Income And Poverty In The United States Essay

In the United States, high standard of living is not equally shared with in the Americans. The 1970s and 1990s was period where economic inequality began to grow. Emmanuel Saez, an economics professor at UC Berkeley has been doing a research for the U.S. income inequality. He states that there has been an increase since the 1970s, and has reached levels that have not been seen since 1928. “In 1928, the top 1% of families received 23.9% of all pretax income, while the bottom 90% received 50.7%. But the Depression and World War II dramatically reshaped the nation’s income distribution, by 1944 the top 1%’s share was down to 11.3%, while the bottom 90% were receiving 67.5%, levels that would remain more or less constant for the next three decades. But starting in the mid- to late 1970s, the uppermost percent income share began rising dramatically, while that of the bottom 90% started to fall.”(DeSilver) Ever since then, economic inequality continues to increase, especially in the last three decades.

Everyone knows what the word poverty means. It means poor, unable to buy the necessities to survive in today's world. We do not realize how easy it is for a person to fall into poverty: A lost job, a sudden illness, a death in the family or the endless cycle of being born into poverty and not knowing how to overcome it. There are so many children in poverty and a family's structure can effect the outcome. Most of the people who are at the poverty level need some type of help to overcome the obstacles. There are mane issues that deal with poverty and many things that can be done to stop it.

The view that the rich get richer and the poor get poorer has been heard repeatedly in reference to America’s income inequality. Though ironic, it comes as no surprise that America, a continent that easily trumps other countries in terms of wealth would be affected by the issue of poverty at such high levels. While much has said regarding the poverty levels, many economists, educators and scholars feel that the income inequality in America may be the reason why it is difficult to live and maintain a middle class lifestyle or to rise out of poverty into the middle class in the current economic state. With this in mind, the only way America, has a chance of lessening or eliminating poverty altogether is by understanding how it exists.

More than 800 million people in the world are malnourished, 777 million of them are from the developing world (Raphel, S., 2014). Poverty is an issue that must be addressed to the population loud and clear or everyone will end up suffering. There are many families trying to survive and live from paycheck to paycheck. Unfortunately, there are some families that are unable to support himself or herself or any family member. One important key issue of poverty in the United States is inequality. Many Americans blame the poor people for their own fate but you should never judge a book by its cover. There can be many reasons why an individual or families end up in poverty. For example, low wage jobs, discrimination and social inequality, vulnerability to natural disasters, war and political instability. Another big issue we face today is child poverty. This is a very critical issue because these young children are our future. If we let these children live in poverty, there is a higher chance they will drop out of school, look for work in order to support their family, or give up in life.

Increased income inequality is shown to increase the poverty rate. This is shown as more income moves apart from lower income brackets to upper income brackets. The Economic Policy Institute estimated that increased income inequality has increased 5.5 percent in from the year 1979 to 2007. This increase in poverty is reflected directly from income inequality as the bottom laborers in a business are working harder and gaining less, as the top workers, the CEO’s, and other executives are spending less time working, and more time counting their money. Income deprivation has been the largest driver of change in poverty rate, much above other factors such as economic growth, education, and race.

Furthermore, when analyzing the different classes, and the distributions of wealth and income in the United Sates; for instance, the upper, middle, and lower classes – it is an astronomical amount of wealth that the top 1 percent acquire. It is also noted by Johnson & Rhodes (2015), “that income and wage inequality have risen sharply over the last thirty years” (pg. 228). Equally important to this, is how the average change in income is divided in Americas quintiles and the widening gaps. For example, in Table 5.2, while the lowest fifth quintile increased from $11,128 to $11,361 – a difference of $233.00 from years 2006 to 2012; the highest quintile increased from $289,446 to $319,918 – an exponential increase of $30,472 (pg. 229). With income inequalities at this rate, it is difficult for the majority of the United States to experience upward social mobility. Pursuing this further, in a line stated by Johnson and Rhodes (2015), “The wealthiest Americans can live on the dividends from their investments without having to touch the principle or work for a salary” (pg. 230). From this, it is visible to see how society has compartmentalized different levels of functions to keep a so called balance for the greater

The issue of poverty in the United States seems to lie on the grounds of race education and family structure. As expected I found that educational levels paralleled poverty levels. Unexpected , research was found to prove that race did in fact play a substantial role in poverty. Family structure along with other influential factors either locked an individual into poverty or provided a means for escape from the continuing cycle. Other factors contributing to poverty was the location of homes or neighborhoods and the accessibility to better paying jobs.

In order to understand what could cause wealth inequality, the income in South Dakota will be examined. While it is well understand that income distribution and wealth distribution are two separate entities, the two are related and generally cause one another. In South Dakota, from the 1970’s to the mid 2000’s the household income of the bottom fifth grew by 24.3% (in real dollars) however, the income of the top fifth grew by 91.7%. In addition, if the timeframe is shortened to the 1990’s to the mid 2000’s the bottom fifth had a decrease in income of 12.5% yet, the top fifth still experienced 25.7% growth. As a result, South Dakota experienced the second highest change in income inequality during these periods (McNichol). The dramatic change

Many reforms in the UnitedStates have been passed to help fight against the “War on Poverty”; but it has not been effective in eradicating poverty in the U.S. There are about 46 million people who are living in impoverished conditions and poverty continues to be a social issue in this country (Heritage Foundation, 2011) In the beginning, our country was formed under the belief that “this land is the land of opportunity and if we worked hard enough the American Dream can be gained” (Schwarz, 1997). People immigrate to this country today in hopes of becoming rich so they could gain a better life. In spite of coming to this country for a better life, many are faced with the lack of skills and money to succeed. In the end, most will end

The United States defines poverty for a family of four as being less than $16,036 per year, or $4,009 per person (Leone 12). People find themselves under this line for an innumerable amount of reasons. Some of these causes are under one's control and others are greater factors beyond an individual's power. Each family or individual person has unique and separate reasons for living in a state poverty. There is no way to try and define them all. Focusing in, three main topics arise that encompass the most predominant reasons for a person to fall into poverty. Education, family life and influence, along with the business cycle may work individually or together to cause poverty. These three leading

The highest earning fifth of U.S. families earned 59.1% of all income, while the richest earned 88.9% of all wealth. A big gap between the rich and poor is often associated with low social mobility, which contradicts the American ideal of equal opportunity. Levels of income inequality are higher than they have been in almost a century, the top one percent has a share of the national income of over 20 percent (Wilhelm). There are a variety of factors that influence income inequality, a few of which will be discussed in this paper. Rising income inequality is caused by differences in life expectancy, rapidly increases in the incomes of the top 5 percent, social trends, and shifts in the global economy.

This “middle-class nation” is struggling to support all those who live in its borders and the misconceptions about wealth are vastly overrated. Furthermore, the idea of wealth and stability is incorrect, and there is a very sharp contrast between the rich and poor in the country. As the richest twenty percent of American hold ninety percent of the total household of the total household wealth in the country, those at the bottom have managed very poorly and suffer to get through the days.

Capitalism has been the central force behind the growth of the United States’ progressive economy. Within such advanced economic system the chances of economic disparity are significantly high. In fact, over the past three decades there has being a steady increase in unequal wealth distribution among the economic classes. To sustain the current unequal wealth distribution among the classes of the American population, there are numerous factors that influence and shape this trend. For some members of the population it is alarmingly disturbing to know that recent statistics have shown that, “In the US [alone] the wealthiest 1% of its population owns more than the bottom 95 %” (Gutman). As for the difference in economic wealth, it resulted

The Federal Reserve Board’s Survey of Consumer Finances (SCF) was the study used on this article for its main analysis. This survey dates from the 1992 to 2010, and includes the information of household income, wealth holding, and other financial topics. In addition, the survey includes a subsample of the most affluent households, and groups them into different categories according to their wealth. However, the edge key that makes the SCF better than other surveys is the fact that it has more information when it comes to the different financial situations of the elites. As a result, the SCF is considered by many experts in the field of finance as one of the best sources on the wealth and investment behavior of the citizens in the United States.

Before the onset of the 2007/2008 global financial crisis, the 10% richest Americans group owned 80% of entire financial assets in the United States. The top 20% richest Americans possessed 85% of the nation’s wealth meaning the bottom 80% of Americans only owned 15%. At this time, the richest 1% owned 35% of the total wealth of America. After the great financial recession that began in the last quarter of 2007, these figures changed dramatically. The portion of American wealth owned by the 1% richest Americans rose from 35% to 37.2% while that owned by the 20% richest Americans increased from 85% to 87.8%. The global financial crisis led to a drop of 36% in the middle class wealth but only a decrease of 11% for the top 1% richest people in the United States. This further widened the gap between the two groups. At the start of the current decade, about 51% of the American population was in the middle class. This was a 10% drop in the middle class population from that of the previous 40 years.