Essay about Economics Inequality

Submitted By tinngu
Words: 3817
Pages: 16

Executive Summary

On August 29, 2005, Katrina, one of the deadliest and the most detrimental natural disasters in the history of America, hit New Orleans and other southeast regions. The aftermath was devastating. Approximately 1800 people died in the hurricane and sequent flood, more than one million people were made homeless and the overall property damage was calculated around 80 billion dollars. Ever since the 1906 earthquake in San Francisco, America has never seen such catastrophe like this. Natural disaster such as Katrina struck everyone from every title and all walks of life, and while Americans were easing the wound, Katrina has exposed a disturbing aspect of modern capitalist society: economic inequality.

America, at the genesis of the millennium, is concerned not only about the current financial malaise but also about the economic future. The insecurity pinches right at the heart of the one concept that makes America unique: the American Dream. The once cherished view of America as the land of opportunity, where people from humble origins can- by hard work, determination, and ambition- achieve virtually anything is being shattered by the huge economic gap between the poor and the rich. America today has the most unequal dispensation of wealth and income of any wealthy democratic countries.

This major report will examine how such dynamic and growing capitalist economy as America has created such disparity, and it will examine economic inequality from four salient perspectives: 1. The middle class consumers: The backbone of capitalist economy. Since 2008, the middle class was in danger of collapsing due to declining wages, escalating tax rates, and soaring unemployment. 2. Corporations: This report will explain how corporations, in the pursuit of their own interest, had worsened inequality. 3. Community: Studies suggested that crime, drug use, divorce rate, poor education performance, and illness are categorically correlative with income disparities. 4. Economists: Economists have spent a great deal of energy explaining the escalation of economic inequality using the Lorenz curve and the Gini coefficient.

I. Introduction

America is embarking upon a challenged path ahead. The country seems to have lost the ability to reinvigorate itself after the hard-hitting of the economic crisis in 2008. U.S. household from every level of income and every walk of life is feeling the heat in all respects. Graduate students are struggling to find jobs that meet their expertise. Unemployment rate is at all-time high, despite a slight drop in 2013. The median income of the U.S. household has dropped six percent since 2000; the bottom 20% has experienced a sharp decline (Mishel, 2012). Millions have lost their home to foreclosure; millions more are losing their jobs. The economic turmoil has put everyone on edge.

On the other side of the spectrum, the U.S. is not entirely about a fragile economy – stagnating wages, soaring unemployment, or declining income. Amid such agony and insecurity, the top one percent has enjoyed a steady recovery. Corporations have reported skyrocketing profits; nine in ten of the most valuable companies are from the U.S. The top one percent grew by 11.6% in average real income per family and pocketed 93% of income growth (Saez, 2012). While the four years after the financial crisis in 2008 have been a struggle for survival for many, it has unveiled another fervent problem that may split America in half: the economic inequality crisis.

Economically, American has become tremendously wealthier and greatly unequal. The U.S., by every imaginable dimension, has the most unequal distribution of income in all of wealthy democratic countries. . Senator Bernie Sanders (2013, The Soul of America, para.2) stated that: The top 1 percent owns 42 percent of the financial wealth of the nation, while, incredibly,