Inequality has always been a detriment to society, no matter the form or issue of focus. Throughout human history, various groups of people have yearned for and even fought for equality. Within the past fifty years, most especially in western nations such as the United States, many people have fought for voting equality, workplace equality, and civil rights issues such as equality among race, religion, sex, and nationality. While there exists much to fix in all of these areas; today, income and economic inequality has grown to the point where it has severely affected society. Due to the Great Recession, income and economic inequality has grown around the world, especially in western nations. This has slowed economic growth in countries where growth had previously been abundant and has resulted in much of the human population having far less economic freedom than before the Great Recession. Income and economic inequality is destructive as it hurts large groups of people due to constraining their economic freedom and liberties. As the issue of income and economic inequality has gained notice and momentum, many people have now become aware of the potential risk that economic inequality poses to a post-industrial and egalitarian society, and why society must face this issue head-on in order to progress and create a better future. 

In the 2016 United States Presidential Election, income and economic inequality became a center stage issue during the Democratic Party primaries as Vermont Senator and presidential candidate Bernie Sanders turned income inequality into a mainstream issue for many voters throughout the United States. While the issue had been covered, it had previously been seen as more of a fringe issue prior to the election. As a central tenant to Bernie Sander’s policy platform, his campaign created and published several videos in an attempt to elevate this issue and thus educate the public regarding the widening gap of income inequality and economic disparity. Sen. Sanders opens the video by asserting the fact that “for the last forty years, the American middle-class has been disappearing and more Americans are living in poverty, than at almost any point in our nation’s history” (Sanders). While income inequality is not an issue that did not exist prior to Bernie Sanders or even fifty years ago, the gap between those with a higher income versus those with a lesser income has become more pronounced as the middle class in America has been shrinking. As such it has become a growing issue for the latter half of the twentieth and the beginning of the twenty-first centuries. The problem of income inequality appears to be accelerating for many as “real median family income is almost $5,000 less than it was in 1999… [and] over the last two years… the wealthiest fifteen Americans in this country… haven seen their wealth increase by [1,700,000,000]” (Sanders). New reports have even show that “the 1 percent’s share of total U.S. income is roughly 20 percent” (Lam). With these changes becoming more visible, economic inequality has taken root in people’s minds now more than ever in American society; as evidenced by the rise of left-wing politicians such as Bernie Sanders, Elizabeth Warren, and Al Franken, as well as the creation of political movements such as Occupy Wall Street in 2011. Economic disparity has also lead to a transformation in right-wing politics which has resulted from the contributing factors of rising levels of poverty and unemployment in the “Rust-Belt” and other rural areas of the United States, and the rise of the Tea Party following the 2008 Presidential Election due to a sense of betrayal with the bailout of big banks. This issue has progressed further as populist politics has risen and led to the election of a populist president, Donald Trump, in 2016. 

Many theories explain the increase in economic inequality of recent decades, Adam Cobb offers an explanation that “globalization in the 1980s and 1990s stemming from the integration of Brazil, Russia, India, China… and other emerging economies in the world economy significantly increased the supply of low-skilled workers at low wages” (Cobb 747). In recent years, many people have blamed free trade deals such as NAFTA and the unratified Trans-Pacific Partnership for hurting the American economy and increasing wealth disparity. Also, an increase in technology has hurt many low-skilled labor jobs as “information technology… has allowed many low-valued tasks to shift from labor…such as shifts from travel agents to online booking engines and from labor assembly lines to robotic assembly lines” (Cobb 747). Technology, particularly robots, has been seen as a threat to unskilled labor and a “livable wage” as it become much cheaper to replace a human with a robot or other technology. Generally speaking, a robot has become faster and more efficient than a human. Even if it cannot perform all tasks performed by humans; the robot can perform many tasks and has become an increasingly less expensive source of labor. Likewise, it is much cheaper to replace travel booking agents with sophisticated software on a booking website or replace cashiers with self-checkout lanes. In the end, cost remains the driving factor for employers and the lower cost method wins. Sadly, many laborers might feel scared to stand up to their superiors to protect their jobs as “between 1986 and 1987, 29 percent of employers faced with union drives threatened employees with shutting down operations” (Stelzner 25). Hence, as employees are faced with the potential of losing their jobs, they keep their heads down in hopes of earning one or two more paychecks before they are sacked by their bosses. Thus an increase in technology will only lead to an increase in economic inequality as low-skilled labor will lose their jobs while high-skilled, high-paying jobs will largely remain unaffected, although even here there are threats to labor. A radical change in labor markets due to automation will end or limit people’s economic freedoms and is the irony of free-market capitalism. The central tenant of capitalism has been that people will acquire more economic freedom and thus more liberties throughout their entire life. But left to their own; corporations, hedge funds, airlines, grocery stores, etc., will attempt to automate their business practices and downsize the number of employees to lower costs. Yet, despite this newfound “freedom” that people have gained by having a free market, people lose their economic freedom due to corporate interests to place profit before people resulting in less freedom for the working class and shrinking middle class.

Serbia, a member of the European Union, has experienced its own share of income inequality since its transition from a planned economy to a market economy following the dissolution of Yugoslavia in the 1990’s. Serbia has struggled to find economic solid ground during its short history as an independent country, as it “was a latecomer to transition due to armed conflicts, international isolation throughout the 1990’s, political and economic instability, and post-conflict rebuilding” (Krstić 25). Despite its efforts to transform into a market economy, Serbia lacked “many crucial reforms, such as privatization, business restructuring, and improvement of the business regulatory framework were incomplete when the global economic crisis started” (Krstić 25). One contributor to income inequality has been the lack of full-time, well-paying jobs. Serbians face economic hardship not due to “the [labor] supply… but rather the characteristics of the job (hours of work, type and quality of employment)” (Krstić 34). The nation’s problem does not stem from the amount of unemployed, but the quality of the job’s that people hold. Serbia has a high number of people working informal jobs that “earned significantly less than those in the formal sector” (Krstić 27). Statistical data has shown that income inequality is much higher in the Republic of Serbia than in other EU nations. Even nations that have struggled immensely in recent years such as Greece, Portugal, Spain, and Romania have lower income inequality according to Gini coefficients, placing it “among the highest in Southeast Europe, and higher than in EU countries with the highest inequality… such as Lithuania…, Bulgaria…, and Latvia” (Krstić 30). Despite the liberalization of the Serbian markets over the last twenty years, it continues to face increasingly high levels of income and economic inequality. Much of the Serbian people’s economic liberties and freedoms are capped and limited by the lack of quality jobs and the radical and exponential expansion of income and economic inequality, not just within the country’s own boundaries, but within the European continent as well.

Wealth inequality can even exist in online video games that feature an in-game economy. As virtual worlds are controlled by real-life humans, logic would indicate that the in-game markets would reflect the economies of the real world. World of Warcraft, one of the best-selling video games of all time, has been studied numerous times due to the size and volume of the in-game economy. In 2011, a survey conducted by TheGoldenCrusade.net, revealed that “‘[t]he 99%’ owns only 75.75% of the wealth, leaving 24.25% to the top 1% of players” (Dekker). The online game Guild Wars 2 has even released studies about the in-game economy. John Smith, the resident economist for Guild Wars 2, found that “by the end of the [Guild Wars 2] beta 85% of the wealth was… spread amongst 50% of the population” (Smith). This meant that the in-game economy of Guild Wars 2 had less disparity than the real economy of the United States. However, the data compiled in this study came during the final development period of the game leaving much to speculate as to how the in-game economy would progress after the game was released in 2012. Despite the seemingly successes of these virtual economies, the survey conducted in 2011 by TheGoldenCrusade.net revealed that “82% of players were under the reported sample average” (Dekker). The website conducted the survey again in 2013, finding that the amount of players under the reported sample average remained virtually unchanged at 80%. The 2011 survey concluded that the in-game economy of World of Warcraft was “top-heavy” and that large amounts of in-game currency sitting unused in player’s accounts was unhealthy for the in-game markets (Dekker). This can be compared to the United States of America as the share of wealth owned by “the bottom 90% has plummeted from 36% to just 23%” since 1985 (Sanders). This can also compare to criticisms of trickle-down economics. If in-game currency sits unused in players accounts’ it does not help the economy in any way, shape, or fashion. Many people criticize “trickle-down” or supply-side economics as they believe that the upper class will not spend the extra money they have now acquired due to conservative economic policies and this will only increase economic disparity. This is not entirely true as the wealthy can still help the economy through investing into new business opportunities or expansion of existing business operations or at the very least provide deposits at banks; which in turn will make loans for these same purposes. This is different from the in-game economy; however, even with this considered, the criticism of supply-side economics remains that it disproportionately benefits those who already have wealth more than those in the lower income or the middle-class brackets and thus income and economic disparity grow, even if all ships are rising. Another distinction in the in-game and real world economies exists as players can quit playing if they no longer have an interest in playing due to no longer being able to afford armor upgrades or spell enchantments for their characters; however, reality does not have this luxury. Instead of avoiding the issue, economists and politicians must look to potential strategies to defeat the disparity created by income and economic inequality. 

As wealth disparity and income inequality grows and the gap between the poor and rich widens, many people have begun to question the future of the current economic and social systems that have become the norm in society. In a recent economic survey, participants- including economic, government, and members of academic institutions- concluded that “worsening income inequality can’t be remedied by higher economic growth alone and is casting doubt on the very future of capitalism” (Gensler). This thought towards the ideas of capitalism has been echoed by many historical figures in the United States. Martin Luther King Jr. argued in a letter to his wife that “capitalism has outlived its usefulness”, emphasizing that “I am much more socialistic in my economic theory than capitalistic” (King et al. 123-126). This type of thought, an opposition to the current economic system by one of the most known Americans in history, highlights the danger that the current system faces. Prior to leaving office, Former Vice-President of the United States, Joe Biden, urged economic and political leaders at the World Economic Forum to consider the actions they make today and consequences those actions will have tomorrow. Biden insisted that the future of “the ‘liberal international world order’ is at risk of collapse’” and while globalization has helped many business leaders, “globalization is benefiting people at the top… [and] the middle class is being hollowed out” (Yarow). With many people around the world beginning to grow skeptical of politicians and business leaders, it calls into question the future of globalization and the capitalistic system. It becomes much harder for a system to survive when much of the youth of the world and those at the bottom of the economic chain begin to say the current political and economic system has become dated. If economic and political leaders wish to secure a future for liberal parliamentarianism and the current ideals of free-market capitalism, they must work to fix the errors that have been created and work to create a global economy that creates wealth for all people, not just those with existing wealth.  

Despite growing income inequality throughout the world, there are many who would seek to oppose the points made in this paper. People like John Tamny, the editor of RealClearMarkets, argues in a conservative slanted video put out by PragerU, a conservative YouTube channel, that income and economic inequality does not create a detriment to society but instead acts as an upside and miracle of free market capitalism. Tamny argues that a free market allows for people to specialize themselves to reach their goals and that “as long as you have the freedom to guide your own destiny, you have the chance to reach your full potential” and “forced equality means less opportunity to pursue what makes you individually great” (PragerU). In the same video, he argues the rich, the one percent, are beta testers for new inventions and products and thus doing a service to society. He sources the cell phone as an invention that the rich helped make available to society saying “if no one had bought that $4000 brick, there wouldn’t be a $40 cell phone today” (PragerU). One of the last points Tamny makes is that income inequality lead to prosperity and abundance and enriched the lives of those who are living normal lives. 

While income inequality is a real problem and detrimental to the economy as a whole, what action can society take to correct it? In today’s global economy this becomes a difficult issue to resolve and we should address it from a global perspective where and when possible. Ideas include increasing the minimum wage, providing ownership in a company to employees, strengthening labor rights, better school funding formulas, expansion of Medicaid and providing affordable child care. These steps would not erase the problem overnight, but could provide a stepping stone to stop the widening gap.

In summary, income and economic inequality has become a contentious issue over the last decade and despite the lack of awareness of the issue by many people throughout society; economic disparity has festered and ingrained itself into our society and now undermines the premise of free market capitalism leading to wealth and prosperity for all. One can observe economic inequality as a detriment to society all over the globe, from the Mekong Delta in southern Vietnam to the Rockies in the United States of America. Income inequality continues to spread and cause harm to all people. It caps economic liberties and freedoms, the very things that free market capitalism and supply-side economics swear to uphold and protect. As long as people continue to deny that an economic problem exists or even defend the inequality, professing gratitude to those who prolong its existence, calling them “job creators” and “economic experts”, then there can exist no hope of solving the issue. The first step to correcting a problem requires and admittance that there exists a problem and until people from around the world admit that the current economic and/or political systems do not fit today’s needs, then income and economic inequality will continue to spread, fester, and ingrain itself into our everyday society. 
