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Unequal Distribution of Wealth in the United States

Nathan L. Bright

APUS

In spite of the United States being the richest nation worldwide, it also leads to unequal distribution of wealth. According to a report released by Allianz on the Global Wealth Report 2015, global personal wealth amounts to $153.2 million. Of all this wealth, the United States holds a share of $63.5 trillion of the private wealth in total, which is the largest in the world. This wealth is possessed privately (Amadeo, 2017). But, distribution of this wealth is uneven, where there are few of the U.S. citizens who possess the largest part of it, while the majority are considered poor. Apparently, there are no efforts put in place in the attempt to close the gap, and as a result, the poor are becoming poorer and the few who are rich becoming richer.

There is a wide range of evidence supporting the claim that the United States has the largest gap between the few rich and the poor who are the majority and that the gap is widening further. According to Forbes, to come up with the net worth of wealth, all liabilities are subtracted from total personal assets. Assets include account savings in both bonds and stock, retirement accounts, and real estate investments. On the other hand, liabilities are what a household owes which may include mortgages, student loans, credit card balances, car loans, among others. In looking at the distribution of these in the United States, inequality is being seen to increase. According to Forbes 400 list f America’s richest, their wealth has skyrocketed from $2 billion to $81 billion, from 1982 to 2016. This is indeed a great gain.

But, for one to engage in investment, they have to use capital, which is mandatory. The top richest U.S. citizens, who are considered to be 1% posses 40% of the nation’s wealth, and on the other hand, 80% of the citizens own just 7% of the wealth. Concerning additional wealth, the 1% had earned more than the wealth gained by 90% of U.S. citizens who are not rich. Of the whole population of the United States, one-quarter of the citizens makes $10 per hour or less. This income is below the federal poverty level. These are earnings that guarantee real struggle to meet basic needs, considering that there are bills to settle. Many of people in this category take home just 50% of their total income. This is according to report by Sharman (2015). Additionally, from 2000 to 2006, the population of the Americans who live below the poverty line increased by 15% where earnings for workers dropped down to below $10 per hour, with their annual income amounting to $20, 614 (Sherman, 2015).

Engagement in unfair businesses is to blame for this economic state of the United States. They include of using cheap labor from China and other countries, outsourcing of jobs, and unfair exchange rates. Also, the small percentage of U.S. citizens who are wealthy own large firms that make large profits. They are often blamed for putting their interest—making profits first, instead of minding the well-being of their employees first. Since Chinese and Indian companies offer products and services at low prices, the ones based in the United States are compelled to lower their charges too to remain competitive (Lowrey, 2013). Keeping in mind that they still have to make a profit to sustain themselves in the market, they consequently find themselves in states where it gets hard for them to have good compensation for their workers. This in turn lowers the income of the poor Americans while the owners of the firms still make a profit.

Lately, the federal government of the United States has put in place laws that have been found to favor investors more than the low-income earners. For instance, the government recently passed deregulation, which would restrict it from being involved in stringent investigations concerning labor disputes. The minimum wage per hours in the United States has only risen to $7 from $5.15 for 10 years from 2007, which is a very sluggish rate of growth. Companies are also allowed to draft laws, terms, and policies that favor against low-income earners. For instance, Wal-Mart, is a multinational company that has more than 1.4 million employees worldwide—with the majority being based in the United States, has set new standards to reduce employee pay and benefits (McCarty et al., 2016).

Certainly, the United States is faced with radical challenges. Most of the rich households in the 1% of U.S. population earn the wealth through inheritance. In looking back at the history of the United States, even now, the country is fighting against racial discrimination. Some households have thrived from slavery which ended on the eve of World War II. This population is comprised of African Americans and Native Americans. These people were faced with illiteracy and thus, securing decent jobs remained dreams to them (Curl, 2012). On top of that, they did not own homes and thus, most of the petite earnings they made went to the pockets of landlords—who in most cases comprised of the wealthy 1% of the population that exists now, the rest to feed and clothing. With the little earnings, and joblessness topping it up, these individuals struggled with the little earnings they could make for education and save with the hope of mortgaging homes some day in future. However, it would be weak of a person to blame fate on their wealth status. This is because each person can invest the little they have and reach the top.

In summary, it is indeed a fact that the United States leads to unequal distribution of wealth worldwide. The gap is growing wider each day. The contributors to this problem include the greed of the few rich, government introducing policies that favor against the poor, and competition where other countries such as China and India supply cheaper products and services.

Amadeo, K. (2017, August 25). The True Cause of Income Inequality in America. Retrieved January 05, 2018, from https://www.thebalance.com/income-inequality-in-america-3306190

Curl, J. (2012). For all the people: Uncovering the hidden history of cooperation, cooperative movements, and communalism in America. Pm Press.

Lowrey, A. (2013, September 10). The Rich Get Richer Through the Recovery. Retrieved January 05, 2018, from https://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-through-the-recovery/

McCarty, N., Poole, K. T., & Rosenthal, H. (2016). Polarized America: The dance of ideology and unequal riches. mit Press.

Sherman, E. (2015, September 20). America Is the Richest, and Most Unequal, Country. Retrieved January 05, 2018, from http://fortune.com/2015/09/30/america-wealth-inequality/