Income Inequality and Poverty
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Income Inequality and Poverty
The United States is one of the most economically developed countries across the globe. It has the highest GPD and has both military and economic superiority against all other fist world countries. Despite these developments, there is a rising unemployment rate that has subsequently resulted in widespread poverty in different regions of the country. There is a correlation between income inequality and poverty in the country based on the number of people who have low income in relation to the sizes of the families and the average expenditure per year (Semega et al., 2017). Poverty can, therefore, be defined as people who do not have sufficient possession or income to meet their needs. The growing number of people living in poverty has been attributed to the widespread drug business that limits the potential of mot youths, who subsequently turn to be unemployed adults with low or no income to meet their families (Fontenot et al., 2018). Income inequality has been regarded as economic inequality in numerous discussions by the Democratic Party in the United States. This concern has been raised in a bid to understand the variations of income for different classes of people in the United States, with low-income families’ been the primary victims of the concept. Thesis: Economic inequality is among the numerous factors that contribute to the widespread poverty in the United States.
Income inequality is, however, not the only cause of poverty in the country. Other relatable reason includes the outsourcing strategy used by many organizations to reduce the cost of producing an increase in profits. The primary labour market of the United States is china and India. Income inequality, however, amounts to the highest cause of widespread poverty. Most low-income families live below the poverty line as they struggle to live by the little income they get from their low paying jobs (Proctor et al., 2016). Manual labourers account for the highest number of low-income families. This unskilled labour accounts for approximately 13% of the country’s total population, a rather substantial (Semega et al., 2017). Study shows that for the past 50 years, 20% of the country’s population has brought in being responsible for the highest shares of the total income in the country. This is a clear indication of the high level of income inequality, an aspect that has been linked to the rise in poverty in the United States.
Income inequality can be traced back to the slave era, where the rich landowners exploited slave labour to enrich themselves through mass production and sales of their product. The growth of industries further increased the gap between the rich and the people through the creations of class differences. The upper class was composed of wealthy merchants and political families. The middle class was composed of the workers, while the manual labourers constituted the majority (Fontenot et al., 2018). The African Americans fell under the lower class based on the history of slavery that left them with no education and wealth to sustain their basic needs. These class differences have proceeded into the 21st century despite the constitutional reforms trying to reduce the gap between the rich and poor. Access to education and healthcare are some of the aspects of the reforms that helped reduce the gap between the rich and the poor in the country (Pascoe et al., 2016). With economic inequality, the poor have fewer opportunities to improve to the rich and the middle classes. The low-income families account for the highest number of people living below the poverty lines.
Despite the reforms on equality drawn back from the civil rights acts, African Americans in the country still account for the highest number of people living in poverty due to the long history of segregation that limited their access to education and other opportunities that come with it. As mentioned, economic inequality propagates further poverty in the country due to a lack of resources and access to better education and opportunities that are accorded to other members of the society with higher class positions (Early & Many, 2018). The topic of inequality has been neglected for decades, but finally, the 21st century has witnessed diverse groups of people, including political leaders and the media, shedding light on the topic. The mainstream development policies have reintroduced the concept of economic inequality based on the report released by the World Bank in 2000. According to the report, the slow economic growth in the United States can also be attributed to the American people’s unequal income. Inequality and poverty have a direct link with economic growth.
The World Bank report 2000 details some of the strategies that could remedy the poverty level through income distribution among the population. The changes in income distributions have additional effects on poverty, as detailed by the report. The analysis of the number of families living below the poverty line has laid out one clear correlation between poverty and low-income unequal distributions of wealth in the country (DeNavas-Walt & Proctor, 2014). As mentioned, the total wealth in the country is held by approximately 20% of the population. This wealth is passed down from generation to generation while the low-income families pass down poverty and further low income due to lack of access to better opportunities. The same reports detail the chances of reducing poverty reduction of over 23% of economic equality was enhanced by 6%, an aspect that details the clean correlation between the two concepts.
Poverty inequality and economic growth can be understood from the two-way link that shows the correlation between the three concepts. For economic growth, the distributions of income and wealth need to be even or at least close to. However, poverty has been deep-rooted in low-income families and passed down to the next generation while the rich seem to get all the access to opportunities (Early & Many, 2018). Very minimal changes in the distributions of wealth and income can have drastic effects on the country’s level of poverty. The democratic presidential candidates have, in the past, advocated for income equality as a means of elevating the lives of people living in poverty in the United States (DeNavas-Walt & Proctor, 2014). The policies on poverty reductions n the past have been implemented based on income distribution. Economic development from industrialization increases the country’s economic growth; however, it leaves out the low-income families that account for a substantial lag on economic development. This analysis shows that industrialization and increased international trade can have a significant effect on the GPD; however, these policies have little to do with poverty reduction.
References
DeNavas-Walt, C., & Proctor, B. D. (2014). Income and poverty in the United States: 2013. US Government Printing Office.
Early, J. F., & Many, U. S. (2018). Reassessing the facts about inequality, poverty, and redistribution. Policy analysis, 839.
Fontenot, K., Semega, J., & Kollar, M. (2018). Income and poverty in the United States: 2017. Washington, DC: US Census Bureau, P60-263.
Pascoe, J. M., Wood, D. L., Duffee, J. H., Kuo, A., & Committee on Psychosocial Aspects of Child and Family Health. (2016). Mediators and adverse effects of child poverty in the United States. Pediatrics, 137(4).
Proctor, B. D., Semega, J. L., & Kollar, M. A. (2016). Income and poverty in the United States: 2015. US Census Bureau, Current Population Reports, P60-256.
Semega, J. L., Fontenot, K. R., & Kollar, M. A. (2017). Income and poverty in the United States: 2016. Current Population Reports (P60-259).