Jan
30
Blog Post #1:Income Inequality
January 30, 2015 | Leave a Comment
The struggle of inequality has always resided in our society. It is very interrelated with social class, economics, politics, power, race, and other factors. With the increasing gap between the rich and the poor, income inequality has immobilized a part of the American Dream: moving up the social ladder and obtaining wealth. OECD gives a good framework around the concepts of income inequality and poverty. The graphs help visualize the OECD countries in retrospect. Nations like the United States have high standards of living but are still one of the nations with the highest income inequality and poverty levels. There’s no way to completely have equality but economist and scholars have come up with solutions to combat the increasing income inequality gap.
John Ydstie and Marisa Silver’s article made me think and question what the right amount of inequality is. The wealth gap between the rich and the poor is increasing year after year, but I do agree that there still needs to be some form of inequality necessary for capitalism. Tyler Cowen makes some good points, we only see the rich with an increase in income while the middle class and the poor are stagnant in where they stand.
We can see that inequality as an incentive isn’t working too well for the lower household income families. The rich get richer and the poor get poorer. I never heard of the Great Gatsby Curve, which states that there is a correlation between social mobility and income inequality, but it does give us a good demonstration of the situation that we’re in.
Both these articles argue to help the lower and middle classes by increasing minimum wage and taxing the rich. However, I don’t think this will be effective enough since minimum wage is increasing so slowly and the standard of living is rising so fast. Year after year, consumer products are increasing in price in addition to the new announcement that the MTA fare is on the rise again. What I do agree on is Cowen’s point of making education, health care, and housing more affordable for the lower class. The poor stay poor because they lack the resources and opportunities. If we make these basic needs more affordable, the bottom can have a chance to rise up.
The Ted Talk by Richard Wilkinson was very convincing with great evidence and visual aid. I learned so much from his talk such as how the worst index of health and social problems come from high income inequality countries and that there is no correlation between inequality and the GDP. I realize that the human cost of illness, obesity, social dysfunction is expensive and it’s even harder to combat this if you are in the lower class. It was also really shocking that NY had the highest high school dropouts out of any other state, but it makes sense that NYC would have a large inequality gap.
As what Richard Wilkinson said it doesn’t matter how we get there, it only matters that we got there. The increasing inequality gap is an evident and continual problem for our society. There are already many possible solutions to lessen this gap which will ultimately improve quality of life. However, what are the consequences with implementing these solution? We know that leaving the problem untouched will lead to a bigger catastrophe. So the ultimate question is how will nations like the US close this huge gap?
-JanYing He
