Topic Introduction: Income Inequality
Income and wealth inequality are at the worst recorded levels in the United States. The effects of rampant inequality are widespread and severe.
Income inequality has been my pet issue for as long as I can remember. I presented on this topic during my senior year of high school. Although I was afraid of public speaking then, I went over the minimum time for the assignment due to the passion I felt once I started talking about it. The intense emotions I feel toward this issue are part of my core ideology of politics: many social issues and other challenges we face are downstream from a rigged economy executed by large corporate entities and economic elites. Income inequality is the centerpiece of this rigged system; large corporations rely on their workforce as the centerpiece of their operations and treat them as poorly as the law allows (and sometimes beyond that). Endless corporate lobbying has made unions all but extinct compared to their prevalence 40 years ago; hard-won workers’ rights have been lost, and millions of Americans working 40 hours a week (or more) can no longer afford necessities like food and rent.
Modern income inequality began with Ronald Reagan; his union-busting policies and significant tax cuts for the wealthy destroyed years of progress from progressive policies implemented by presidents like FDR. Reagan’s aversion to unions and distaste for political attempts to protect less prosperous citizens from market changes hurt lower and middle-income people through and beyond his two terms. This was largely intentional to benefit Reagan’s affluent base that wanted higher profits and cheaper labor. When Reagan became president -- and began to cut taxes -- the federal deficit was 2.5 percent of the national economy. When he left eight years later, the deficit was 5 percent of the economy. Interest payments on the debt jumped to $169 billion in 1988 from $69 billion in 1981. We are still paying for the consequences of these decisions today. Graphs make this message much more apparent. Take a look at family income inequality and union recognition elections/victories on Reagan’s watch.
We can see these trends continue in the years after Reagan, through his successor Bush and then through Clinton’s years, albeit more slowly. By the time Bush Jr. came into power, “Reaganomics,” commonly referred to as trickle-down economics, was mainstream in the Republican party. Bush Jr. continued to cut taxes for the wealthy, deregulated Wall Street, and increased military spending, which would be major contributors to toppling the United States housing market and the global economy in 2008. Anti-worker policies have not only robbed future generations of the American dream they were promised but continue to have a detrimental effect on millions of people, perpetuating poverty.
Take the current national minimum wage of an insulting $7.25 an hour. Most people would be better off not working and collecting unemployment than working for that amount (we saw this increasingly during Covid with enhanced benefits). Despite rising productivity from workers, corporate interest groups and powerful economic elites have maintained an insultingly low minimum wage. If the minimum wage did rise in step with productivity growth since 1968, it would be almost $21.50 an hour. The increase in productivity from workers has benefited the top 1% of earners greatly, which has seen their income rise: the top 1.0% of earners saw wages up 179% since 1979, while share of wages for bottom 90% hit a new low in 2020. These two points alone slam the door on any arguments that A. Trickle-down economics work and B. We cannot afford to raise the minimum wage. If we could not afford to raise the minimum wage, then we should not be able to afford tax cuts for the wealthy under Reagan, Bush, Clinton, Bush Jr., and Trump. These tax cuts for the wealthy have gained widespread support from conservatives, which leads me to my next point.
Right-wing economic elites and the most powerful people in this country have tricked those that suffer the most under their policies into supporting them. I encourage everyone to read “What’s the matter with Kansas?” by Thomas Frank, which gives a great understanding of how elitist conservatives captured the hearts of mid-western voters, convinced them to vote against their own interests, and sucked their resources dry. Today, in midwestern and southern states, many of the poorest states in the modern day are overwhelmingly reliant on federal aid from affluent blue states. As demonstrated in Pew research studies, even simple benefits for the poor are opposed by conservatives. Below is one conducted in 2017 on opinions regarding raising the minimum wage:
Trump supporters strongly oppose raising the minimum wage despite directly receiving benefits from such a change. The concept that anything government regulates will be drastically worse is also an element in this grand deception. Conservative politicians demonized the one body with enough power to challenge corporations and caused their supporters to be hostile towards any government action that would combat rampant corporate corruption and greed. As long as these trends of inaction continue, income and wealth inequality will continue to rise with no end in sight. As of 2021, the top 1% of Americans had about sixteen times the wealth of the bottom 50% of Americans.
TLDR This is a quick introduction to modern income and wealth inequality in the United States. How it came about, why nothing is being done about it and what the disparity looks like today.