Category Archives: Middle class

A Solution to the Wealth Inequality

The rich are getting richer and the poor are getting poorer. And by poor I mean everyone who isn’t part of the 1 percent. Wealth allocation in America has become so inflated and one-sided that the elite 1 percent own 50 percent of America’s riches. Americans have had to endure this corrupt economic model for years.

Enough is enough.

Here are a couple of ways to remedy the mass inequality and even the playing field for all.

The wealth gap between middle class workers and grossly overpaid executives is outrageous and yet these average employees are still paying higher taxes. The government’s duty is to serve the people, therefor they should alleviate inequality and poverty by instilling a fair tax system that cuts down on the top earners and helps build up the bottom. In order to cut down on inequality, wealth redistribution is essential. With that said, a progressive tax should be imposed on all in order to better reshape this country into a fairer nation. Under progressive taxes, those who earn more are taxed higher and those with less income pay less in taxes. The economic resources gained from the tax cuts on the rich could be put to use by using it on improving public education, medical research and other societal functions. During World War II, President Roosevelt put forth a 94 % tax rate for top earners. Since then, the U.S. has experienced decreased progressiveness in its tax policies over the years and as a result income inequality greatly increased by allowing the elite access to capital.

While the methods and ideas brought up may not be the solutions that will ultimately fix everything, something must change! All we want is just a fairer world to live in.

-Quenton

 

 

Who Will Save The Middle Class?

With income inequality on the rise, middle class earnings stuck, and more people being forced to rent because of lack of money, the middle class has been stagnant for years. Before the financial crisis of 2008, the U.S. already took first place for containing the highest disparity of wealth in the industrialized world. Since then, the gap between the wealthy elite and the remaining 99 percent has only worsened with those in power now in possession of over 70 percent of all monetary assets. With the 2016 presidential elections rapidly approaching, can any prospective candidates offer this change?

When it came to economics during the Republican president debates, the worries of the middle class were largely passed over for other topics. During this time, I only counted three times that the phrase “middle class” was spoken. Whenever the topic of the middle class became the focus of discussion, the candidates seemed intent on trying to one-up each other with bigger tax cuts that only benefited the already wealthy elite.

On the other hand, Democrats mentioned the middle class eleven times. Democratic nominee Hillary Clinton has solidified her campaign around gaining benefits for average working class families: increasing child care support, decreasing the cost of public college costs, and demanding required paid leave. Democratic candidate Bernie Sanders has spent a considerable amount of his campaign blasting the one percent, saying that “we are living in a rigged economy where 57 percent of income is going to the top one percent; it is immoral and wrong that the top tenth of one percent in this country own as much wealth as the bottom 90 percent.” To save the middle class, Sanders wants to create more well-paying jobs, tax the rich, and overhaul systems that spread inequality such as our current criminal justice system.

-Quenton

The Gender Wage Gap

Women comprise half of America’s workforce. Yet oddly enough, for every dollar a man nets, women earn roughly 77 cents. How is that just? How can something so one-sided exist in a progressive society such as the U.S.? The gender wage gap is a massive hindrance to a woman’s equity and chance at the world. Even right here in Connecticut the gender wage gap is alive and well. As a matter of fact, Connecticut holds the widest wage gap out of all the states in the Northeast, with the city of Fairfield containing the leading difference. Good find.

In the U.S., more than one in three women live in poverty or are hovering around it, and four out of ten kids living in poverty belong to families that only contain a sole female parental guardian looking after them. Too many of these lone women are dealt with numerous responsibilities and surmounting odds: paying rent, figuring out a way to earn money and still find time to spend with family, scraping up enough money for presents, etc. How are they supposed to face these challenges and provide for their loved ones with lesser wages? With these conditions, are they supposed to?

When single mothers take on the responsibility of providing for the welfare of their family, something has to give: their hopes and aspirations. Dreams are cast aside, sometimes forever, to make sure that there is a roof above their kids when they are sleeping. Still thinking of pursuing a degree at a college? How can you with health care and child care breathing down your neck? It’s ironic that for a nation that was built around the American Dream, many of its female citizens have to sacrifice that right because of an archaic attitude that still sadly exists today: inequality.

-Quenton

Where Will The Middle-Class Go?

Less people are buying houses these days as a result of the increase in home prices. But those who do end up as homeowners are able to prosper because of the equity from their house. As more people rent and less people buy homes, the benefits of owning a residence are going to a smaller select group of people and thus contributing to the wealth inequality in the U.S.

Expensive housing helps spread of economic inequality. Over the past couple of years, the costs of purchasing a house have skyrocketed. In San Francisco, middle-class families are only able to purchase 14 percent of homes located there.  Slowly, the middle-class is disappearing. The distortions in housing ownership by the middle-class and wealthy are due in part to the growing divide in income inequality. As income inequality continues to widen, those with greater wages will be able to buy more when trying to obtain a house. As a result, this intensifies the cost of houses and contributes to the wealth inequality across a town. The high rate of income and house owning costs of New York is an example of this effect.

The concentration of wealthy households in an area segregates social classes and contributes to the erosion of the middle-class. Because of particular schools, jobs, and neighborhoods, families will flock to a particular area and add to that region’s wealth with their income. Unfortunately, other areas are left to languish and worsen as crime and lower housing levels drive people away. This leads to a societal class divide in the town and ultimately a future with an increased economic inequality. Unless something changes, the current housing wealth inequality situation is only going to worsen as concentration of housing wealth increases in the near future.

-Quenton

The Wealth Divide

From Multinational Monitor, May 2003:

LINK:      http://multinationalmonitor.org/mm2003/03may/may03interviewswolff.html

Multinational Monitor’s Interview with Edward Wolff: Professor of economics at New York University

“The Wealth Divide The Growing Gap in the United States Between the Rich and the Rest”.

MM: What portion of the wealth is owned by the upper groups?

Wolff:

The top 5 percent own more than half of all wealth.

In 1998, they owned 59 percent of all wealth.

In another way, the top 5 percent had more wealth than the remaining 95 percent of the population, collectively.

The top 20 percent owns over 80 percent of all wealth. In 1998, it owned 83 percent of all wealth.

MM: Where does that leave the bottom tiers?

Wolff:

The bottom 20 percent basically have zero wealth. They either have no assets, or their debt equals or exceeds their assets. The bottom 20 percent has typically accumulated no savings.

A household in the middle — the median household — has wealth of about $62,000. If you consider that the top 1 percent of households’ average wealth is $12.5 million, you can see what a difference there is in the distribution.

MM: What happens when you disaggregate the data by race?

Wolff:

The average African-American family has about 60 percent of the income as the average white family.

The average African-American family has only 18 percent of the wealth of the average white family.

Examining_Labels_Photo_by_John_Mudd_Cornell_University_1_t670

Now?…

Is poverty the result of laziness, lack of resources, or unethical systems?

In an article titled “Poll: Fewer Americans Blame Poverty on the Poor” by Seth Freed Wessler, Americans took a poll to determine the blame for poverty.

Two important conclusions:

“Leslie McCall, Ph.D., a political scientist at Northwestern University who studies inequality and public opinion, says that Americans have held on to 90s era stigma about family safety-net programs, while becoming more invested in opportunity-building policies.” Further, that, “Concerns about inequality, or poverty, are not associated with an increase in support for traditional forms of safety net like welfare,” McCall says. “But they do associate with increased support for spending in education, increased earnings for people at the bottom or the middle, and access to jobs. People look around and see that conditions are not a result of individuals, but of structural problems.”

Numbers Don’t Lie About Income Inequality

income inequalityEven though presidential elections are over a year away, politicians are enjoying a huge audience of (hopefully) voting citizens. One of the most important issues we face right now is income inequality. We must listen to both sides and select an individual who will address and set financial policy changes for the good of the people rather than the pockets of the “fat cats” residing within the proverbial one percent.

I struggle to understand how varied the messages are about achieving some sort of income balance because the rhetoric isn’t matching the facts.

FACT: “The Chief Executive Officers of the top 350 American corporations were paid 331 times more money than the average U.S. Worker. Those executives made an average of $11.7 million dollars compared to the average worker who earned $35,239.” That statistic is from April 15, 2013 – and the income inequality has risen steadily since then. Yet the tax rates (taxes paid by our citizens to the federal government) are astoundingly unequal: the richest one percent pays 5.6% in taxes while the average income earner (you!) pays about 13%.

Numbers don’t lie – income inequality “has turned the U.S. government into a protection racket for the wealthy.” And the wealthy, in turn, donate funds that support the politicians that write the laws that continue to give the wealthy and their large corporations’ financial breaks. Citizens must get smarter about money issues so that we can vote to reform the status quo. Income inequality is real – the rich are getting richer day after day, and they are quite content to keep it that way. It doesn’t matter which political party takes this ball and runs with it! My vote will be with the candidate that shows interest in making real changes for you and me.

Income-Inequality cartoon

By Signe Lambertsen

Is Life Just One Big Game of Monopoly?

Cries are heard from the nursery as the monopoly game of life begins to unfold. The players chose their pieces and equally align themselves on the “Go” space. They are ready to actively participate in the race for the American Dream.

Paul Piff created a social experiment to analyze the outcomes and consequences of the psychology of wealth. Piff conducted an experiment in which participants were to play Monopoly against one another — EXCEPT, this was in no way the average Monopoly game. Piff rigged the game to give one person an advantage while playing, and one person a disadvantage. The results were uncanny. Throughout the experiment, the advantaged player began acting with a sense of entitlement and narcissism as the fellow participant struggled to stay alive in the game.

Advantage Player      VS.      Disadvantaged Player

-Multiple Dice                                  -One Dice

– $200 at “Go”                                 -$100 at “Go”

-Got 2x the amount                     -Collects half the salary

of money at the start

Unfortunately, like Piff’s Monopoly game, the American Dream can NOT be achieved through hard work and the “tightening of the bootstraps.” The game has been rigged from the start, a predestined fate, as you will. I do not want to exclude those special cases where people have overcome poverty and made it to the top. Yet, when the statistical evidence overwhelming shows that 42 percent of children born into poverty will never get out, the facts just cannot be ignored.

Olivia C. Granja