User talk:Johnnyteva

Income Inequality in the United States
JOHNNY NGUYEN

Income Inequality in the United States The income inequality or disparity in the United States has grown to become utterly pronounced that currently, the top ten percent income earners average is nine times as much as the average of the bottom ninety percent. The citizens in the top one percent average more than forty times more income compared to the bottom ninety percent. More than a quarter of the total number of American workers earn less than $10 an hour, including people working in the service industry – fast food workers, cashiers, and nurse's aides. The rich have continued to get richer in the United States since the financial crisis of 2008 ended (Saez & Zucman, 2016). Between the year 2000 and 2006, the number of American citizens living in poverty increased by approximately 15 percent, with more than 30 million employees in the United States earning less than $10 every hour. A majority of these low-income employees have no health insurance, pension plans, or sick days from their organizations. As a result, the healthcare inequality that arises causes the medical care cost for all citizens to increase. These low-income earners are not in a position to afford preventive medical care, ending up in the emergency room. Their medical care cost is, therefore, passed on to Medicaid. Within the same time period, the average salaries remained unchanged, despite the productivity of organizations increasing. Income inequality is negatively related to the average educational attainment and results in slow economic growth of a country (Reinicke, 2018). The income gap between the workers and the top management keeps widening over the years, with the top management-worker retirement benefit gap growing at a faster rate. Income inequality is a result of the changing labor market and changes in the world economy. Changes in the world, such as technological and economic changes, are to blame for the income inequality in the United States. Technological developments have replaced millions of workers at industry and factory jobs. Workers with skills and training in the latest technology get higher paid jobs. Improvement in technology has resulted in the company's achieving production targets with lesser employees. Managers are forced to work with temporary and contract employees to keep costs down. Illegal immigration poses a problem, as illegal immigrants provide low-wage workforce due to the lack of bargaining power to ask for higher wages. In conclusion, the income inequality problem in the United States is due to the lack of adequate investment in human capital. The solution to the increasing income inequality is increasing investment in human capital to improve the skills and employability of citizens. The greatest contributor to the income inequality problem in the United States is the change in the world economy and wealth distribution (Murphy & Topel, 2016). For this reason, it is important that the United States responds to the redistribution of global wealth. The United States government needs to ensure that the bottom bracket of low-income earners, who are generally unskilled or low-skilled, have access to education and employment training. Income inequality is the result of the failure of human capital investment to match the pace of rising demand for skills. Therefore, investing in human capital is the only way of increasing individual wealth and improving the workforce of a country.� References Murphy, K. M., & Topel, R. H. (2016). Human capital investment, inequality, and economic growth. Journal of Labor Economics, 34(S2), S99-S127. Reinicke, C. (2018, July 19). In the US, the rich are getting richer and the poor are getting poorer, study concludes. Retrieved February 25, 2019, from https://www.cnbc.com/2018/07/19/income-inequality-continues-to-grow-in-the-united-states.html Saez, E., & Zucman, G. (2016). Wealth inequality in the United States since 1913: Evidence from capitalized income tax data. The Quarterly Journal of Economics, 131(2), 519-578.

February 2019
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