Impacts of the Wealth Gap and Inequality in America

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Ever the since the early 1900s, the American dream was always seen to be achievable by everyone thanks to capitalism. However, the dark reality is that many families don’t have the financial flexibility to support the ideal american life. With today’s socio-economic positions, the rich get richer and the poor only get poorer.

Wealth inequality is the uneven distribution of net wealth, which is evident in not only America, but also in Chile, Mexico, Turkey, and Israel, who just so happen to have the highest poverty rates according to Huffingtonpost. com. According to a graph from Urban. org, from 1963 to 2016, families in the bottom 10th percentile (those being poorer than 10 percent of the nation) were seen to be going from almost no wealth, to going negative. In other words, they were in debt, $1, 000 in debt to be exact.

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Those in the middle were seen to have their wealth double while those at the 99th percentile saw their wealth increase by seven fold. Despite there being inconsistencies in the statistics in 1992, 1995, and most recently 2010, the gaps grew back even higher than they were before they dipped down. From the information provided, wealth inequality is only growing. What causes this gap to widen? There are several answers that can explain wealth inequality. According to Alternet. org, unskilled immigrants in the workforce can explain why many hispanics across the nation are below the 50th percentile of wealth.

There is a striking wealth gap between race as well with the average white citizen having a net wealth of $142, 000, hispanics having a net wealth of $13, 700, and blacks having a net wealth at $11, 000. The trend of race and low wealth can mean that these families may not have enough money to plan for retirement, send their children to college to get an education, or even to prepare for a personal emergency.

According to Urban. org, these kinds of families are also more likely to fall into major student debt even if they do send them to college. Other explanations are politics, technological advancements that replace jobs, and a globalizing economy.

This also brings in the fact that many large corporations put profit ahead of workers in order to stay competitive with China. China’s cheap labor makes it easier for them to spend more money on raw materials rather pay more for workers, setting the bar not only for America, but globally as more and more goods are demanded. The way that the inequality gap is structured has always bothered me on a personal level as I have seen its effects up close. I believe that there should be a way that makes it easier for the poor to become more financially stable and maybe even climb up to the upper percentiles of wealth.

So how can this major issue be solved? The potential solution comes from careful financial decision and planning such as establishing automatic savings for retirement and reducing dependence on students loans. However, the ultimate outcome is up to the federal government, which without a genuine way to fix the system, the rich will only get richer and the poor will continue to get poorer.

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Impacts of the Wealth Gap and Inequality in America. (2021, January 12). WritingBros. Retrieved June 16, 2024, from https://writingbros.com/essay-examples/impacts-of-the-wealth-gap-and-inequality-in-america/
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