Income inequality essay

Here’s what I say to you: You’re living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us.

In 2014, economists with the Standard & Poor's rating agency concluded that the widening disparity between the .'s wealthiest citizens and the rest of the nation had slowed its recovery from the 2008–09 recession and made it more prone to boom-and-bust cycles. To partially remedy the wealth gap and the resulting slow growth, S&P recommended increasing access to education. It estimated that if the average United States worker had completed just one more year of school, it would add an additional $105 billion in growth to the country's economy over five years. [72]

According to the CBO, [59] the major reason for observed rise in unequal distribution of after-tax income was an increase in market income, that is household income before taxes and transfers. Market income for a household is a combination of labor income (such as cash wages, employer-paid benefits, and employer-paid payroll taxes), business income (such as income from businesses and farms operated solely by their owners), capital gains (profits realized from the sale of assets and stock options), capital income (such as interest from deposits, dividends, and rental income), and other income. Of them, capital gains accounted for 80% of the increase in market income for the households in top 20%, in the 2000–2007 period. Even over the 1991–2000 period, according to the CBO, capital gains accounted for 45% of the market income for the top 20% households.

Income inequality essay

income inequality essay


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