent studies have shown that upward mobility in social classes is tremendously hard to achieve. Economic inequality and lack of social mobility are inherent components in a capitalist society.
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