American Diversity and Income Inequality

Over the course of many decades, the American population has been rapidly growing. The American population has increased nearly 11 percent from 2000 to 2015. This rapid growth in the population is due to the increase in immigrants moving into the United States, as well as climbing birth rates. With the sharp rise in population and diversity in the US, there comes an increase in income and wealth inequality.

Under the United States’ capitalist system, there seems to be a large flaw in this system when it comes to people living in poverty. What seems to be the biggest flaw in this system is that poverty is not equally spread throughout the population but is statistically worse for different races and ethnic groups. For example, in 2015 24.1 percent of African Americans and 21.4 percent of Hispanics were considered to be living under the Federal Poverty Line. Compared to only 9.1 percent of Whites living under the poverty line, it is clear that there is a substantial disadvantage in the poverty rates for racial minorities. Although the poverty rate has been declining in recent years, it still seems that there is a flaw in how the government attempts to fix this racially divided poverty rate.

Because of the huge gap in the poverty rates of different races in America, income and wealth inequality are direct products that stem from the poverty rates. By 2015 the top 20 percent of households in America generated 51.2 percent of the national income. This statistic shows how income is very unevenly distributed among households in the US. Furthermore, this statistic is directly correlated with the percentage of minorities that are in poverty. These high poverty rates in racial minority groups are in-turn showing that they are taking home a significantly smaller share of the national income than Whites. In our economic system, the government has limited control in the pricing of goods and services, as private companies make up the majority of the US economy. This means that private companies and the markets will dictate prices which do not work in favor of minority groups. So what can we do to change the wealth and income dynamic in the United States? The most obvious and most effective way to change this is to create more jobs. This is where the government plays a role in helping to aid these flaws in our capitalist system. An increase in jobs will be the most important thing in order for minority groups to be able to afford market-priced goods and services. As far-fetched as it may seem, the best way to combat high minority and income/wealth inequality will be for the government to proliferate jobs in the future.

8 Responses to "American Diversity and Income Inequality"

Kelly Gough says:

February 11, 2018 at 4:28 pm

Thank you for shedding some more light on the issues of wealth inequality. You bring up an interesting correlation between the rise in immigration and the increase in income and wealth inequality.

Some of the issues you point to for this wealth inequality include a substantial disadvantage in the poverty rates for racial minorities and the governments inability to come up with a solution to this issue.

What kinds of solutions do you believe could be implemented in order to combat this growing issue?

How can the poverty rates lead to more equality?

Perhaps more companies should follow Walmart’s initiative to raise the minimum wage to try and close this gap.

Another possibility you speak of is the creation of more jobs. Currently, the unemployment rate in the US is incredibly low, so I wonder if these jobs are just not available to the market that needs them.

You also illustrate the point that the government needs to proliferate jobs in the future. What kind of jobs do you have in mind? I am constantly seeing companies posting hiring flyers so I am having trouble understanding the point of view that there are not enough jobs out there. Perhaps instead we need to focus on transportation for people who do not have the means to go to these jobs or helping people to figure out how to land a job, some sort of funding for career development or resume/interview assistance may significantly help people to get into a much needed job?
Cassandra Martin says:

February 11, 2018 at 5:46 pm

Everett,

I appreciate that you looked deeper into an issue which affects so many people in this country. However, I do have a few concerns with your blog. First being that I am having a hard time accepting some of your statistics, when there is no link or source reference to the studies on income inequality and poverty rates. To see if I could find more information I did some research on the topic and found a different standpoint based on statistics. Your first point was that the U.S. population is rapidly increasing. However, a New York Times article (https://www.nytimes.com/2016/12/22/us/usa-population-growth.html) says that the growth of the United States population is at its slowest since 1937. The article is also in contrast with your evidence as it states that this is due to low birth rates, and the baby boomer generation entering their 60s and 70s.

I also had a concern with directly relating the racial disparity in poverty rates to a flaw on the government’s behalf. I would’ve like to read more about the ways government is addressing the issues, and how you feel it could improve its methods. I also think there needs to be more evidence supporting your claims that income inequality and distribution “is directly correlated with the percentage of minorities that are in poverty.” I agree with Kelly’s comment that there is probably something more playing into this than a lack of jobs. I would’ve liked to see a discussion on education levels, household lifestyles, etc.

Overall, I think your subject manner is very interesting, but it could have benefited from using more substantiated evidence, and possibly even a modern-day example. Even using the West versus East Ends of Richmond could have provided an example of how inequality is distributed in the United States.
Stephanie Ellicott says:

February 11, 2018 at 9:23 pm

Thank you Everett for your post.

I thought your post was very intriguing and thoughtful, however there were a few aspects that I was not sure about. Firstly, would you say that any increase in the population is solely due to immigrants entering the United States and the rapid increase of birth rates, or are there additional factors?

When you say “there is a flaw in how the government attempts to fix this racially divided poverty rate,” I would love to hear your insights on why you think this is, or have some sort of stance on the issue. I can tell that you disagree with the notion that every race/ethnicity is financially equal, but I’m not entirely clear why you believe it should stay this way or not.

Furthermore, I found an interesting article in the Los Angeles Times (http://www.latimes.com/business/la-fi-pwc-robotics-jobs-20170324-story.html) about the innovation of technology becoming an issue within the workforce. This alludes to your point about the need for an increase in jobs. My particular stance on this issue is that with increase in technology and automation, as referenced in the article, there will be less and less jobs available. Therefore, how can the government help increase jobs if this issue is not necessarily preventable?

I would have to agree with both Kelly and Cassandra in that more evidence of these correlations between the poverty line and income inequality. However, I enjoyed reading your blog post and thought it brought up valid flaws in our system.
Kayla Corbin says:

February 11, 2018 at 10:50 pm

This was a very insightful post!
I do believe that the government doesn’t play a strong enough role in stopping income equality and the obviously horrendous distribution of wealth in America. You did well explaining the current status of wealth and poverty in America and how it relates to minority groups, and it really got me thinking about how ineffective the government has been in this problem. Even though we have a welfare system, historically the government seems to do little beyond that to really aid lower income people. From the way districts are made, to the quality of education in our public school system it seems as if the government does a lot but how much of what they do is actually focused and productive?
I do agree that there could be more evidence used to show the correlation between race and income inequality, but it’s certainly common knowledge that racial inequality and income inequality go hand in hand. Like I mentioned before, how districts were red lined, the lowering of property values in minority neighborhoods, the quality of public education.
Marc Bosch Valentines says:

February 12, 2018 at 1:14 pm

Everett,

I really enjoyed reading your post because it offered a clear and well-summarized view of America’s major issues regarding wealth and income inequality. I particularly think the government should aim at not just creating new jobs, but starting with providing those people with enough training for enrolling into high-skill positions that will allow them to achieve a higher salary that will in turn allow to make a better distribution of income. More subsidies and scholarships are needed from the school level up to college to guarantee that everyone has an equal opportunity, regardless of whether they do good or bad at the beginning. It is clear that not everyone is under the same conditions in order to get a good grade, this is why i consider that the first thing that should be considered when giving scholarships should be the income of the family.
All in all, the role in the government should be to foster equality policies and adopting a more European approach when handling those issues, that is, having a greater role in the economy. It is true that this may create other inefficiencies, but it would be the only way to establish a more equal and fair society.
William Roberts says:

February 12, 2018 at 10:02 pm

Hi Everett,

I thoroughly enjoyed your post. However, I don’t think job creation will have the biggest impact on hindering the growth of economic inequality. Don’t get me wrong, it is an absolutely crucial step, but I think there are more important steps to proceed it. First, I think a good start to narrowing the gap between the wealthiest and the poorest would be to raise the federal minimum wage. No one in the United States who works full time should live in poverty. Next, I think investing in equal opportunity for education for minorities will increase the number of minorities in high-skill, high-paying jobs. A progressive income tax rate, where the wealthiest pay higher taxes, would distribute income more evenly, and help to invest in education for minorities. The taxes collected from the wealthy should also be invested in infrastructure, which, in turn, will generate more jobs. I think job creation is important, but I’m not sure it’s where we should start, especially when the fastest growing jobs in the United States (fast food, retail, childcare, eldercare, etc..) tend to pay very little.
Akshit Sharma says:

February 13, 2018 at 12:23 pm

Hi Everett, thank you for your blog post, it was a good read. I do, however, have a few points on contention that I would like to bring up. As you mention, there is a racial divide in poverty in America and racial minorities are at a disadvantage as a result of that, but we learned recently that as far as median income is concerned, Asians have a higher level than Whites in the United States but that does not necessarily mean that Whites are at a disadvantage. Another point on which I would have to politely disagree with you would be the suggestion you put forth of dealing with the issue of racial divide in poverty by making the government create jobs so that minority groups would be able to afford market-priced goods and services. My issue with this proposed solution is that if the government were to create jobs that would mean they would have to increase spending, which would consequently mean higher taxes. People in general have a negative attitude toward higher taxes and would be unhappy paying from their pocket for benefits that do not even reach them, and that could possibly lead to some social unrest and maybe further discrimination against minorities. Another drawback to that is even if the government does create these jobs, will it be acceptable for them to turn away qualified candidates of non-disadvantaged races? I am sure that would not be the most optimal solution. Having presented my reasons for disagreeing with you, I would be remiss if I did not put forth a feasible recommendation that could cater to the drawbacks I highlighted as well as help fix the problem you mentioned. My suggestion would be for the government to increase the cut-off for people below poverty line from $12,000 to $25,000 as well as give tax-breaks to below-poverty-line (BPL) people for starting their own businesses for the years until they not only break even but start making profits or a period of 5 years, whichever is sooner. That would help get these people out of poverty and teach them self reliance as well.
Michael De La Cruz says:

February 14, 2018 at 12:54 am

Everett, I don’t quite agree with you on your points about income and wealth inequalities, and what we could possibly do to fix it.

You said how income and wealth inequalities are direct products that stem from the disproportionate poverty rates among minority groups. However, income and wealth inequality refer to the uneven distribution of income in a population. While it is true that minorities are the ones who bear most of this inequality burden, an unequal distribution of poverty is not the same thing as income and wealth inequality.

Your solution to fix the problem of income and wealth inequalities is to simply create more jobs. However, creating jobs so that more people will have incomes will not take any money from the people at the top and make it trickle down to the bottom. It will do nothing to close the gap since the people at the top will still be making all their money.

Maybe one thing we could actually do is tax the rich proportionately to the middle class. In this article by Tom Kerscher, he points out that Middle Class Americans pay higher tax rates than millionaires. These disproportionate tax rates are most likely contributing to out income inequality, and fixing them might help us close the gap.

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