Wealth inequality in the United States and How to Work Towards an Equal Economy

Wealth inequality in the united states has continually skyrocketed since the 80’s   and continues to have devastating effects on the low-income earners. The housing rules that keep the poor from certain states that have high education standards continue to wreak havoc in the country’s economy. The haves continue to enrich themselves widening the gulf between the rich and the poor. The sub economic segregation of people makes it impossible for the poor to move up the ladder leading to the disappearance of the middle class in the united states. The wealthy and the well-educated live in areas where the less privileged are cut off creating a clear distinction between the well-educated and less educated.

The most educated and affluent have moved into cities, and because of their innovative abilities, they can become more productive and create more wealth. That leads to high tech firms coming into the cities to take advantage of the available demand and resources. Subsequently, that pushes the price of land making it soar, and only the rich can afford the land. In cities like San Francisco, New York segregation and housing un-affordability for the low-income earners is an all-time high. The affluent and well educated live in high class and luxurious states which are surrounded by the sprawling low-income earners.

The continued widening of the gap between the affluent, well educated and the poor has led to the creation of political backlash and unending divisions. The recent slap of tariffs on Chinese goods led to the tumbling of the U.S stocks and is likely to spark trade wars and throttle the economic growth. The tariffs are imposed on Chinese goods that have the advantage over the U.S products, and this will again benefit the affluent as they own companies that manufacture products that are currently affected by the trade restrictions. That in effect continues to widen the gulf between the rich and the poor.

The philosophy of Georgism from Henry George offers a broader perspective on the poverty issue. George believes that poverty stems from the poor bearing the burden that otherwise the rich should take up. The poor pay rent, bank interest, and taxes on buying goods the same way the rich will do. George advocates for sharing any income earned from national resources equally among all the people. It’s imperative that one should only earn that which they have contributed to the economy and no one should be denied the right to use their wages fully. Private ownership of land and resources prohibits the unemployed and the poor from using the idle resources held by the rich to create wealth.

There is need to reduce and reverse the alarming class divide. The conversation across the income divide is inevitable and needs to begin. The theory of Physiocracy is one of the revolutionary ideas towards reduction of the gap between the rich and the poor. The new physiocrats believed in the order of nature without any government intervention. According to this theory the wealth of the nation is derived from land resources and the society is divided into classes of farmers, tenants, land owners and shopkeepers and artisans. They believed that each person can increase productivity and the prices of agricultural produce was fair allowing for stability of prices and restore the economy of the country. When the theory was applied in 17th century the economic laws prescribed removal of taxes that burdened the common citizen and fair pricing of the products even in times of scarcity. The theory though criticized for ignoring income from manufacturing sectors is one that ascribes to equal economic progress for anyone who puts in the effort. Complete freedom of trade will begin to create a sense of equality and reduce the wealth gap between the poor and the rich.

To fix the divide and wars arising out of the inequality it’s imperative to create more localized governments that allow the residents to utilize and maximize the resources around them. There is need to acknowledge the underlying issues and address them to reduce the widening rift between the rich and the poor. The government should look into the regressive tax system and establish strategies that will reduce the wealth disparity.

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