I, like many, was shocked when I saw the Capital insurrection on January 6th. Looking behind the anger and discontent, there is a group of American citizens who feel left out by the current economic situation. Controlled by media forces, these people have succumbed to the usual populist tropes, blaming the immigrant for the problems, failing to look at the systemic economic forces in play. Given these events, income inequality is perhaps the most relevant issue in the United States at this time.
Since the 2008 financial crisis, income inequality has been on a steady climb. In 1970, America's top 1% earned about 9% of all national income. Today that number is almost 20%. Meanwhile, less than half of Americans own stocks or mutual funds outside of their retirement accounts. Profits of large corporations are at record highs, yet the people who actually do the work of these companies within the United States receive little to none of that wealth. Many of our politicians refuse to speak about this issue and often give lip service to "wealth creators" (those who own capital) while ignoring the workers (who create value).
We must address this issue through higher wages, better working conditions, and more equitable distribution of profits. On a basic level, Americans deserve to have livable wages for their work. Nobody who works 40 hours or more per week should have to live in poverty. Workers in the United States (who are often members of unions) receive high wages, benefits, and retirement packages because they have organized to demand these things. If we want this trend of compensation and outrage to change, we must advocate and support the working person, creating pathways to full participation in the economy.
Are the Rich are Getting Richer and The Poor Poorer?
It is a standard bit of rhetoric that the wealthy are getting wealthier while the poor are getting poorer. This has proven to be true in recent decades, with income inequality on the rise since 2008. According to University of California Berkeley Professor Emmanuel Saez, cited by MarketWatch, "From 2009-2012 aggregate real incomes ... have increased by 4.6% ... but the gains have been very uneven as illustrated by the fact that while total real incomes of the bottom 99% have increased by 0.8%, those of the top 1% have increased a spectacular 41.8%." This is an issue that must be addressed to ensure a just and equitable society where all citizens can realize their potential.
It seems like a simple question: if someone works hard for their money, and creates wealth, shouldn't they be fairly compensated? Why shouldn't those who work be rewarded too? In a capitalist society, one that prides itself on rewarding hard work and initiative, these are critical questions to ask. However, If we fail to address income inequality, we leave many of our citizens unable to find success in the system. I believe in capitalism. I'm not anti-wealth. But it is incumbent on the wealthy to center the needs of the workers who are helping them acquire wealth. COVID-19 has made the situation even worse. While those at the top continue to benefit, those at the bottom see their opportunities diminish and their pay stagnate.
The recent events in Capital have brought much-needed attention to income inequality and its role in the United States. Though many blame immigrants for this issue, it is much more systemic than that. While middle and working-class wages stagnate, the rich continue to grow richer. Unless we, through the voluntary reinvestment in the worker or a more aggressive and progressive tax system, will see more protests and violence in response. The government and the market must take action to ensure that all citizens have equal opportunities for success in their lives. Failure to do so may result in the implosion of the freedoms and stability that have made our county strong.
