Inequality of income is greater in the United States than in other capitalist countries.

What do you
think explains this? Is there something unjust about extreme inequality?

Inequality in income has continued to grow in the United States, I think that there are many reasons
why this is greater in the United States than other capitalist countries. The top income earners have
seen higher income increases while the bottom income earners have seen little to no income increases.
Those individuals that earn the highest incomes not only make more with their wages and salaries but
earn additional income with their ability to make more investments and savings or rental properties
they are able to purchase that the bottom income earners are unable to. Additionally, variances in
income taxes, lack of increase in lower wage positions, increasing wage gaps between CEO’s and
employees, decrease in union membership and more competition from other countries.

The top income earners, while taxed at a higher rate, their tax burden ends up being less than the low-
income earners. One study found that “in 2018, the average effective tax rate paid by the richest 400
families in the country was 23 percent, a full percentage point lower than the 24.2 percent rate paid by
the bottom half of American households” (Ingraham, The Washington Post). Those low-income earners
are also facing little to no increase in wages while those top wage earners have seen double- and triple-
digit percentage increases in their salaries. In 2018, one source reported that “restaurant servers
haven’t gotten a raise in 29 years” (Inequality.org). Federal minimum wage has not been increased since
2009. The site also notes that the gap between CEO salaries and their worker’s salaries has grown
significantly and is “almost 9 times as large as it was in 1980” (Inequality.org). Unions and their
memberships have also been on the decline in the United States since the 1950’s. Unions have had an
increasingly difficult time in convincing employees to join their unions, the job landscapes have changed
and more states have implemented right to work laws. More and more countries have improved their
economic position and ability to compete in the global market. As companies in the United States face
more competition, they have been forced to move the higher paying manufacturing jobs overseas to
remain competitive. This results in lost jobs for employees and those employees have been forced to
take lower paying jobs.

I think that there are some aspects of income inequality that are an unfortunate part of a business
needing to be competitive to stay in business or that are products of our current economic environment
such as the decline in labor unions or increased competition in the global market. However, I think that
the extreme income inequalities from the income taxes, the gap in CEO/worker wages and lack of
increase in low-income positions is unjust. The CEO’s and top income earners have continued to grow
and improve their personal situations while the largest portion of the population is struggling to make a
living and residing at or below the poverty level. Those at the top are getting significant raises year after
year and watching as the employees that keep their organization running get little to no raise each year.

Works Cited:

Ingraham, Christopher. “For the first time in history, U.S. billionaires paid a lower tax rate than the
working class last year”. (8 Oct 2019). Retrieved 9 September 2020, from
https://www.washingtonpost.com/business/2019/10/08/first-time-history-us-billionaires-paid-lower-
tax-rate-than-working-class-last-year/

Income Inequality - Inequality.org. (2020). Retrieved 9 September 2020, from

https://inequality.org/facts/income-inequality/
The True Cause of Income Inequality in America. (2020). Retrieved 10 September 2020, from
https://www.thebalance.com/income-inequality-in-america-3306190