Other Factors Causing Income Inequality to

Widen
Although education is important for employment and economic growth, it is not the only
factor influencing income inequality. Such factors as global integration, technological
transformation, “the decline of unions and the eroding value of the minimum wage” lead to
the rise in economic inequality (Horowitz et al., 2020, para. 9). Thus, rising trade relationships
between the U.S. and China, or other countries, has augmented the quantity of imported
products and decreased the number of job positions in manufacturing that produced similar
products in the USA (Baranoff, 2015). People order goods from China since they are much
cheaper there than in the U.S., and the economy suffers. Consequently, those who produce
these things in America lose their occupations, and income disparity widens.

Offshoring is another factor causing income inequality to grow. Thus, offshoring leads to
declining employment and wage growth and reduces participation in the labor force
(Baranoff, 2015). Moreover, offshoring is a threat to domestic production because it
negatively affects the choice of location where the company wants to produce its goods.
According to Jeon and Kwon (2019), a firm aimed to maximize its profits will choose the area
“that will generate a higher profit” (p. 11). As a result, unskilled domestic workers will be
threatened because the firm can reduce their wages and produce goods in another country.

One more factor influencing income inequality is governmental regulations. The government
of the United States created such a framework that led to the rise of inequality. Thus, de-
unionization, deregulation, “tax changes, federal monetary policies, ‘the shareholder
revolution,’” and many other policies caused the reduction of wages and unemployment
(Baranoff, 2015, para. 6). Over the last four decades, the number of labor unions has dropped
by half, and now it is only 10% of all workers (Harwood, 2019). The decline of organized
labor decreased workers’ chances to demand higher wages and other benefits. The minimum
wage per hour has not been changed, and the government made nothing to influence this
change. As a result, the buying power of those workers who earn minimum wage declined
while income inequality continued to grow.

What is more, those who have more money often break the rules, thus generating inequality
among the population. For example, economic winners have access to political power, and
they reward themselves with different policies, such as the GOP 2017 tax cut (Harwood,
2019). Children of wealthy people have access to the best colleges and private institutions.
Moreover, those with money can buy advantages almost everywhere, which causes inequality
to widen. All these factors stimulate the growth of the disparity gap between educated and
uneducated employees.