Recent years have seen the subject or issue of income inequality develop into one of the greatest challenges faced by individuals worldwide. Today, in countries with advanced economies, there is an ever-widening gap between the rich and poor and there is no assurance that this will be addressed (Dabla-Norris et al 4). The situation in developing countries and emerging markets is worse as compared to that in advanced or stable economies. The revolutions in most parts of the world such as Africa and Asia can be attributed to income inequality. The latter is evident in the in the pervasive inequities when it comes to access to social amenities such as education, health care, and most importantly, finance. It is not a surprise that the level of income inequality and those who drive it have become the issues of concern to global political and economic leaders. Ironically, despite the US championing for the solution of the problem, it remains one of the countries where the extent of income inequality is worrisome. In the 1970s, 1% of America’s top economic class accounted for 10% of the national income in the US. This has worsened today with the 1% top economic class accounting for more than 8% of the national income in the US. Moreover, in 1992, the top 400 richest Americans were worth $300 billion, a figure that has risen to over $1.2 trillion today whereas the wealth of the middle class has stagnated or decreased significantly (Freeland 1). Essentially, income inequality has adverse effects on human social, economic, and political conditions, and thus, should be addressed.
The first aspect of this argument is that income inequality may worsen in the coming years given the political influences on the same. In an article by Krugman (1), the entire world is gradually becoming a society in which the rich get richer whereas the poor stay poor, and this is despite the hard work they exhibit in economic contexts. This means that sons are more likely to inherit their fathers’ socioeconomic status as compared to the previous years. The gap between the rich and poor is widening in the US, which seemingly, is the global economic superpower, an implication that other countries are likely to follow a similar direction. It is seen that America has become a class-ridden society, and the political leaders are worsening the situation by striving to fortify class inequality (Krugman 1). In the process, every individual’s resistance to the fortification of class inequality is denounced.
Undoubtedly, the US was a relatively middle-class nation three decades ago, and the country stayed that way for several years. Afterward, New Deal policies were enacted and implemented, and these saw a drastic narrowing of the income gaps in the US. There were strong unions, corporate profits and high incomes for all individuals, taxes on inherited wealth, as well as public scrutiny of top corporate management (Krugman 1). Through these interventions, the income gap in the US was narrowed. However, a change in the political environment a generation ago resulted in severe income inequality not only in the US but also across the globe. The poor have continued to suffer while the wealthy have benefited from the situation. A solution to income inequality not only in the US but also in the entire world is necessary, and the achievement of this objective depends on interventions such as increasing tax rates on people with high incomes to reduce the burden on low-income earners. Moreover, increasing tax rates on corporate profits and unearned income such as capital gains and dividends would help distribute income to the poor, hence, narrowing the gap between them and the rich (Krugman 1).
The second facet of this argument is that income inequality is a result of various factors that should be carefully examined, if what is gradually becoming a global challenge is to be addressed. Freeland is of the opinion that technology and income inequality are undergoing evolution at a similar rate. It is seen that some of the factors fuelling rather than addressing income inequality are globalization and the development of new technology. Globalization is evident in international trade, which has been of great benefit to only few wealthy individuals in countries such as the US. In the world today, human beings are surrounded by conditions of income inequality, where those at the top get richer than those at the bottom. The menace has taken center-stage in the Communist China, Communist Russia, US, UK, and the rest of the world. In fact, it has spread to social democracies such as Sweden and Germany, and this makes it considered a global phenomenon (Freeland 1). The more it spreads, the more people feel uncomfortable, in fact, in recent years; it has been seen as a significant threat to human survival and coexistence. The number of individuals against income inequality continues to rise daily although wealthy individuals have had the power and resources to manipulate every structure in their favor.
The efforts to address income inequality should be targeted at political factors such as increasing taxes for the wealthy, doing away with policies that allow privatization, enacting strong legal protections for trade unions, and strong opposition to capitalist policies and laws. Moreover, factors such as globalization and technological revolution that power the rise of the super-rich should be reexamined. Instead, individuals from lower economic classes should be given access to economic opportunities whereas the access by the super rich to economic opportunities should be limited (Freeland 1). On a general perspective, making changes to social and political systems will be fundamental to addressing income inequality.
It can be argued that income inequality has an influence on social and economic interactions, and thus, should be dealt with for healthy human coexistence. In several countries, income inequality has been one of the driving factors of revolutions. For instance, income inequality in several developing Arab countries in Africa and Asia is at higher levels, and this has triggered rebellions by individuals of lower socioeconomic classes. Piketty postulates that to address income inequality, the race between education and technology should be reexamined. Besides, he mentions that the unequal access by individuals of lower socioeconomic classes to skills and resources should also be reversed. Moreover, the perspective that top managerial positions are set aside for wealthy individuals should be changed to pave the way for poor persons in similar positions, which in the long run will help close the gap between the two socioeconomic classes (Piketty 1).
The issue of income inequality, like other basic problems such as climate change, immigration, deteriorating infrastructure, and wage stagnation, goes unresolved year after year. Technological and infrastructural changes are seen in the world today, although the individuals benefiting from the same are the wealthy persons. The advent of technology such as the Internet has led to the cropping up of world billionaires such as Mark Zuckerberg, who currently has accumulated more wealth than a significant percentage of the low socioeconomic American population. Wealthy individuals easily access the internet whereas the poor individuals do not have or benefit from similar opportunities. Thus, the need to address income inequality has become evident, and hence the inception of numerous interventions by various governments. In the article by Packer (31), income inequality has multiple adverse effects on both humans and the society. Income inequality has hardened the society into a class system, has led to the imprisonment of people in the circumstances of their birth, has resulted in the division of one individual from another in educational settings, neighborhood, at work and hospitals, has made it difficult for people to imagine or think about the lives of others and this underscores the fact that over 14 million people in America are unemployed while only a few are employed (Packer 31). It should also be noted that income inequality jeopardizes trust among people making human coexistence more difficult. Moreover, income inequality interferes with the conception of ambitious solutions to large societal problems, and most importantly undermines democracy in various nations. In line with these perspectives, it is the duty or responsibility of every individual to ensure that the common global problem of income inequality is addressed.
Global trends today should be blamed for the ever-widening gap between the poor and rich worldwide. In the article by Dabla-Norris et al (18), trends such as the development of technology, have resulted in the reduction of transportation costs, has improved automation, and has also improved communication. However, there are other inconveniences of global trends, and this is because they have been accompanied by skill-biased technological change, which has benefited wealthy individuals more than their poor counterparts. In the same vein, technological changes have driven up skill premium, and this has led to increased labor income inequality. With skill premium, the wealthy individuals are more likely to benefit as compared to the poor individuals, and thus there is a need to address the issue. One of the ways of dealing with the issue of income inequality worldwide is championing for the enactment and implementation of policies that promote financial inclusion (Dabla-Norris et al 18). Moreover, the mitigation of the problem is dependent on the adoption and implementation of policies that focus on the poor and the middle class rather than the wealthy individuals.
Income inequality remains a global challenge today, and no significant commitments or strides have been made by various governments to mitigate the issue. Because of income inequality, human beings’ connection with aspects such as the distribution of wealth, distribution of income, as well as wage structures has been put in jeopardy (Cowell 1). The mentioned aspects are fundamental to peaceful coexistence among human beings, and thus, the need to address income inequality is underscored.
Briefly, it should be noted that income inequality has developed into one of the greatest challenges faced by individuals worldwide. Besides, income inequality has been the major driving factor for social and economic problems that have at times compromised the global economy. The solution of income inequality is a responsibility of every individual and nation, and some of the ways of achieving this are the reexamination of technological and globalization trends that have paved the way for wealthy individuals to manipulate key economic perspectives in their favor at the expense of those from low socioeconomic classes.
Cowell, F. (2007). Income distribution and inequality. Vol.
Dabla-Norris, M. E., Kochhar, M. K., Suphaphiphat, M. N., Ricka, M. F., & Tsounta, E. (2015). Causes and consequences of income inequality: a global perspective. International Monetary Fund.
Freeland, Chrystia. The rise of the new global super-rich. TED. 2013. Retrieved online from http://www.ted.com/talks/chrystia_freeland_the_rise_of_the_new_global_super_rich?language=en#t-112495
Krugman, Paul. The Death of Horatio Alger: Our political leaders are doing everything they can to fortify class inequality. The Nation, 2003. Retrieved online from http://www.thenation.com/article/death-horatio-alger/
Packer, George. “The broken contract.” Foreign Affairs 90.6 (2011): 20-31.
Piketty, Thomas. New thoughts on capital in the twenty-first century. TED. 2014. Retrieved online from http://www.ted.com/talks/thomas_piketty_new_thoughts_on_capital_in_the_twenty_first_century?language=en