Since the late 1970s, a phenomenon known as income inequality has been growing in the United States. Income inequality is the unequal distribution of household or individual income across the various participants in an economy. The problem has stemmed from many different factors such as globalization, demand for more skilled workers, and lack of government intervention. With companies and workers willing to work for longer and cheaper, many large industries in the United States chose to outsource their manufacturing to increase productivity. With college becoming more of a necessity than ever, the demand for more skilled workers has increased. Since the great recession in the late 2000s, the Government has continued to allow this income disparity to widen. With such a complex economic issue, there is no “magic bullet” to solve the issue; but several solutions over time. Raising the minimum wage, improving public education, preventing outsourcing, and revising tax policies will collectively push to end the division in the United States. 

The current federal minimum wage in the United States is currently $7.25 an hour. Working American’s have seen the cost of living go up, while the cost of living continues to rise. Many single or double working families who have children often fall below the poverty line at a minimum wage job. Even with working 40 hours a week, these families struggle to pay rent, bills, and put food on the table. According to the United States Census, 14.5% (or 45 million people) reported living under the poverty line as of last year. Almost all of the employed workers under the poverty line are working at a minimum wage salary. With this large percentage of citizens living in poverty, they continue to see the rich getting richer. Journalist and writer for CNN John Sutter visited a small town called Lake Providence and found how difficult the lives of minimum wage workers are. “I'm not sure what the magic number should be, but I know I met several people in Lake Providence who live at or slightly above the federal minimum of $7.25 per hour and who can't pay their bills. It's not even close. One woman, Delores Gilmore, 44, works overnight as a prison guard making $8.50 per hour. She has to choose which bills to pay. At previous jobs, she was not always able to afford underwear for her children because money was so tight” (Sutter). This dark reality for a large sum of Americans are beginning to feel more unrest towards our government. Raising the minimum wage would allow these workers to have more air to breath, and allow them to live more comfortably. Sutter also goes on to explain how America’s backbone shouldn’t be living poor. “The truth is, about 26 percent of the workforce earns less than $10.55 hourly (about $22,000 yearly, which is below the poverty line of $23,000 in the United States), and 75 percent of them are 20 years old or older”(Sutter). This large portion of America are the majority who are complaining about their incomes can’t feed their kids, while CEO’s incomes continue to rise. Raising the minimum wage to a fairer price would benefit the country in several ways. Improved living standards are crucial to a better country, and with these minimum wage workers have extra money to spend on basic needs and living expenses. Increasing the minimum wage would also help productivity by raising morale and motivation of these workers. With the implementation of higher wages, the income gap would begin to slim down. The lowest percentile of income workers would begin to rise up to a better bracket. 

The low quality public education in our country has continued to affect our income disparity. With poor education at a young age, a child is less likely to attend college and therefore less likely to make a stable living. With increasing the public school education quality throughout our country, the next generation will have a better chance at escaping poverty and being more successful. In a documentary titled “Inequality for all” narrated by Robert Reich, describes how income inequality has only gotten worse over the past few decades. During the documentary he says how other countries have been beating us in education. “If you’re born into a poor family, your chance of escaping poverty is a mere 30%” (Reich). The main reason why these kids are staying poor is because of the poor education that is given to them. With little resources to build, many public high schools, especially in the inner cities, are beginning to close down. To help improve these schools, much of that relies on more funding for struggling schools, and creating a safe learning environment for these kids. With college education becoming more important in a modern society, it is even more important to put K-12 education is the building block to a successful college career. The decline in the public education in the United States has been dramatic. 30 years ago, America was the leader in quantity and quality of high school diplomas. Today, our nation is ranked 36th in the world. On a national scale, our Country has funded higher education less than ever. When the funding begins to decrease, the tuition for these schools shoot up. To increase our economic stability and success, it is imperative to have America become a powerhouse in education once again. 

Outsourcing has been a serious issue in employment opportunities for modern day America. With the ease of sending work for cheaper prices and more productivity, many major corporations have chosen foreign nations to help increase profits. “U.S. companies must compete with lower-priced Chinese and Indian companies who pay their workers much less. As a result, many companies have outsourced their high-tech and manufacturing jobs overseas. The U.S. has lost 20 percent of its factory jobs since 2000” (Amadeo). This percent is continuing to grow, and it is damaging the working class and taking jobs from Americans. Modern day companies have an increasing pressure to increase their profits every year. When shareholders anticipate higher profits, companies seek various options to maximize their own efficiency; one of the easiest ways to do so is paying foreign workers less money. When companies outsource to different nations, that causes a loss in intellectual capital as well. The initial idea behind outsourcing was to transfer low-skilled jobs out to those countries, and keep the highly-skilled jobs in the US as an important asset to the economy. Since foreign countries are trying to grow their own economies, United States companies are now hiring international engineers, accountants, and IT specialists at a lower rate than it would cost them hiring domestically. This issue ties along with a concept explained by writer Angie Mohr called the “Brain drain”. “Once a skill has been largely moved offshore, it is difficult to regain again. For example, if most publishers outsource book design and layout work to Chinese firms, over time there will be fewer designers in the United States who have that skill. It also means that there are fewer students of the craft due to lack of opportunities” (Mohr). Every job that goes overseas from a United States company is a job that could’ve stayed in the US. When these working class jobs are lost, unemployment goes up, and these workers now have to settle for a lower paying or minimum wage job. To ensure that the income inequality gap lessens throughout the next generation, a big part of that relies on keeping large US corporation jobs inside of the US; giving more jobs to citizens. 

Taxing the richer bracket of US citizens will redistribute the money back into the economy making it stronger. The gap between the rich and poor has never been higher, and it’s not because these CEOs are working harder or more efficiently. The tax efficiency in the US has tilted towards the wealthy, and has given them many breaks. Mitt Romney, one of the wealthier and influential men in the United States, gets taxed at a lower rate than his secretary. He gets taxed at under 14%, while working class Americans under him in a middle class tax bracket get taxed at over 30%. When the poor and middle class are paying more in taxing, relatively speaking, that is an issue. The economy begins to suffer, because consumers inevitably spend less money back into the economies addition, the lower classes are stuck losing more money that they don’t have. When the rich are taxed at a continuously lower rate, the “fat cats” begin to get fatter. These wealthy business owners and CEOs living on an 8 figure income are keeping more money in tax breaks than the middle class. Taxes are complicated enough in itself, and former presidential candidate Bernie Sanders wrote an article describing how negative it is to an economy when the rich cut corners. “I Demand that the wealthy and large corporations pay their fair share in taxes. Corporations must stop shifting their profits and jobs overseas to avoid paying U.S. income taxes” (Sanders). In order to slim down the income gap, another huge problem that must be solved is ensuring the top percent of the country pays higher taxes than the middle class and poor. 

Giving workers a voice in their companies is crucial to helping the income disparity in the US. Union membership is extremely low compared to where it was in the 1960s. “35% of the workforce in 1960 were members in unions, by 2008 that number dropped to 15%” (Sutter). As union membership declined, worker’s voices continued to shrink. With little voice in their company, benefits and wages were overlooked by leaders of the companies. When more and more companies depend on shareholders, this also causes greater pressure to push wages and benefits down. Sutter also begins to claim that wealthy business owner corruption has a large role in the decline of unions. “The truth is, though, that the unions defend workers’ rights from ruthless, exploitative companies who would happily put profits before worker’s health and safety if they were allowed to” (Sutter). As labor unions continue to decline, many fear they won’t have any say in their jobs at all. Unions were made for a simple purpose; to keep workers safe, and to keep stable wages that workers can live off of. Coincidentally, as the union membership goes down, more and more people complain about unfair wages. The worst part is that their voices are now sometimes not being heard at all. An important key to remember is that every worker needs a voice, and if union membership continues to go down, wage stagnation will continue get worse. 

Considering income inequality is a complicated economic issue, there are two sides to the argument. A number of people in the United States don’t think it is damaging to the economy and the country. Firstly, People argue that income inequality creates better living standards for the middle class and poor. According to global data reports, developed countries with higher income inequalities have better living standards for the poor. Writer Connor D. Wolf argues that income inequality is good for America. He says throughout his argument about how income inequality leads to more innovation within the economy. “There are two ways to think about the one percent, the Bernie Sanders way where we’re all competing for a zero sum pie where it’s just a question of negotiations,” Conard said. “The second way, which is the one I put forward, is no, it’s really innovation in a knowledge-based economy” (Wolf). Connor Wolf believes that with entrepreneurs are becoming more willing to take bigger risks for bigger payoffs, more talented workers are created in the process. Another reason people like income inequality is because they believe people should be encouraged to work harder for more money. If someone works harder and receives a higher wage then it is not a market failure. By rewarding work, productivity will naturaly be boosted which leads to a higher national output. Individual merit and skills correlate to a higher job income. Some entrepreneur who started his own business allows the opportunity for the “trickle-down effect” to take place. This simple example would be that this entrepreneur will obviously make more than his laborers, but in turn supplied jobs to them that they did not have before. The trickle-down effect is very controversial in American society and not always efficient. One of the better parts of income inequality is the incentives that it brings for people to take risks. This goes back to the point about how entrepreneurs are willing to take bigger risks, as the rewards become more substantial.

Many people often think that income inequality also helps the economy by advancing technologies and goods. Writer for PragerU John Tamny believes that by having an income disparity, manufacturers in turn will produce more efficiently and quickly. “Thanks to income inequality, the rich were able to purchase infant products at their most expensive and least efficient states, which gave companies more incentive and financial capital to explore more efficient means of producing them to expand their market reach” (Tamny). An example of how this would benefit a specific product would be Motorola. When they introduced the first portable phone in 1983, it was $4,000 and was the size of a brick. Phone reception was poor, and calls were very expensive. If a small percentage didn’t buy the $4,000 brick, a $40 version wouldn’t be available to the public at a future time. In essence, income inequality allows for innovation to speed up when a select few are able to buy those products at a higher price, which allows the manufactures to eventually make more for cheaper. 

For many people they do not believe that income inequality does not imply injustice or some wrongdoing. Craig Sigular, a writer for debate.org, uses an older story to describe income inequality in society. The story includes a grasshopper, and an ant. Both have time during summer to prepare for the incoming winter. The grasshopper parties all summer, while the ant begins storing food. “The result is income inequality and one starving insect. But there is no injustice. Nothing the ant did caused the grasshopper's demise” (Sigular). What he is trying to say is everyone does have the same time and the circumstances of their futures were based on voluntary decisions made during that time. Everyone has many different talents, work ethics, and values. By understanding that, it would make more sense to why some are rich, while some are poor. 

In conclusion, the complicated economic issue still does not have an absolute solution. The problem is still ongoing, and therefore leaves room for possible claims to be made for a solution. Regardless of opinions, statistics do not lie. Income disparity has created issues in our country and society. Income inequality is a reason why (some) of the poor stay poor. These 50 million Americans living in poverty have less opportunities and educational experience because of this income inequality. Stagnated wages of middle of lower classes while the cost of living expenses continue to grow evokes a feeling of unrest towards the government. The top 10% of Americans earn on average over 9 times more than the bottom 90%. The top .1% earns over 184 times more than the bottom 90%. Economic inequality undermines the fairness of the economic system itself. It means that some children will enter the workforce more prepared than others. People with few assets find it extremely harder to access the first small steps for larger opportunities, such getting loans to start up a business or pay for an advanced degree. Income inequality is a mountain that will take time to take down. However, with certain interventions within our society and government, America will one day see a fairer and equal opportunity country. 
