Why has the gap between the rich and the rest of us increased steadily in the last thirty years?
Some studies, such as Controversies about the Rise of American Inequality: A Survey by Robert J. Gordon and Ian Drew-Becker, list a number of reasons. These can include a decline of unionization, disparities in the growth of price indexes and in life expectancy between the rich and poor, investment opportunities among the rich, cheap foreign labor, and corporate exploitation.
However, there are innumerable factors that come into play, from both governmental and societal sources. The real question is: what are the main factors that have increased such unprecedented inequality.Result of Inequality
As a country, in the last thirty years, we have moved toward less manufacturing and productivity and to greater inequality and economic decline. We have also witnessed the decline of labor unions, the only large institution that represents working and middle class people against the lobbyists, lawyers and consultants of the money class.
The victims of this inescapable misfortune are the common people, the masses who find it difficult to find good-paying jobs. Certainly centuries-old stagnation has disappeared and our economic model has engineered great wealth for Americans, but wealth not for the majority but a tiny minority. In good times, few people questioned the America model of free enterprise and free markets, despite the fact we were producing fewer things and our recent wealth was based on financial engineering and excessive consumerism which has driven us into massive debt…
We are destined to an uncertain future, very different from projections of unlimited power and wealth that characterized speeches of our presidents and pundits from the Wilson era to the Reagan and Bus II era. President Obama inherited a misguided free-marker system, with minimal transparency and restraint, and attempted to redefine American capitalism. He is not only trying to create a more intrusive government as a counter weight to market forces, by he is also attempting to represent the needs of working people and the middle class.
-Allan Ornstein, Wealth vs Work: How 1% Victimizes 99%
Why should we care?
Inequality, some may argue, is merely an inherent result of capitalist economies. However, inequality now is the highest it has been since the Great Depression, according to many studies. Historically, this bodes badly for business. Evidence of this is the drop in the Black Friday weekend spending by nearly 11% this past Fall, according to TIME Magazine.
More obvious, rising inequality is bad for society. In the book Ill Fares the Land by Tony Judt, he wrote, “There has been a collapse in inter-generational mobility: in contrast to their parents and grandparents, children today in the UK as in the US have very little expectation of improving upon the condition in which they were born.”
In today’s world, unless you are born rich, extraordinarily lucky, or graduate from an Ivy League college, your hopes of social mobility are far slimmer than they were 30 years ago.
I see this as the decline of the American dream…As you read this blog, what do you think are the main factors that have induced this unprecedented growth of inequality? Does social mobility still exist in your view?