Economic Inequality In America

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The Widening Divide SID: 23448724 Economic inequality is contributing to a plethora of social and financial issues in the United States. Despite increasing GDP growth and high rises in the amount of national productivity, the middle class has experienced minimal hourly compensation and median incomes (Reich Jan. 22). Simultaneously, the wealthiest Americans have seen surges in their household incomes and accumulations of wealth. Economic inequality encompases disparities in regards to income, wealth, and social opportunity. The widening economic differences between Americans has resulted in a surge of financial and social problems. Economic inequality becomes problematic when upward social mobility is …show more content…
The richest 10 percent, 1 percent, and .1 percent of Americans all saw peaks in total share of income in the years 1928 and 2007. In 2007, the top 1 percent had a 23 percent share of the total income in the United States (Reich 21). During these two time periods, America’s wealth was found in the hands of the few elite. Productivity rose, but with meager wages for the majority of Americans, demand fell behind. The increase in wealth for the top Americans resulted in more speculative marketplaces “making the economy more susceptible to cycles of boom and bust” (Reich 29). In 2007, the middle class did not have the financial capability to sustain an adequate lifestyle, and many consumers sought out loans as a solution to their problems. Middle class Americans went deep into debt. The extreme economic inequality in these two eras caused an increasing indebtedness of the middle class and provided the wealthy the ability to “bid up the prices of speculative assets so high”(Reich 25). The net result was disastrous when 1929 and 2008 were plagued by the worst depression and recession in America’s …show more content…
Upward social mobility has stagnated as it has become more difficult for the poor to work their way to a higher financial status. The middle class has also suffered immensely as wages have not been adjusted for inflation. The middle class has become substantially in debt as they attempt to sustain an adequate quality of life. Due to the rising debt of the middle class and speculative asset investments from the wealthy, the economy has become increasingly unstable. Economic inequality has become problematic for citizens at all points of the social ladder. If such immense financial disparities continue to exist, the social and economic consequences may prove disastrous.

Sources
Brooks, Arthur C. "The Downside of Inciting Envy." The New York Times. 1 Mar. 2014. Web. 4 Feb. 2016.
Graham, Paul. "Economic Inequality." Jan. 2016. Web. 3 Feb. 2016.
Reich, Robert B. Aftershock: The next Economy and America's Future. New York: Alfred A. Knopf, 2010. Print.
Reich, Robert B. "The Big Split." Wealth and Poverty. University of California, Berkeley, Berkeley. 22 Jan. 2016.
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