Widening Economic Inequality - Economics Essay Example

Date:  2021-06-24 19:09:06
3 pages  (551 words)
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University/College: 
Harvey Mudd College
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Essay
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This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Economic inequality is a problem in most countries. It is mainly characterized by unequal distribution of income. This unequal distribution of income is caused by various factors. Economic inequality in a country is determined by its overall economic status. For instance, poorly developed countries have high levels of economic inequality compared to developing countries. Developing countries, on the other hand, have high levels of economic inequality compared to developed countries. In developed countries, economic inequality is still prevalent. The only thing that helps curb this problem is industrial development. This paper discusses the widening economic inequality in the US.

As noted, economic inequality is mainly characterized by unequal distribution of income. Inequality in income distribution is a problem that has existed since early years. During early years, American society had a social hierarchy. Ones position in the hierarchy was determined by his or her socioeconomic status. This hierarchy enabled a small percentage of Americans to remain rich while others served under them.

To date, this hierarchy exists but in a disguised way. For example, in corporations, a high number of working personnel are those who work in factories and other areas that require intensive labor. These individuals earn minimum wages. The remaining group of working personnel in such corporations is made up of individuals who work in white-collar jobs. This lesser group earns salaries, which the larger group can never earn in years. This payment structure in corporations contributes greatly to inequality in income distribution.

Nepotism is also a contributor to the widening economic inequality. Every year, America releases thousands of skilled students from Universities and Colleges into the job market. However, only a small percentage of this skilled labor force is able to acquire jobs. The small percentage of students from recognized universities such as Harvard and Yale are easily absorbed into the job market. The highest percentage is made up of college graduates. Given their average performance, these graduates are left to seek equal job opportunities personally.

The highest numbers of college graduates who are able to acquire jobs get opportunities through close relatives and friends. This behavior has made prejudice a habit among employers. Hence, if one does not have the right network of people, he or she is forced to settle for dismal jobs. This trend is frustrating because most of those who remain unemployed have equal qualifications. Nonetheless, this iniquity still contributes to the widening economic inequality.

Americas banking system is also characterized by rent-seeking behavior. Most of the institutions that run commercial banks in the country are solely focused on maximizing profits even at the expense of their customers. Hence, bank administrators always seek to create better ways of making money to remain relevant in the market. Without any knowledge, the public always suffers from high-interest rates, which bankers profit from. This situation creates a cycle in which the banking system survives by fleecing the public. In turn, this causes unequal distribution of income.

The government has already put in place measures through legislations to curb economic inequality. However, there has been poor implementation of these laws because of corrupt behavior within the law enforcement. Also, the tendency to enrich oneself has resulted in many people losing equal opportunities to acquisitive individuals. This self-centered behavior causes individuals to ignore the potential that others may have.

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