America is the self-acclaimed “greatest country in the world”, that's true, but ONLY when it comes to one thing: More than 28 Trillion in Government Debts!
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“The combination of economic inequality and economic segregation is deadly. It reinforces the advantages of those at the top while exacerbating and perpetuating the disadvantages of those at the bottom. Taken together, they shape not just inequality of economic resources, but also a more permanent and dysfunctional inequality of opportunity.”
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The above lines by professor Richard Florida are more than enough to summarize what we want to talk about in this article, but the cutthroat capitalism followed in the United States needs more time and words to understand the true picture.
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WHAT IS INCOME INEQUALITY?
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We aim to make you aware of the inequality in simple terms without giving you technical analysis paralysis. Income inequality refers to how unevenly income is distributed throughout a population (of a country or a sample): less equal the distribution = high-income inequality.
To understand the extent of income inequality, the population is usually segmented and analyzed. Different types of income segmentations studied are:
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Gender
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Ethnicity
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Geographic location
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Occupation
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Historical income
DISADVANTAGES OF INCOME INEQUALITIES
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To understand the situation of economic inequality in the United States, we must understand how this inequality influences our country as a whole.
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a) Inequality stifles growth
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higher level of poverty
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Increase in food prices
It directly correlates to increased crime and poor public health.
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b) Inequality increases crime
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There is evidence that shows societies with high-income inequality have a higher crime rate. According to that survey, “the single factor most closely and consistently related to crime.”
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High competition over scarce jobs or resources can drive criminal behavior.
c) Inequality decreases health
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With scarce resources and the rising price of the food occurrence rate of illness only move northwards.
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Access to health care and medical facilities will not be available for poor individuals and families.
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Improper medical surveys can lead to a higher mortality rate.
d) Inequality increases political instability.
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When wealth is concentrated in the hands of a few individuals or groups, the political power tends to become skewed in their favor.
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Manipulation of government laws and regulations to meet the requirements of high-income groups.
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Political figures require wealthy donors to raise money and fund their campaigns.
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Less influence and less political interest by the low-income group.
e) Inequality decreases education
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Increasing tuition costs will make education inaccessible for middle and low-income tier families.
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The absence of private and public scholarships programs makes education unaffordable for the poor.
Apart from the above-discussed points, economic inequality has cascading effects that can be felt across all the segments sooner or later. Hence having a proper balance on income distribution is of critical importance. Still, according to the history and data available, America has a history of favoring the rich, leaving the poor or weaker section of the society to rot.
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SOME RECENT STATISTICS:
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1.) Earning
Between 2019 and 2020, both men and women working over the age of 15 had a 1.2% decrease in their median earning.
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2.) Workforce
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In extension to the earnings, 2020 also witnessed a decline of 13.7 million in the total number of full-time workers. This figure can be broken into: -
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Full-time male, year-round workers- a decrease of 7.5 million
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Full-time female, year-round workers- a decrease of 6.2 million
3.) Income
The household's median income, which stood at $69,560 in 2019, decreased by 2.9% in 2020, rounding up to $67,521. This 2.9% is accounted for by a 3.2% decrease in family households and a 3.1% decrease in non-family households.
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Compared to 2019, the year 2020 showed a significant decrease in the household income of all non-Hispanic Whites, Asians, and Hispanics, with the minimum being 2.6% and the maximum being 4.5%. Statistically, black households didn't have much difference.
4.) Poverty
The poverty rate of 2020 was at 11.4%, which accounts for more than 37 million people. It rose by 1% compared to the 2019 rate of 10.5%; in numerical terms, 3.3 million more people have been living in poverty since last year.
With respect to race, for non- Hispanic whites, the poverty rate increased to 8.2% and 17% for Hispanics. The poverty rate for Asians didn't see any significant statistical change and stood at 8.1%. If you are surprised by this figure, you'll be shocked to know the black community was the worst hit last year as the poverty rate grew to 19.5%.
With respect to age:
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People under 18 years- poverty rate grew from 14.4% in 2019 to 16.1% in 2020.
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People aged 18-64- poverty rate grew from 9.4% in 2019 to 10.4%
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People above 65- poverty rate was constant at 9%
With respect to married couples and families with female householders:
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Married couple families- poverty rate grew from 4% in 2019 to 4.7% in 2020
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Families with female householders- poverty rate grew 22.2% to 23.5%
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Families with male householders- poverty rate was constant at 11.4%
It is safe to conclude that pocket and livelihood of women of color were the worst hit during the last year, and the situation seems to deteriorate year by year.
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5.) Income Inequality:
Nearly 73% of U.S. adults say that major corporations have too much power. And another survey resulted in 70% of U.S. adults saying that the system unfairly favors powerful interests.
Every statistic discussed unanimously points towards the downward growth of income distribution and increasing economic inequality as the rich are getting richer while the poor are continuously getting poorer.
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a) In the last 5 decades, the highest-earning 50% of the U.S. families brought more than half (52%) of all U.S. income in 2018.
b) According to OCED U.S. ranks first among the G7 countries to face the highest level of income inequality.
Gini coefficient used by OCED measures 0 as perfect equality to 1 as complete inequality.
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c) The income gap between black and whites has grown over time.
d) The wealth gap between the rich and low-income families living in America has more than doubled since 1986
e) Middle-class incomes are growing at a much slower rate compared to upper-tier incomes in the last 50 years.
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Since 1970, middle class income rose by 46% (from $58,100 to $86,600) and on the contrary upper-tier income gained by 65% in the same time period. (from $126,100 to $207,400)
BOTTOM LINE:
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America has been a third-world country for many years now but has done a great job marketing itself as a “first-world nation”. But it is now high time we realize other developing nations provide a better standard of living, less crime, ZERO TAXES, and quality of life than the so-called ‘greatest country on earth”.
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