Ever since the emergence of civilization several hundreds of years ago, social inequality has been a prevalent aspect of many societies across the world. This social structure developed as a result of several factors amongst them political and economic status in the society. During the early stages of civilization, social and political status was closely related whereby the few powerful political leaders tended to be wealthier than the lesser politically influential majority.
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Although this dynamic is still prevalent in the developing countries, a lot of changes has been witnessed over the past century in the developed world. Economic inequality in the United States dates back to hundreds of years ago during the colonial era. It is a well-known fact that the first wave of Europeans to arrive on the American shores were peasants fleeing economic inequality and lack of opportunities back at home.
During those early days, economic inequality was not prevalent in the society as most of the people were poor and looking to make a living in the unexplored wilderness. With time, however, prosperity amongst some settlers as well as the arrival of the colonialist marked the emergence of economic inequality in America. Other dynamics such as the arrival, of slaves, racial diversity and industrialization further complicated the matrix of economic inequality in the United States as distinct economic classes became prominent. The emergence of this distinct economic classes has been widely studied at both academic and policy levels with factors such as race, family structure, patriarchy, segregation and geographical location. Over the past few decades, the issue of economic inequality in the American society has become a huge topic at both social and political levels. Economic inequality formed an important element of Martin Luther King Juniors1960s social justice movement. Amongst the main topics of discussion in this issue of economic inequality in the United States is the role of the government as a cause and solution to the rampant high levels of economic inequality in the country. Ever since the era of social justice movement in the 1960s, the federal and state governments have taken a particularly keen interest in this social issue of economic inequality in the country to understanding and finding solutions.
This paper looks at this issue of economic inequality in the United States with a special focus on the responsibilities of government and its policies in addressing this important social issue. State of economic inequality in the United States of America With a Gross Domestic Product (GDP) of approximately 18.57 trillion dollars in 2016, the United States is the worlds biggest economy and has held the position for approximately the last hundred years. Over this period, the countrys economic success spilled over to the citizens resulting in a notable economic prosperity of the American population regarding several important indicators such as rates of unemployment, consumer leverage ratio, stock market prices and retail sales. Despite the countrys economic success, the country still has notably higher rates of poverty and economic inequality compared to some of the developed countries in Western Europe.
The rates of economic inequality like in the rest of the world fluctuate from time to time depending on several factors such as the state of economic performance” ” both domestic and globally. The global financial recession witnessed between 2007 and 2010, for instance, had a major impact on the rates of economic inequality in America and across the world. Although the state of inequality has improved since then, the rates of economic inequality are still a major issue to the government and other concerned stakeholders (Saez et al., 527). The race is the most important factor that has been attributed to economic inequality in the American society for a long period now. The United States has for several centuries been one of the most racially diverse nations in the world hosting people from different parts of the world. Apart from the native red Indians who have long been outnumbered, America is home to other races including whites, blacks, Hispanics, and Asians. As a result of various social and historical factors, the economic well-being of Americans from these different racial backgrounds has been determined to vary widely.
In average, the whites and the Asians are far wealthier than the Hispanics and the blacks. According to Taylor (2011), the median net worth of white household in 2009 was $113,149 compared to $6,325 for the Hispanic household. The black households, on the other hand, had an average net worth of $5,677 (Saez, et al., 557).Causes of racial, economic inequality in the United States Racial, economic inequality in the United States has been around for hundreds of years and is a product of various social and historical background in the society. These social and historical factors determine key group and individual economic aspects such as economic opportunities, income, and social, economic mobility. Intergenerational poverty, segregation, racism, patriarchy, geography, family structure and individual choices are some of the factors that have been attributed to the racial, economic inequality in the United States. Intergenerational poverty is one of the reasons identified to be the cause of racial, economic inequality in the United States today. Intergenerational poverty refers to the transmission of poverty from one generation to another, where poor parents have poor children who are likely to become poor themselves when they become adults. Bloome (2014) studied the relationship between racial inequality trends and the intergenerational persistence of income and family structure.
The research found that intergenerational poverty dynamics amongst the different races in America seriously worked against the historically less prosperous Hispanics and blacks as compared to the historically prosperous white and the Asian communities. According to the research, it is particularly difficult for African American children to escape low incomes compared to the three other races. Additionally, black and Hispanic kids born to upper and middle-class families are more likely to find it difficult to maintain their status afforded to them by their parents (Bloome, 2014). Family structure is another important factor that has been determined to be responsible for racial, economic inequality in the United States. Family structure essentially refers to the way families are arranged according to roles, size, power, and hierarchies. Family structural organization have been known to differ amongst different races contributing to the economic inequality amongst the different races. One-parent families, for example, is a very common family structure amongst African Americans as compared to Asian and white Americans. This family structure widens economic inequality between the different races because parental absence weakens the processes that reproduce socioeconomic advantages.
For example, children raised in poor single-parent families may not gain access to quality education due to financial issues and as a result compromising their future progress towards financial equality with kids raised in two-parent families (Bloome, 2014). Geography is the other factor that has promoted racial, economic inequality in the United States over the past century. Geography, in this case, refers to the physical location and its related physical factors that affect economic condition of the people living in these areas. Historically, particular minority races have inhabited particular regions or states for one reason or another. A large number of black Americans live in the down southern states whereas the over two-thirds of American Hispanics live in the five states of Arizona, California, Michigan, Florida, and Nevada. This concentration of a large number of a particular race in a single geographical area makes them susceptible to economic risks which might further worsen economic inequality. The 2007 global economic recession that seriously affected Americas housing sector saw the net worth of many Hispanics households plummet to historical levels because the five states where the majority of them lived were amongst the hardest hit areas.
Their median net worth crushed from $51,464 in 2005 to $6,375 in 2009, a loss of 88%. Considering over two-thirds of Americas Hispanic population resided in these five states as compared to less than one-fifth of the rest of American races, this helped to increase racial, economic inequality against the Hispanics (Taylor, 2011). Racial segregation is another important factor attributed to the development of racial economic in American society, particularly in the urban centers. The rising cases of poverty levels in American cities in the 1970s were found to have been exacerbated by residential segregation particularly in favor of African Americans. Using a hypothetical example, Massey (1990) found that imposition of racial segregation in urban areas improves the economic situation of some white people while all the blacks fared much worse. The hypothetical case study also showed that as increasing levels of segregation corresponded to a steady rise in the levels of poverty concentration among blacks while for the whites the concentration of poverty levels went down (Massey, 332). Governmental responsibility in Americas economic inequality Economic inequality is a normal aspect of modern day society, especially in the capitalist economic system. Therefore, the government is not responsible for Americas economic inequality. Individualism and personal and self-help control are some of the basic value on which the United States as a country was founded on. This value places personal responsibility on individuals financial decisions as compared to government control as seen in other countries. It is for this reason that the responsibility of economic inequality in the American society today cannot be directly put on the government.
That said, the government plays an important role in the creation and development of economic inequality through its policies and actions. Whether deliberate or unintentional, government policies and other actions have helped lead to the emergence and widening of economic inequality in the country at different levels. The most obvious government policy that has created economic inequality over the years in America is the issue of taxation and tax breaks. The countrys taxation policies that heavily tax the majority poor and the middle-class Americans while offering the few super-rich Americans tax breaks has played a huge role in the creation and widening of the countrys economic inequality. A 2015 study conducted by Taxation and Economic Policy discovered that Americas poorest 20 percent remitted an average of 10.9 percent of their income as taxes while the middle 20 percent of Americans paid 9.4 percent. The top one percent were only found to pay around 5.4 percent of their incomes to taxes (Gilens, 2012). In alleviation economic inequality in the country, the American government can also play an important role through policies and actions.
Over the years, the government has tried to implement various policies and projects aimed at closing the gap between rich and the poor. One such policy includes affirmative actions that are aimed at enabling the minority, and economically disadvantaged groups work towards achieving financial progress. Affirmative actions include policies in areas such as employment position and access to education in the countrys top learning institutions. Apart from affirmative actions, the government has also tried to formulate policies and projects meant to spur economic activities and growth in areas where people are economically marginalized. Such projects may include infrastructure projects as well as enabling this disadvantaged people to access training and financial resources to start businesses. One area that the government can still work on is leveraging on the taxation policies to streamline them so that the super-rich Americans contribute a fair share of their income to the countrys tax burden.
Nevertheless, limits to the extent of government intervention in the alleviation of economic inequality. One important observation for the policies is to make sure they do not infringe on the rights of Americans to pursue their financial freedom. This is important to ensure that the basic values on which the foundation of the United States as a country was founded on. Additionally, taxation policies intervention also need to be carefully worked out so that it does not affect the countrys capacity to attract and maintain investors (Gilens, 2012).Conclusion In summary, it is obvious from this paper that economic equality is still a major issue in American society today. Being an age-old issue, economic equality has played a major role in shaping American society to date is likely to remain so for the foreseeable future. This means that government and authorities need to invest their time and resources in understanding the background of economic inequality in America.
This will help formulate and fine-tune approaches towards solving the issue for posterity and prosperity of the American society.
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