Expanding income distance in U.S. makes healing tough

America’s revenue distance disparity proceeds to expand at breakneck pace. As a Washington Post op-ed piece by Steven Pearlstein argues, such inequality is making the economic recovery a difficult task. Pearlstein argues the Republican method of dealing with the disparity has been to ignore the issue, and the current administration appears to be using the same playbook.

Income gap not included in GOP ‘Pledge to America’

The U.S. income gap has gotten much larger. If we want to view just a little better, we can take a look at 1976. Then, a 3rd of income went to the upper crustal 3rd of revenue went to the upper crust back then There was a better layout how much income had been going to the top dogs. The upper crust had been getting about a 3rd of the income. The 15 years leading to 2007 show something very different. Top earning households ended up getting about 50 percent of income instead. And now seems like that “virtually all of the benefits of economical growth have gone to households that, in today’s terms, earn more than $110,000 a year.” This is what Pearlstein points out.

When did the distance begin?

There are numerous possible suspects to blame for income inequality within the United States. Globalization might be one thing to blame. This is because workers, good and money are now outside of the country instead of within. Another could be that educated workers are wanted more now. Pearlman also claims other “institutional changes” could be the declining unions, industry deregulation or even the rising power of financial markets. American society has decided an inequality in wages like this is just fine. That is what Pearlman’s real opinion is on the whole thing.

Need to keep the balance maintained

If there is too high an index of inequality (or too low), America’s economic growth and ability to compete on the global stage becomes apparent. Wall Street probably does not mind the gap so much since there’s a lot of cash there. Of course, everyday families living off paydayloans for survival are probably not as happy about it. In order to live as one of these families, the only way to keep up the lifestyle is to get into debt. There’s a lot of debt to prove this point although Pearlstein does not think that families had to get into the debt.

Pearlstein is just one of those people who thinks the government needs to get less involved. There has to be some kind of change. This is only if changing the distance is significant to people. “People do not work hard, take risks, and make sacrifices if they think the rewards will all flow to others.”

Citations

Washington Post

washingtonpost.com/wp-dyn/content/article/2010/10/05/AR2010100505535.html