Income Inequality in America
In every society there will be those who are better off than others. There are people who are poor and people who are rich. That is the natural way things are. The American way of life for a long time was to have a society where the majority of the people are not poor or extremely rich, but rather in a middle class. After the end of World War II America enjoyed a time of prosperity where everyone's income rose. Unfortunately that trend didn't last forever and in the 1970's the middle class began to dissolve. From the time after World War II until 1973 the graph of annual growth rates of household income looked like a picket fence, meaning that the poorest fifth of the population income grew at about the same rate as the wealthiest fifth and everyone in between. From 1973 to 1993 that graph begins to look more like a staircase with the farthest left stairs being underground. The poorest fifth of the population actually began to make less money while the wealthiest still enjoyed considerable growth of income. This trend is leading America into an age of huge income gaps between the very rich and the poor. The best way to demonstrate the new trend in income distribution is to look at the salaries
The recent Bush tax cuts are a prime example of this. (Cassidy,6)The rise in immigration helps to partially explain the rise in income inequality. The politicians know that around election time they are going to need funding if they plan to get elected. The annual growth rate for family income was between 2. The estate tax is a tax on the very wealthy. This shows that income inequality was on the rise and that the effects of a new market for high skilled workers helped that. The average family experienced only a small growth of 1. The middle class is being eroded away while the wealthy become richer and richer. These raises in the minimum wage help to increase the income of very low-income families. Computers raise the productivity of workers who are skilled enough to use them. The high skilled, college educated workers are earning higher and higher wages while the low skilled workers income is falling. About one third of the fall of relative wages of high school dropouts can be linked to the immigrants.
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