Economic Inequality and Democracy in the United States - Paper Example

Published: 2021-08-11
1030 words
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Harvey Mudd College
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The United States has a vibrant democracy with elections being conducted for different posts such as president, governors, and mayor. American citizens participate in this democracy through voting or by having the ability to contact their elected representatives when they need support or to change a law (US Department of State). However, despite the advancement of democracy in the country, there has been a rise in economic inequality. The increase in inequality has made some people feel like their elected representatives are neglecting them.

Approximately 30% of Americans workers earn $12 or less per hour. In 2013, the top 10% took home 45% of all the incomes paid in the United States. Additionally, Americans top 1% took home 20 percent of all the income the same year. Although the top 1% were affected by the 2008 recession, their wealth has continued to grow as the economy improved while the remaining 90% has not seen much change. The number of people living in poverty has increased over the years, and by 2014, nearly 35 million people earned less than 10 dollars per hour (US Census Bureau). Most of these workers are not provided with sick days, pension plans or insurance. Additionally, the number of workers represented by trade unions have decreased due to the decline in the US labor unions. However, as the low wage earners get a little increment, the paycheck of the top one percent has increased by 250% from 1970 to 2014 (World Economic Forum). The effect is a widening economic gap between the rich and the poor.

From 1978 to 2015, the productivity in the US has increased by 130 percent (World Economic Forum). However, the wages of American workers have not kept up with the pace of this increased productivity. From 1978 to 2015, the wages have increased to 20%. The effect is a few sections of the economy witnessed a high economic growth while other groups are left behind (Greg). Although women have the right and freedom to work outside the home, the glass ceiling is not yet broken. Women make up only 27 percent of the top 10 percent earners and 17 % of the top 1 percent. In 2016, the Wall Street banks gave $25 billion to their 180,000 employees. The figure is equal to what 1,080,000 employees who earn $10 per hour were paid the same year. This kind of disparity has played a significant role in the increase in income inequality.

The other factor that has led to income equality is globalization. As the US trade with the rest of the world increases, the imports to the United States goes up. The result is an increase in imports of foreign goods and a decrease in export of American goods due to various factors. Due to the low wages in other countries, companies tend to relocate their business to these nations that have low wages. The Americans then experience loss of jobs or even a decrease in their wages. The US government has also played a role in increasing the gap between the rich and the poor. Policies such as deregulations of Wall Street, tax changes, and federal monetary policies have affected wages and employment (Baranoff)

Economic inequality and political inequality are interrelated. The relationship is evident where politician are overly responsive to the needs of a group of affluent citizens (American Economic Association). The phenomenal is made possible due to the political system that allows people to contribute large sums of money towards the campaign of a candidate. In an economy where there is an equal distribution of resources, the political inequality will be minimal as there is no one group with a lot of influence over the others.

Social movements such as the women rights movements played a significant role in empowering women. The women rights movement fought for womens right to vote and to recognize them as equal to men. The right to vote ensured that womens voice could be heard and they could participate in carrying out other reforms through the ballot. The labor movement was also instrumental in fighting for workers rights. The organization ensured there were better working conditions and that employers treated their employees fairly. Other organizations include the civil rights movement which was critical in fighting for racial equality. The group wanted the end of segregation, and for African American to be given equal opportunities as the rest of the citizens.

Some changes can be introduced in the country to reduce the inequality. The first thing is to make the US products competitive to compete with goods from other nations. Competitiveness can be achieved through subsidies, reducing the cost of production and depreciating the US dollar. Since most countries have trade agreements with the US, consumers will go for the cheap goods. It is, therefore, the duty of the government to ensure manufacturers are in positions to compete in the global market.

Additionally, there should be increased unionization to ensure the rights of the workers are upheld. The government should also ensure there is a better supervision of the Wall Street to make sure they adhere to the set rules. The 2008 economic meltdown was blamed partly on the Wall Streets and the lax laws that were in place. Finally, the government should strive to ensure the wages of low workers is increased (Kuznets). The increase in the wages of low-income earners tends to have more ripple effect than increasing bonus for the rich as the poor tend to spend nearly all the money that they make.

Works Cited

American Economic Association. "American Economic Association." American Economic Association, 2016, Accessed 14 Nov. 2017.

Baranoff, Olga. "A Post-May Day Analysis of U.S. Income Inequality." Equitable Growth, Washington Center for Equitable Growth, 4 May 2015, Accessed 14 Nov. 2017.

Greg. "The Link Between Productivity and Pay Is Very Much Alive, Summers Paper Finds." The Wall Street Journal, 9 Nov. 2017, p. 1, Accessed 14 Nov. 2017.

Kuznets, Simon. "Economic Growth and Income Inequality." The Forces of Economic Growth, 2005, p. 5.

US Census Bureau. "Income Inequality.",

US Department of State. "Democracy." U.S. Department of State | Home Page, 1 Feb. 2016, Accessed 14 Nov. 2017.

World Economic Forum. "What?s Caused the Rise in Income Inequality in the US?" World Economic Forum, 2016, Accessed 14 Nov. 2017.

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