American Capitalism and Wealth Inequality

Over the past decade and more, America has experienced rapid population growth. Relating particularly to the notion of higher birth rates and people gradually living longer lives. This is something that is directly related to economic and fiscal growth. A problem that arises from this however, is that with a growing population, many people wonder when resources will run low. Resources such as oil and natural resources will become limited. As well as the pollution problem America, will face due to higher numbers of individuals, which directly correlates to more pollution. A big reason why it is so hard to govern and come up with reasonable compromises is because our nation has a huge wealth inequality gap. To satisfy everyone is impossible. One topic the textbook hits on is the notion of inequality in terms of wealth. With wealth inequality getting worse and worse by the year, people often wonder how much richer the top 20% of Americans are. For example, in the 1970’s the top 1% only have about eight percent of the national income. Today, the top one percent holds roughly 40% of the nation’s wealth. With such high levels of economic inequality in America, the poverty rates are roughly 50 million people living in poverty. With America’s economy being a capitalist one. Meaning that assets of society are privately owned and that these private companies can control the pricing of their products. With the United States being a capitalist economy is both good and bad. Its good because it makes our economy tremendously productive. The bad part is that it causes societies to become unequal in terms of wealth and income. Lastly, they are also very unstable. They have many business cycles that make the economy boom and then depress.

Something already discussed so far. In fact, during normal economy up rises, CEO’s are making 380x the amount that average workers are making in their company’s. The average worker must work more than a month’s pay to make what the CEO makes in one hour. Is the government doing anything to fix this problem? The truth of the matter is no, in fact, the United States does less distributing of wealth than any other country in the world. Another big problem relating to this is that our government believes that the poverty line is drawn at $11,000 for one individual and $22,000 for two people. That kind of money is impossible to live off. A good place to start is by raising minimum wage up with help of the federal government and this intact will help the lowest percentile of people. A major reason why I believe are democracy and economy is set up is hugely in part because of our founding fathers. At the time, they were all white privileged men with lots of wealth. They intended for fierce competition that ultimately led to the wealth gap we now have. And matters are only getting worse. A big icon like Bernie Sanders has also said that by raising minimum wages, we can lift people out of poverty. No one who works forty plus hour weeks should still be in poverty. Another big notion towards change is fighting for pay equity by signing the Paycheck Fairness Act. This will ultimately allow all women, rich or poor, to make the same amount of money a male worker would make. These are all just small things that can be done. Obviously it will take a lot more than just these actions to fix the bigger problem. Watch the video below for more information on the income/wealth gap America is facing.

4 Responses to "American Capitalism and Wealth Inequality"

Timothy Miller says:

February 7, 2018 at 5:54 pm

This post is very eye-opening and raising many concerns for debate. Regarding your first paragraph, I think it goes hand in hand with what we covered in class on Tuesday. The factions created in society due to the wealth gap create battling political opinions solely based on the amount of money made by individuals. With the rich becoming richer and the poor becoming more poor the factions in society will only get stronger. The fact about CEOs making 380% more than their workers is crazy. I assumed the disparity in salary was large but not that large. I do believe the CEOs of companies deserve to make a great deal of money for running businesses, but I don’t think they should make that much more than their employees. Raising the minimum wage, which you mentioned, would be a good idea to take those 40 hours/week workers out of poverty. I’m not sure how much I agree with Bernie Sanders nor do I really understand the lasting impacts of raising the minimum wage, but to me that seems like the most logical way to help out struggling workers and families. Thanks for your post!
Jacob Weis says:

February 10, 2018 at 4:33 pm

Alexander,

Very well put together post. I thought that you outlined a broad range of topics and connected the different aspects together nicely. One thing that I would like to add upon is the statistic that CEOs make far more than their employees. I find it hard to agree with you in regards to the government needing to fix this “problem”. Chief Executives deserve the rewards of all of the hard work they invested to become the leader of their craft. Most CEOs take the risk of starting their own company rather than working and taking commands from somebody else. I believe that if you have the guts and the inspiration to become a CEO, then earning far more than the average worker is justifiable.
Hannah Grow says:

February 12, 2018 at 8:07 pm

Alexander,

Thank you for your thoughtful post regarding the substantial wealth inequality in our country today. There has been a lot of discussion about the Trump administration’s massive tax cuts, which has arguably only benefitted the wealthiest citizens and widened the wealth gap in America. Your post reminded me of another change in policy by the Trump administration that should be considered a setback in bridging wealth gaps. Trump got rid of a law put in place during the Obama administration that required corporations to state their pay data by gender, race, and ethnicity. The idea behind the rule was to encourage pay transparency, which would result in closing the gender wage gap that is so prevalent in business today. The argument made by the Trump administration was that pay transparency was not creating the desired results and was financially taxing for companies to produce the data so therefore the rule was no longer necessary. However, I believe that encouraging pay transparency was calling much needed attention to wage inequality and putting pressure on employers to change their ways. These two examples lead me to question whether or not Trump is really acting with the intention of closing both the wealth and gender wage gaps, or if it is the nature of our capitalist economy that is preventing these inequalities from balancing.
Santiago Rivas says:

February 14, 2018 at 10:34 pm

Alexander,

Really good post and with very strong and exemplifying data. The points that you make in your post are big problems, not only in the US, but around the world. That being said I think this post exemplifies the dilemma that the American society undergoes every time this subject is visited. People think that the government should do something to help out the poor people, on which I personally agree, but at the same time Americans don’t want the government getting to involved in their lives, or “getting too big”. This is The US is based on liberal ways of thinking of the government, therefore the US government should not get involved in the way the market operates and work, and social policies receive a lot of pushback because of this same distrust of the government getting too big. The truth is, you cannot have the best of both worlds; little government involvement and redistributive social policies. In this case, I guess, the option that the US society is being forced to explore is “choosing the lesser of two evils” in order to address and ultimately solve this problem.

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