You may have heard the catch phrase “the rich get richer and the poor get poorer,” but have you ever stopped to ask yourself what that really means? Income inequality, as defined by Investopedia it is “The unequal distribution of household or individual income across the various participants in an economy. Income inequality is often presented as the percentage of income to a percentage of population,” (Income Inequality). If income inequality is allowed to continue its growth unchecked, the working and lower class citizens will continue to experience declines in physical and mental health, the United States Economy will be stifled, and create other inequalities.
Robert H. Frank recently wrote an article for the New York Times discussing this issue, titled “Income Inequality: Too Big to Ignore” (Frank). In brief, his view is that the rising inequality in the United States bares a cost that far outweighs the benefits.
Robert Frank begins by summarizing how the economy was blossoming in the three decades after WWII, incomes rose about three percent a year across all income levels, roads were well maintained, and new infrastructures were built. However the last three decades the economy grows much more slowly and our infrastructure has fallen into disrepair (Frank 580). Frank states the most troubling fact is income growth is not rising in comparison to the rate inflation. Inflation is the buying power of the dollar measured over time. The inflation rate for the United States from 2003 – 2013 was 26.6%, (Current U.S. Inflation Rates: 2003-2013); whereas the average household income only rose 1.6% (Household Income in the United States).Is this a matter for economists or philosophers to resolve? It seems that there are professionals…
…ore.” Gerlad Graff, Cathy Birkenstein, Russel Durst. They Say, I say. New York: W.W. Norton& Company, Inc., 2012. 580-585.
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Wolff, Edward N. Recent Trends in Household Wealth in the United States: Rising Debt and the Middle Class Squeeze. Working Paper Collection. Annandale-on-Hudson: Levy Economics Institute of Bard College, 2010.