The Problem of the Wealth Gap in Contemporary American Society

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The Problem of the Wealth Gap in Contemporary American Society

America, the land of plenty, has always experienced an abundance of wealth, but has the unequal distribution of this wealth become our downfall? Its easy to see that people in the United States are getting richer. However, a fraction of the wealth is becoming an issue towards the less fortunate. According to the film Inequality for All, Robert Reich exhibits the issues concerning the wealth disparity that lies between the upper and lower class in America and notices a significant pattern. Reich, using statistical data and figures, recognizes economic trends that have brought us massive wealth inequality and also seeks for possible solutions to the unbearable pattern for the generations to come. Reich also announces that the gap between the rich and the poor is steadily increasing to where the 400 richest Americans have as much wealth as half of the entire US population. This widening disparity is becoming a major threat to the families in poverty. The wealth gap has gotten so out of control that low income families are struggling to a point that is affecting their ability to receive quality health care as well as invest in higher education.

Wealth inequality is often considered to be an enormous difference in value between the upper and lower classes. One of the significant factors that contributed to the difference is the economic recession that began in 2007 and ended in 2009. During this great recession, millions of employees were being let off by major corporations, which essentially widened the gap between the rich and the poor. Nonetheless, families were devastated from the fall of opportunity and lost a majority of their life savings to care for themselves. In regards to the high impact of such a large wealth gap today, it is also difficult to understand how the wealthy became tremendously richer and why the lower class didnt exceed as much. After the great recession, the economy took a turn with online companies such as Amazon accruing massive amounts of earnings. With a few stops and starts, the stock price of Amazon continued to rise. Jeff Bezos, the CEO of Amazon, led his company right through the burst of the dot-com bubble at the start of the twenty-first century to become a huge player in the game of online sales. The company did extremely well and reported to attain $24 billion in annual revenue, from their 2009 year-end financial results, making Bezos the richest man in the world (Treanor 1). Taking into consideration the amount of wealth Jeff Bezos possesses, it would be reasonable to claim that his accruing income only widens the inequality gap by a large degree.

Indisputably, numerous economists today have proved their visions of the massive wage gap; however, they have failed to find a prominent cause to the problem. It is difficult to assign the blame on one source, because the problem isnt just one issue. For instance, some researchers have concluded that the progressive income tax is likely to be an impractical measure for affecting wealth distribution (Berman 15). Low taxes are initially perceived to be the most common reason why the upper class is getting wealthier, however, researchers are having a hard time proving it. More than that, it is equally significant to consider that imposing higher income taxes wont benefit the poor any greater. Another valid source of data is the current report called Wealth in America: Trends in Wealth Inequality, that showcases prediction models of the gap between the rich and the poor. During the growth period of the economy, the article reveals that Despite increasing stock ownership among middle-class families, the benefits of the stock market boom were mostly enjoyed by the wealthy, whose portfolios consist of a large share of high-risk assets, which essentially means that the rich profited greatly because they invested more of their wealth (Western). This kind of situation is difficult to control as well as prevent, therefore, it is affecting a multitude of wealth inequality in America.

As a result of the widening disparity, many lower and middle class families are having difficulty financially supporting themselves as well as improving their standard of living. Ideally, one of necessary methods to overcome poverty for these families is through higher education, however they are unable to afford it due to the rising costs caused by the disparity. Lael Brainard, a member of the Federal Reserves Board of Governors, discusses the impact in a speech by saying, Many households find it challenging to make key middle-class investments because incomes at the middle are not keeping up with the rising costs of education and homeownership, and it is difficult to save enough (Rugaber). She simply reflects on the wealth gap and claims that it is highly affecting the middle class families who are trying to send their children off to college so they can earn a degree. This contributing aspect of the widening disparity is only making matters worse for the ones who are unable to afford it. The cost of attending universities has gradually increased and the national student debt has risen to over $1.41 trillion in 2019, which is an increase of 8% since 2018 (Kurt). Even though a fraction of low income families can afford higher education for their children, they wouldnt significantly benefit as much from it as the rich. The Effect of Wealth Inequality on Higher Education Outcomes: A Critical Review, examines the underestimated aspect and proclaims that, poor children enter the educational system without the power to make the system work in ways that advantage them (Rauscher and Elliot). This means that higher education for students who come from low income families, would be less beneficial to them than the education acquired by the rich because of the inequality in wealth. In addition, low income families are suffering from this because they are unable to acquire any needed health care. According to Nicholas Birdsong, a Policy Specialist with the National Conference of State Legislatures, A defining feature of economic inequality, is a less effective lower-income work force, higher disease and mortality rates, higher health care costs, and progressively deepening poverty for afflicted groups. Birdsongs claim, justifies the increased health care costs in which the poor cant afford. Furthermore, lower income families who are unable to afford the quality health care are at risk of, a less effective workforce, higher mortality rates, higher life insurance premiums, and a less prosperous economy (Birdsong). These underlying effects of the wealth gap have become a major threat to the way of life for lower class civilians.

Wealth disparity is vast and growing by the day though, there are undoubtedly many valuable issues that arise from it involving the health care and education of lower income families. In Inequality for All, a documentary presented and narrated by Robert Reich, Reich discusses what’s happening in terms of the distribution of income and wealth within the US, as well as the controversy and issues that develop from it. Reich also announces that forty two percent of Americans who are born into poverty remain poor, and its significantly accurate. This disparity, which widened after the great recession between 2007 and 2009, has become a major threat to lower class Americans as a result of the rise in costs. Nowadays, a solution for low income families to escape poverty and shrink the gap is through a diploma; however, with the underlying issue of affordability caused by wealth disparity, it doesnt seem possible. Not only is it affecting their opportunity to get a decent paying job, it has also impacted their ability to acquire decent health care. Low income families are substantially unable to support themselves because they find quality health care to be unaffordable. All and all, there doesnt seem to be a way around the wealth gap thus, lower income families will continue to suffer with health care and education costs because of it.

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