Copywrite 2014: Leonore

Soppet

Wealth Inequality

Abstract

This research paper asks: What is wealthy inequality and

what factor contribute to this sociological problem? After

evaluating expert’s research and looking at both qualitative and

quantitative information the finding support that diminished

labor forces, lack of education and lack of sustainability

contributes to wealth inequity. The sociological solution to this

issue may be is making changes to public policies. Free

education, a fair tax base and an improved labor rights can lead

the charge to reduce wealth inequality and make improvements in

our society

Introduction

There has been much concern over the national debt,

raising taxes particularly those of the wealthiest to balance

this debt and how the income distribution is ill affecting the

middle class. This research paper asks: What is wealthy

inequality and what factor contribute to this sociological

problem? The social stratification, ranks of people based on

their wealth, power and prestige (Carl, 2011) in our nation are

greatly in play here with the future outlook of our generation.

Many people are striving to obtain the American dream of having a

quality education, getting a good job when we out of college,

owning a car, a house, and supporting our families. However,

this social issue of wealth inequity now plagues those dreams, it

creates a huge social inequity on many levels and it interests me

to look at how this impacts the poorer middle class.

This social issue has already had some made media coverage

when it had consistent news coverage as a social revolt called

“The Occupy Movement” myself as well as others can relate too

many of the issues that were highlighted by those called the 99

percent. Like other students, many work a full time job at

minimum wage and scrape by to pay for greatly increased school

tuition and books. Our income levels do not afford car insurance

or healthcare. Healthcare options for students are difficult to

obtain, we make too much on minimum wage yet don’t make enough to

pay for it. In today’s labor market many college educated people

are not finding high paying careers and are in work without

benefits in jobs that exploited their talents because jobs are

hard to find. The employer attitudes of major corporations are

“take it or leave it” as they seek to increase revenues. This is

of concern. Many ask: Will our generation even be able to

support itself? The American dream seems to be unattainable.

Many others in our current generation share that shattered

dream. Instead a nightmare is present in that our generation

can’t afford basic living essentials such as healthcare, rent,

and food. Poverty levels have risen almost overnight. Labor

market prospects for college-educated Millennials have barely

improved since the fall of 2011 when Occupy first burst into

public view. The level of student debt continues to soar leaving

crippling debt to those newly entering the labor market.

(Milkman, 2013). This is a huge social issue of income

inequality. Instead of finding the kinds of professional

opportunities students aspired after graduating, many end up

working as unpaid or poorly paid interns or at best in

economically precarious jobs for which they are often

overqualified. The disparities are becoming increasingly larger

between the social classes, there are increased poverty levels,

and more unemployment and employment of those overqualified, and

more crime since people are not able to make ends meet.

Scholars in sociology may look at wealth inequity thru two

different lenses; this is depending on the theoretical views. A

sociologist with a fundamentalist viewpoint believes that our

social system has many different positions. The work force in

our society has to have many types of people from busboys to

scientists and these all need to be filled for a civilization to

have balance and work properly. However, symbolic

interactionists will dispute that ideal, the theory held by them

is that the wealthier have an inherent bias. Their wealth leads

to being less sensitive to social inequalities. The poor or lower

class become stigmatized and higher standards that is often for

affluent families seem harder to attain so eventually the bar is

just lowered (Carl, 2011). Scholars may look at this issue as

that of income inequality and it may also be underpinned by some

economics whatever the case, this social issue is strong because

they support both prejudices. First of all, a social system that

works for only the wealthiest is not equitable to those who are

the middle, working and lower class. The national moral is both

debilitating and failing the majority of the people. Secondly,

the people who represent the top, the 1 percent, have been the

gluttons that have filled their plates over the past few decades,

and now it seems everyone else has to pick up the bill.

Literature Review

Wealth and Income Inequity

The majority class, called the middle class, is outraged at

the huge disparities in wealth and incomes levels. Calling

attention to this economic situation has been the Occupy

Movement, also called “the 99 percent” due to a creative slogan.

The Occupy movement highlights huge salaries of Wall Street and

the big money giants that truly represent a small percentage, but

of those of the highest earnings and most influential power.(Car,

2011) The majority class, struggles as obtaining basic

necessities is becoming much harder on middle class America.

They middle class are outraged at the huge disparities in wealth

and incomes levels. The 99 percent or Occupy Movement looks at

income inequality in that biggest component of the increase in

after-tax income for the top one percent is "business income" as

opposed to income from labor or investments (Economist online,

2011) This is a system that works well for the very richest has

delivered returns on labor that are disappointing for everyone

else. Also, according to the Economist report, top rankers have

made out like robbers over the past few decades, and now everyone

else must pick up the bill. The taxpayers are being forced to

subsidize the excesses of the wealthy. Of course it is a little

more complicated than that. But this suggests the feelings in

America of the 99% towards the 1%. (Economist Online, 2011) Info

graphics on the distribution of wealth in America, which

highlighting both the inequality and the difference between our

perception of inequality and the actual numbers shows that the

gap and reality we assume is hugely unrealistic. “A huge share of

the nation's economic growth over the past 30 years has gone to

the top one-hundredth of one percent, who now makes an average of

$27 million per household. The average income for the bottom 90

percent of us is $31,244. Productivity has surged, but income

and wages have stagnated for most Americans. If the median

household income had kept pace with the economy since 1970, it

would now be nearly $92,000, not $50,000.” (Gilson and Perot,

2011) These bring us to income inequality and the lack of jobs in

the labor force.

Diminished Labor Force

Income Inequity is being exacerbated by the lack of jobs in

the in the labor force. According to Robert Reich, even if new

jobs were created at the high rate for the next decade, attaining

6 percent unemployment would not result until 2024. If job growth

stays stagnant we won’t crawl out of the job slump for another

generation. Why? Americans have priced themselves out of the

global high-tech labor force. (Reich, 2011) The labor force is

changing in America and our nation has people that outnumber

viable jobs. According to the Carl, nonviable jobs are within

our labor markets but these jobs would not be able to sustain the

cost of living day to day. The poorest of the poor have these

jobs in which the focus of main stream America is the middle

class. There are several factors that point to why our nation

has a decreased relative demand for unskilled labor within middle

class America.

Computer Era

Labor has diminished because of the spread of new

technologies that displace low-skilled workers and rewarded the

more highly trained. (Wilson, 1996) As America becomes more

industrialized, machines and computers have automated many jobs.

The need for people in positions where a machine can produce high

speed repetitious work is replaced. The computer era has come of

age eliminating some jobs.

Higher Education Requirements

Another factor is the rapid growth in college enrollment

increased the supply and reduced the relative cost of skilled

labor (Wilson, 2011) Kiester agrees with this concept in that

her insight into the process of social stratification suggests

that childhood experiences shape adult well-being, particularly

adult wealth ownership. Hence the generations that continue

upward trends of upper mobility, higher education, can attain it.

The findings contribute to understanding of social income

inequality by identifying processes that facilitate mobility.

(Keister, 2007) Carl states that while the upper class is able

to afford the luxury of higher education, thus keeping their next

generations at the same social class, those without college

educations remain at the poorer levels in our society. Upward

mobility among the social classes is far less attainable.

However, Wilson believes that social isolationism, "the lack

of contact or of sustained interaction with individuals and

institutions that represent mainstream society", is a result of

lack of employment. When unemployment becomes a norm within a

community then social isolation excludes them from networking the

system, thus a vicious cycle is perpetuated. Income inequality is

not problem of the underclass but one of isolation of necessary

resources. Necessary resources are higher education and training

programs. (Wilson, 2009) A culture of poverty implies that basic

values and attitudes of the lower subculture have been

internalized that the nature of this enhances the effects of

living to social structural constraints and opportunities.

(Wilson, 2009) Society begins to accept the social

stratification created by income inequities and decreased labor

markets. Higher education leading to class advancement is

limited.

World Trade Markets

Lastly, the growing internationalization of economic

activity, including trade liberalization policies which reduced

the price of imports and raised the output of export industries

(Wilson, 2009, Schwartzman 1997; Krueger 1997) Our society is not

sustainable economically. With income inequity at this pace,

society won't be able to buy what the economy could otherwise

produce. This continues a cycle to higher unemployment and lower

wages. Hence, Reich makes a point that this is “not sustainable

politically because Americans won't stand for it and demand

change.” Here we have the Occupy Movement that has surfaced as a

result of the Income Inequity. Our global community has now been

affected by the wealth and income inequalities that our nation

reeks of. As these issues drive deeper into our society it

festers, we lose the power structures even among other countries.

This reflection begins to show signs of wear on our society. Our

society in turn begins to decay with social issues created by

income inequality.

Social Problem Associated with Income Inequality

According to Wilkinson and Picket, population health tends

to be better in societies where income is more equally

distributed. The Income Inequality creates a gamut of problems

in society. Data suggests that social problems including mental

illness, crime, imprisonment, lack of trust, teenage births,

obesity, drug abuse, and poor educational performance of school

children, are also more common in more unequal societies.

(Wilkinson and Picket, 2009) Social problems between more and

less equal societies seem to be large and to extend to the vast

majority of the population. Our local media, Channel 2 News,

currently reports an increase in welfare recipients, more people

needing healthcare services and higher unemployment numbers.

Income inequality has become problematic in our society.

The trend has been a higher correlation of crime in areas with

lower socio economics. Carl agrees that poverty is an indicator

which correlates to higher crime rates. People depleting the

social welfare assistance programs to get healthcare and housing

as the income inequalities continue to worsen. These

relationships are likely to reflect sensitivity of health

concerns and of the many social problems to the ranks of social

stratification and to status competition. This is underpinned by

societal differences in income and material inequality. (Wilkinson

and Picket, 2009) Income Inequality is a social problem that

needs change. Our social structures need to level the playing

field so it is not grossly disproportioned. It would be highly

beneficial to create some social reforms to alleviate the problems

and work toward a balanced solution.

Social Solution

Changes in Public Policy

Something must be done to reduce the income inequality

present in our society. Some of the solutions which can be

considered are changes to our public policies such as free public

education, equitable taxes proportionate to wealth and

strengthening employment opportunities for the middle class and

welfare recipients. Those who reach the time limit for the

receipt of welfare, if the economy slows down, will flood a pool

that will be already filled with low-skilled jobless workers.

According to Holzer, 5 to 10 percent of the jobs in central-city

areas for workers who are non-college graduates require very few

work credentials or cognitive skills. This means that most inner-

city workers today only need to have the basic skills of reading,

writing, and performing arithmetic calculations, but need to know

how to operate a computer as well. Most employers require a high

school degree, particular kinds of previous work experience, and

job references. Because of the large oversupply of low-skilled

workers relative to the number of low-skilled jobs, many low-

educated and poorly trained individuals have difficulty finding

jobs even when the local labor market is strong. (Holzer, 1996)

To preserve our future, we must significantly raise the level of

education among the lower wealth classes, equalizing educational

opportunities which will in turn increase our diminished labor

forces.

Free Education

As a main proposed solution, every American should have an

equal right to the same high-quality education no matter where he

or she lives and how rich their families are. The degree of

wealth should be inversely proportional to the ability to get

into the better universities. This solution would propose a set

of laws, to be enacted by Congress and enforced by all schools

and universities. It should stipulate that the poor have the

greater chance at better education than the already rich. This

free education should include training for vocational careers and

higher technology which can make us more sustainable as a nation

and in global markets. It addresses a problem critical to the

future of the United States as a country and as a free society.

In addition, the purpose here is not only to increase the

proportion of the poor in the better universities, but also to

balance the ratio of the poor to the rich in controlling power.

It was said that “those who hold the gold, make the rules”

(unknown) but with more education, balanced leadership will take

place and the middleclass will be a voice in that power.

Educated and diverse voices will balance positions in the three

branches of the government and to heal the fissure that is

dividing the country. (Amer, 2013) Fully-funded higher education

would allow students to graduate without carrying crippling debt,

ensuring that society would realize full and immediate economic

and social returns of a highly educated society. A better

educated society will realize more efficiency when human capital

is realized because then our economies thrive and grow. (Amer,

2013) Society will be a healthier and safer since educated people

make better choices. As the quality of life increases our social

welfare systems are less burdened. . Lastly, the overall

increased prosperity is a boom to the human race because everyone

can collectively help one another.

Taxes Proportionate to Wealth

Taxes are levied directly on personal or corporate business

to finance government expenditures. They finance public goods and

services such as safety and sanitation. Another large part of

government expenditures are to protect wealth. This includes

part of what we pay for law enforcement, diplomacy and the

military. Those with the most to protect should pay their fair

share for the protection. This is a simple fairness argument for

taxing wealth. Jamie Johnson, the heir to the Johnson and

Johnson pharmaceutical empire, pointed his documentary lens in

the direction of the privileged. He stated that he does not see

why increased tax based on wealth can’t be paid by those who can

pay more. Often the financial revenues are stable and renewable

each year for the wealthiest. The mind boggling financial income

is so high, that it could be a solution to improving government

programs and reducing national debt.

Further income tax that takes a larger percentage from

higher incomes and a smaller percentage from lower incomes,

meaning that the poor keep a larger percentage of their income

than the rich do, can be justified if the government uses the tax

money to fund different programs, including some that target

poverty and inequality.(Sparksnote, 2013) If most people had

significant accumulated assets, the economy would be more stable

and people would be in a better position to find the jobs that

suit them and bargain for higher wages. Essentially, taxing

capital gains as ordinary income would make the playing field

fairer, and over time reduce income inequality. 

Improve Earnings and Strengthen Labor

Society needs to improve the earnings and working conditions

of low-wage workers. Minimum wages should be indexed to

inflation. Wages should be set at a level so that no full-time,

full-year worker lives in poverty. Despite minimum wage increases

across the country, this is not happening and people are living

at poverty level unable to meet housing and food needs. Housing

Supplements and in kind services (food stamps and welfare) alone

do not make a significant difference if income earnings do not

allow the lower class to ever rise above and be financially

independent. Wage level must be sufficient to elevate above

poverty levels and proper checks should be in place with labor

standards.

Enforcing labor standards and implementing a broad agenda

of education and advocacy on workplace rights, including the

rights of workers to collectively bargain will also assist in

reducing income inequality. Rising inequality is rooted in the

loss of good, middle-class jobs. Stronger unions will raise the

wages of the lower-paid, and also narrow the large and growing

income gap between ordinary workers and the top 1 per cent made

up of the corporate and financial elites, not just in the

workplace, but in the wider society by advancing a progressive

political agenda of fair taxes, income security, and quality

public services for all citizens. (Hickey, 2013) However, the

political arena for unions, which are complicated, often can

advocate agendas of their own and some caution would have to be

made with progressive political agendas.

Sociological Conclusion

Collectively, all the information which has been absorbed

through this literature review has led to my increased

understanding of wealth inequity. As a social problem, it has

many different facets in which it affects society. The issues of

poverty, politics, social welfare programs, unemployment, crime

and health were all embedded within wealth inequity. This

research explored a portion of the causes which contribute to

wealth inequity, such as diminished labor forces, poor education

and training and our society’s lack of maintaining

sustainability. The population has numerous problems that are

underpinned with the differences in income and materials

inequality. If our society can find a way to level the playing

fields, the social reforms can alleviate the problems and work

toward a more balanced society.

The research question was able to be addressed. But it is

complicated and has huge political and economic arenas. Free

education is a solution that would elevate society and perhaps

find some brilliant minds among classes of people that would be

otherwise not seen. Although embracing free education is

desirable, I don’t see that society is ready to allow this since

many groups are still very classist. Obtaining a fair tax base

would seem reasonable. However, with the top percent still

making decisions in their own best interest it may be difficult

to maneuver this reform, as witnessed in congress with different

political parties. Middle class America needs to strengthen

labor and begin to level earnings. As our labor force is trained,

the work conditions can improve, and then wages can be increase

to sustain people. This all trickles down to help everyone

flourish. Our society will improve as a whole.

I believe that our society has a future direction. It will

take our generation and those ahead of us to make this happen.

As we realize that the American dream is not attainable there

will be a search to make wealth more equitable, as the 99 percent

movement is already drawing attention to this social issue. Our

generation will begin to make the changes which improve our era.

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