America Has to Face Its Income Inequality Problem

Income inequality has been a problem in society since humans first started to assign value to stuff. Today, it’s just as much a societal issue as it’s always been. From the Black Friday controversies and the recent fast food protests to the need for Obamacare or just the simple unfortunate every day life of millions of un- and under-employed, America has an income inequality problem that’s coming to a head.

There’s an important distinction between income inequality and poverty: when we say “income inequality is growing,” we are not saying that poverty is on the rise, but that the gap between the poor and the rich is getting bigger and bigger. “The rich get richer,” as they say.

President Obama has addressed the issue, noting that income inequality is growing and will be one of the great problems of the decade. He suggested an increased minimum wage and other preventive measures. In an ideal world, the minimum wage would be enough to raise a family on – and maybe, just maybe, have it so a tiny portion of the country doesn’t control a great portion of the wealth. That would be great, but this is a very complicated issue. You can’t just say, “Give low-income workers more money,” because that money has to come from somewhere, be it passed on to the consumer or siphoned from the coffers of a greedy executive.

Take Wal-Mart, for example. Wal-Mart exploits their workers in America and overseas. It’s terrible, but there are many families all over America who rely on being able to get cheap things at Wal-Mart, rely on cheap shopping and cheap labor to feed their families. Presumably raising employee pay would raise prices, right? Wrong. Many argue that Wal-Mart could raise employee wages by up to 50% without raising prices.

But minimum wage is again complicated by small business. Why should someone who owns a diner in Milwaukee have to pay her employees minimum wage if she’s bringing home less than minimum wage in her duties as owner and manager? That doesn’t seem fair.

Is it fair that people who are working the truly backbreaking jobs are making significantly less than people in offices who burn time all day (not saying that’s true of all executive positions, but it’s true of many)? If it’s not fair, is there anything that can be done about it? Something that has to be understood about ‘easy’ high-level jobs is that they require lots more experience and training to get, so the high-pay is diffused over all the time you spent training. Conversely, it’s privilege that determines the ability to get that experience in the first place.

If we lived in an ideal world, one without accountants trained to find every loophole, I’d suggest a system whereby low-level employees made a minimum wage based on the salary of the highest paid employee at the organization. This is impossible in our current system, unfortunately.

We will never end poverty in America. I know that sounds like a horrible thing to say, but it’s true. Individuals can can escape poverty, but poverty will always exist because of relativity. All we can really hope for is shrinking income inequality, lower cost of living, a living wage for all.

Discuss in the comments: what do you think are the solutions to income inequality in America? Is it fair that some struggle while others live extravagantly? Did those with extravagant lives earn it? Do you have any personal stories about income inequality?

Image via ShutterStock

Filed Under