Punishing the exploited: An exploration of the growing wealth gap

We must find momentum through our discontent, and be “outraged enough to become even more politically active.”

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The wealth gap in America has been growing year on year for the past 30 years. Half of all Americans are living paycheck to paycheck and 92 million are living uninsured or underinsured. 11.4% of Americans (37.2 million) live below the poverty line. Census data shows more people are working multiple jobs as the federal minimum wage remains stalled at $7.25, while the cost of living requires an hourly salary of around $16.25 (for a family of four) — a single mother of two earning the minimum wage would need to work 138 per week just to earn a liveable amount. 

Wealth inequality is also intersectional. Data from the U.S. Census Bureau indicates that “those with lower levels of education, who are not married, nonwhite, and who are women and younger are more likely to face poverty in their lifetimes.” This means that our most vulnerable and marginalized citizens are also the folks most likely to live in poverty. 

Americans who do live in poverty are brutally punished by under-scrutinized food regulations, embarrassingly poor education standards, and healthcare costs premised on profitability. 

Recent research has found that those in poverty live on lower-quality foods that are highly processed, sugar-rich, and are associated with physical and cognitive health issues. Those living in poverty also receive a lower standard of education—funding records find 45% of schools in areas of poverty receive less funding than typical schools in the same area. 

The U.S.’s poor health care standards are exacerbated for folks living below the poverty line, as studies find a negative feedback loop between poor health and lower income.  

At some point, statistics and studies become overwhelming and lead to an attitude of fatalism. But the point is clear: if you want to live in a nation that cherishes the democratic values of the American Dream, you can either move to a different country or do something about it. 

How Did We Get Here?

Wealth in America is cyclical. That means that, under current economic conditions, the strongest predictor of poverty is the family you are born into, and the best way to create wealth in America is to have pre-existing wealth. Dynastic families have seen their value grow at 10 times the rate of ordinary families as inherited wealth allows people to live easy while their money provides little social value.

But it hasn’t always been this way. The period that many refer to as the golden age of American capitalism was largely defined by a 40 year period (1950-1990) where the bottom 50% of earners in the USA earned a larger share of pre-tax income than the top 1%.

In 2021, those figures are nearly flipped, with the bottom 50% earning 13.3% of all national income and the top 1% earning 18.8%. Census data also finds that fewer people are financially independent in 2021 than in 1980 — just 24% of adults are financially independent by 22, compared to 32% 40 years ago.

Analysis from the Pew Research Center reports that increasing economic inequality is tied to factors like “technological change, globalization, the decline of unions and the eroding value of the minimum wage”. Together, these factors have caused a dramatic shift in wealth distribution which, as previously shown, punishes those living in poverty across all demographics. 

Americans cannot continue to live in a nation afflicted by cognitive dissonance at every level of decision-making. Either the Statue of Liberty should be replaced with a shining statue of Jeff Bezos, or Americans must enact political change and do right by working-class Americans. 

Getting to the Ideological Root

The currently proposed Democrat budget represents a spark of hope for poor Americans. It targets the structural issues that, in the words of Bernie Sanders, “have plagued working families for decades”. Here’s a quick rundown: 

  • The bill targets healthcare, housing, childhood care, and education inequalities. 
  • The bill invests hundreds of billions of dollars into subsidizing Pre-K education and aims to half childhood poverty rates across the nation. 
  • The bill also takes aim at homelessness and attempts to slow the ever-rising cost of housing.
  • The legislation included in the bill will improve access to medicare for seniors, and increase access to home health care. 
  • The proposed spending will improve young people’s ability to educate themselves by increasing the number of Pell grants distributed across the nation and by making community colleges tuition-free. 
  • The proposed legislation aims to take the issue of climate change seriously by investing hundreds of billions of dollars into sustainable energy sources and research. 

For those concerned with income inequality in America, the proposed Democrat budget ticks many boxes. It takes direct aim at the causes of income inequality and seeks to mitigate at least some of the punishment felt by those living below the poverty line. Of course, Americans can support the bill by using their right to vote tactfully and can always donate to campaigns, but we mustn’t forget that there is an ideological root at the core of wealth inequality.  

Ultimately, that ideological core means we need leaders who can leverage their ideas within the larger framework of the American political imagination. This means that to reduce the wealth gap and make a more habitable, equitable nation, concerned Americans must engage one another in activism at all levels. 

Or, in the words of Robert Reich, we must find momentum through our discontent, and be “outraged enough to become even more politically active.” With this in mind, we must be hopeful that the proposed bill passes. 

Regardless of the outcome, concerned Americans must remain conscious of the real challenge: shifting the conversations we have about politics, so future voters make it clear to policymakers that they will not accept legislation that punishes the poor and fuels economic inequality.

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