Income Inequalities in the United States - Research Paper Example

Topic Forbes recently posted information that there is an increasing income inequality which will seriouslyhurt the American economy but also has acknowledged that this is a result of a dynamic economy growth where the bottom and the middle income families are left behind by those who are holding the reign of capital (Allen, 2012). Economists posit that if the wealth from the middle class is transferred consistently to corporate elites, the concentration of wealth, as a consequence, will be solely enjoyed by the 1% households of bourgeoisie (Allen, 2012). Nowadays, income inequality in experienced by gender, race, outsourced industry, disruption of income, by core competences, and these issues can be holistically understood using the tool of value chain analysis. On gender-based income disparity, Kirk (2012) bared that American just earn a fraction of men in every state. The worst income inequality is in Utah where a working woman earns 55 cents for every dollar earned by man. This is succeeded closely by Wyoming where women earn 56 cent, Louisiana at 59 cents, North Dakota at 62 cents and in Michigan at 62 cents (Kirk, 2012). There is relative gender-based income equality in the state of Hawaii, Florida, Nevada, Maryland, and North Carolina where women earn about three-fourths of what men received as salary (Kirk, 2012). This somewhat disparage the supposed economic empowerment of women to discrimination and contributed too to the income disparity in the country although some thought that there are efforts made to curb this gap in wages (Fairchild, 2012). Experts however opined that wages should also be looked by the workers level of education, the time devoted for labour, the experiences they earned that made up their expertise, and the nature of jobs taken. Notwithstanding these factors, advocates for labour standards expressed that those who are sharing similar conditions and family conditions are still suffering income inequality. Last year, 2011, the median of disparity is pegged at 23% as women earn about 77% of men’s income (American Association of University Woman, 2012). That gap is still felt among highly educated workforces (AAUW, 2012) Under the Civil Rights Act of 1964 and the Equal Pay Act of 1963 uphold equality of payment of regardless of race, religion, beliefs, organizational affiliations or national origin. It bar discrimination at work and promote equality in workplaces but advocates argued the need to pass more legislations ensure effective enforcement of these policies. However, Weller and Ajinky (2012) however still pointed that the blacks are still paid less than white and that economic insecurity is more felt by Afro-American, the race who rose up historically from slavery. Weller and Ajinky (2012) reported that as of the last quarter of 2011, median weekly earnings for African Americans were $617 while Latinos earned $549 in comparison to whites that earned $774. They also noted the rapid increase African workers with salaries below the average rate. A good statistics of population depicted high figures of blacks that are unemployed. There were about 88.9 % unemployed Afro-Americans and using the inflation-adjusted median income, they dropped their income by 7.1% from 2007-2009 (Weller, Ajinkya, & Farrel, 2012). This correlates to their rate of poverty at 24.2 % higher than Asian immigrants, Latinos and of whites (Weller, Ajinkya, & Farrel, 2012). But all these are contextualized within the development of a complex liberalized economy where the outsourced industry thrived well. The advancement of communication technology also permeated corporations to opt for skilled human resources that could work on domestic needs via online tools. The latter has been put to question because the employment opportunity is being offered externally to emerging nations and therefore, sort of cracked to the domestic populace without work. But the outsourcing industry is significantly in context to business strategies that aimed at a globalized operation that is optimizing the cost on corporate real property taxes and of maximizing skilled human resources but are socially acceding to low salary scheme. The latter is of course, based on the living conditions and the nature of economy within the region. Viewed critically, there remains inequality of wages and promotion in emerging nations and there is still income gap between American workers within the outsourced industry and those in India, Philippines or China. Researchers argued that international trade influence residual wage inequality through its effect on industry wage premium (Pavcnik. 2012). Economists argued that excessive income inequality destroys economic growth. This has been the root cause of economic depression which was empirically experienced during the Great Depression and also felt in the recent financial meltdown. National resources, budget allocations, and financial management should not be left to bad decision-makings that could ruin the national economy. They likewise argued that if the disproportion of economy scale up more, disaster would likely because the bulk of national wealth will be controlled by 1% of the whole populace (Mountain Math Software, 2012). The few who’d be controlling these resources although a significant portion of their capital might be reinvested but certainly, this will only be made to increase its profit while the rest of the larger population will struggle to balance its weakening purchasing power (MMS, 2012). They may avail for loans to supplement their consumption and needs but eventually credits will sink them to the drain and the vicious cycle of debts (MMS, 2012). This is also true at the macro level since levels of employment are sustained by corporate capitals whose business operations are infused by debts made to public and private banks with interests (MMS, 2012). Hence, the country has an economy that is reliant to debts, mortgages, loans and foreign debts. Economists argued that if accumulation of wealth is not concentrated to the few, then it possible to prevent economic collapse (MMS, 2012). This similar problem has been observed since 1979 up to this year as this has also tremendous implication in raising the revenues. Experts and a number of researchers have undergone extensive studies about the causes of inequalities in American society and have recommended the improvement of American financial management and investment, resource use, improving social capital through educational to make the human resources more competitive. Introducing nutrition to its populace will hopefully reduce the negative aspects of consumerism and might help scale up peoples’ health by using nutrition as a resolution to the causes of mortality and morbidity (Turak, 2012). The income statuses of Americans, including its immigrant constituents, will also reflect how the government would now manages its progressive taxation with balanced competitiveness and cooperation as the administration geared its taxation policy reform. The latter is reliant on the skills of its peoples and its capacity to seek economic opportunities or employment amid challenges in labour condition. This is in reference to the increasing number of populace who have attained certain degree of education but are also facing the challenges of unemployment issues. Since there are others who perceived that the income disparity will be the end of American dream, everyone must take an opportunity of improving their initiatives to reduce poverty and become part of the 72% who endeavoured to reach the scale of middle class families with an income bracket of P55, 000 a year (Turak, 2012). For them, this is possible if children complete at least high school education, work full time and gets married at the age of 21 (Turak, 2012). Turak (2012) likewise recommended the need to reduce non-essential purchases of alcohol and drugs noting that the most critical part of sustaining life’s basic need is when one decides to get married and have children. Financial management must also be done at home to ensure that priority needs are addressed instead of those non-essential goods used to boost unnecessary vices. Early marriage and staying unemployed are pretty incompatible and irresponsible as well. Thus valuing family is quintessential in the management of income and responsibilities in family affairs. Sociologists and economists contended that using value chain analysis could help the government, corporation, and organization advocating for social and income reforms to improve or deepen the understanding of peoples’ situation and to identify coping strategies to help reduce poverty (Research Into Use, 2012). Value chain analysis will also facilitate find coordinative mechanism to understand the chain actors and its relation to income generation, as well as its use (RIU, 2012). It can also help identify alternative strategies to resolve issues on migration problems, challenges of rural employment, adoption of pro-poor policies and programs, and changing the international landscape as a consequence of globalization (RIU, 2012). From a corporate perspective, the value chain analysis will also help us understand where capital or wealth is accumulated, what supported this system, how these can be utilized to ease national economic burdens, what are the processes to strategically reform to balance the flow of wealth and address income imbalances as well, and adopting programs that will nurture responsible parenting in all households to make them more accountable in their expenditures by prioritizing necessary and fundamental needs over non-essential goods (RIU, 2012). Hence, financial management must not be only fully understood within the context of governance but also in the micro-economic level: income derived and expenses made per household. But most of all, the government must also address all these concerns using mixed non-conventional and traditional way of resource and finance use through policies and accurate economic programs. Works Cited Allen, F. How Income Inequality is Damaging the US. Forbes, Forbes Inc. LLC., US. 2012. Print. American Association of University Woman. The Simple Truth About the Income Gap, 12th Ed. Washington, DC. 2012. Web. 20 Dec 2012. http://www.aauw.org/learn/research/upload/simpletruthaboutpaygap1.pdf Budnik, P., Inequality of Wealth and Income of the Great Depression, Mountain Math Software , Los Gatos, CA. 2012. Web. 20 Dec 2012. http://www.mtnmath.com/banana/greatDepr.html Fairchild, C. The Worst States for Gender Income Inequality Report, Money, Huff Post, TheHuffingPost.com . US. 2012. Web. 20 Dec 2012. Kirk, C. Map Shows the Worst State for Women To Make Money: Gender Income Inequality by State and Country. Slate, Washington Post, Arlington, VA. 2012. Web. 20 Dec 2012. Pavcnik, N. “Globalization and within Country Income Inequality.” In: Making Globalization Socially Sustainable. World Trade Organization, pp. 233-255. 2012. Web. 20 Dec 2012. http://www.wto.org/english/res_e/booksp_e/glob_soc_sus_e_chap7_e.pdf Resource Into Use. The Value Chain Approach to Poverty reduction and Development of Livelihoods. Natural Resources Knowledge, UK. 2012. Web. 20 Dec 2012. http://www.researchintouse.com/nrk/RIUinfo/valuechain/valuechain.htm Turak, A. Is the American Dream Dead? The Four Inconvenient Truths Behind Income Inequality. Forbes, Forbes Inc LLC. N.d. Web. 20 Dec 2012. http://www.forbes.com/sites/augustturak/2012/07/02/is-the-american-dream-dead-the-four-inconvenient-truths-behind-income-inequality/ Weller, C. & Ajinkya, J. Economic Gap Widens for Blacks. TheRoot.com, Slate, Washington Post, Arlington, VA. 2012. Web. 20 Dec 2012. http://www.theroot.com/views/economic-security-still-issue-blacks Weller, C., Ajinkya, J. & Farrel, J. The State of Communities of Color in the US Economy. Center for American Progress. 2012. Web. 20 Dec 2012. http://www.americanprogress.org/issues/poverty/report/2012/04/12/11423/the-state-of-communities-of-color-in-the-u-s-economy/ Read More