Running head: INCOME INEQUALITY 1 INCOME INEQUALITY 6 ADDRESSING INCOME INEQUALITY (Author’s Name) (Institutional Affiliation) Addressing Income Inequality For decades now, the wealth gap among United States citizens has increasingly become high. This has contributed to various social and economic problems such as inadequate employment, poverty, crime, and health issues (Dabla-Norris et al., 2015). Because of the wide array of challenges attributed to Income Inequality there is need for the society to come up with some solutions to address this issue. Even though there are many ways through which the society can narrow down this wealth gap, the policies chosen need to follow a multifaceted approach in order to come up with a permanent solution. Below are some of the policy alternatives that can be used to address the issue.Providing affordable, and quality education to the citizens According to Breen & Chung (2015), education is one of the major factors that accounts for income inequality among the people. The people who are well educated are more likely to earn better incomes than the people who are not educated. This is due to the fact that educated people have some skills which they can use to acquire full time employment with good salaries. Because of this reason education is arguably one of the best tools that can be used to eradicate income inequality in United States. Lack of education among some citizen in the United States is closely attributed to poverty. Statistics show that more than 1 out of every 5 children are living in poverty (Childfund, 2013). This means that a similar number of children don’t get good education because their parents can afford. Even if they access education it will likely be the basic primary and secondary education and they will never have the opportunity to get post-secondary education. Since most of the good jobs currently demand at least one to have post-secondary education it is important that we invest in providing access to affordable and quality education and encourage young people to go school. To provide affordable, and quality education the government should: · Build enough schools in all parts of the country that can accommodate everyone who needs education. · Ensure that the schools have enough resources needed to provide quality education. This include qualified teachers and learning materials · Subsidize the cost of education to ensure that the citizens can afford · Provide scholarships to low-income students to help them access higher education in-order to acquire the skills needed to secure jobs in the competitive market. Issues facing education in United States One of the greatest issue currently facing education in the us is the criticism of public schools. This has consequently led to decrease of funding of the schools. As these are the schools which most of the low-class people can afford, most of the students end up not getting quality education because the schoo ...

1. Running head: INCOME INEQUALITY 1
INCOME INEQUALITY 6
ADDRESSING INCOME INEQUALITY
(Author’s Name)
(Institutional Affiliation)
Addressing Income Inequality
For decades now, the wealth gap among United States citizens
has increasingly become high. This has contributed to various
social and economic problems such as inadequate employment,
poverty, crime, and health issues (Dabla-Norris et al., 2015).
Because of the wide array of challenges attributed to Income
Inequality there is need for the society to come up with some
solutions to address this issue. Even though there are many
ways through which the society can narrow down this wealth
gap, the policies chosen need to follow a multifaceted approach
in order to come up with a permanent solution. Below are some
of the policy alternatives that can be used to address the
issue.Providing affordable, and quality education to the citizens

2. According to Breen & Chung (2015), education is one of the
major factors that accounts for income inequality among the
people. The people who are well educated are more likely to
earn better incomes than the people who are not educated. This
is due to the fact that educated people have some skills which
they can use to acquire full time employment with good
salaries. Because of this reason education is arguably one of the
best tools that can be used to eradicate income inequality in
United States.
Lack of education among some citizen in the United States is
closely attributed to poverty. Statistics show that more than 1
out of every 5 children are living in poverty (Childfund, 2013).
This means that a similar number of children don’t get good
education because their parents can afford. Even if they access
education it will likely be the basic primary and secondary
education and they will never have the opportunity to get post-
secondary education. Since most of the good jobs currently
demand at least one to have post-secondary education it is
important that we invest in providing access to affordable and
quality education and encourage young people to go school.
To provide affordable, and quality education the government
should:
· Build enough schools in all parts of the country that can
accommodate everyone who needs education.
· Ensure that the schools have enough resources needed to
provide quality education. This include qualified teachers and
learning materials
· Subsidize the cost of education to ensure that the citizens can
afford
· Provide scholarships to low-income students to help them
access higher education in-order to acquire the skills needed to
secure jobs in the competitive market.
Issues facing education in United States
One of the greatest issue currently facing education in the us is
the criticism of public schools. This has consequently led to

3. decrease of funding of the schools. As these are the schools
which most of the low-class people can afford, most of the
students end up not getting quality education because the
schools are not well funded and lack resources needed to
provide good education. Other people assume that public
schools have incompetent teachers. Due to this reason graduates
from these schools face a hard time getting employment since
most employers assume they are a product of poor training
programs (Breen & Chung, 2015). Maintaining these
perceptions will continue hurting the education and young
generation who have potential to learn hence maintaining the
income inequality.
Taxing the rich
The tax system is a very essential tool in wealth redistribution.
A country which has a big percentage of its wealth belonging to
the hands of only a few people is likely to face challenges in
growing its economy. Over the years income taxes have been
seen as another tool of curbing income inequality. Even though
increasing taxes for higher income earners can affect the
economic growth of a country it can significantly lead to
declines in the income inequality. However, the increase in the
top-bracket tax rate need to be accompanied with some sensible
tax polies so that it does aggravate problems in the tax system
(Kumhof et al., 2015).
How to ensure that the rich are fairly taxed
Even though most of the times rich people most of the times
find legal and illegals ways to avoid paying taxes, a progressive
tax system is likely to reduce the wealth gap between the rich
and the poor. To ensure that families don’t remain wealthy for
generations, a country should impose high estate taxes so that
rich people don’t pass their wealth to their children. Another
way to ensure that the inheritances are fairly taxed is make sure
that rich people don’t own their assets until they die. Increasing
the minimum wage

4. Raising the federal minimum wage can significantly help reduce
the income inequality. On the other end it could help the value
of the minimum wage which has only risen from $5.15 to $7
since 2007 (Brainerd,2018).
But how can how can it reduce income inequality?
Currently, the gap between low-wage and the middle-wage
workers wages is quite big. In this case if the minimum wage is
raised it will make some progress in reducing the gap. If the
current minimum wage is raised it can increase the pay of more
than 1.6 million and many more who currently earn less than the
minimum wage. Most of the low-income families end up
attending low income schools because they cannot afford to pay
the private ones. This puts students from such families at first
risk because the low-income schools don’t have enough funding
to provide the facilities needed to give quality education.
Evidently, the minimum wage is an important matter that need
to be addressed not only to appease income inequality but also
to improve the people standards of living (Sabia & Burkhauser,
2010).
The people who oppose increase of the minimum wage argue
that increasing it will place a burden to employers especially
the ones with small companies which will in return lead to
slower growth rates of their business due to low returns. They
add to say that if the companies make small returns they are
likely to retrench their employees leading to unemployment. On
the other hand, the ones who advocate for its increase say that
the current minimum wage doesn’t match the rate of inflation.
Opinions from both sides have some economical implications
but the later carries the day since studies have shown that
increase in minimum wage have little impact on
unemployment(Schmitt,2013).
References
Brainerd, J. (2018, February 1). STATE MINIMUM WAGES |

5. 2018 MINIMUM WAGE BY STATE. Retrieved February 14,
2018, from http://www.ncsl.org/research/labor-and-
employment/state-minimum-wage-chart.aspx
Breen, R., & Chung, I. (2015). Income Inequality and
Education. Sociological Science, 2.
Childfund (2013, April 11). Statistics on Poverty and Education
in the United States. Retrieved February 14, 2018, from
https://www.childfund.org/Content/NewsDetail/2147489206/
Dabla-Norris, M. E., Kochhar, M. K., Suphaphiphat, M. N.,
Ricka, M. F., & Tsounta, E. (2015). Causes and consequences of
income inequality: A global perspective. International Monetary
Fund.
Kumhof, M., Rancière, R., & Winant, P. (2015). Inequality,
leverage, and crises. American Economic Review, 105(3), 1217-
45.
Meer, J., & West, J. (2015). Effects of the minimum wage on
employment dynamics. Journal of Human Resources.
Sabia, J. J., & Burkhauser, R. V. (2010). Minimum wages and
poverty: will a $9.50 Federal minimum wage really help the
working poor?. Southern Economic Journal, 76(3), 592-623.
Schmitt, J. (2013). Why does the minimum wage have no
discernible effect on employment?. Center for Economic and
Policy Research, 22, 1-28.
Running head: INCOME INEQUALITY
1
INCOME INEQUALITY 7

6. Income Inequality
(Author’s Name)
(Institutional Affiliation)
Income Inequality is a Problem
Why Income Inequality is a Problem
Income inequality is the magnitude of uneven distribution
in a population. United States has experienced widening income
inequality in the recent times if you consider that the number of
Americans living in poverty increased by 15 % between 2000
and 2006 (Saez & Zucman, 2016). Furthermore, in 2012, the
income of the 1% in the United States was 22.83% reflecting
the widest income inequality gap since the economic depression
of the 1920s (Chetty et al., 2014).
Figure 1 illustrates the increasing percentage earnings for the
top 10% and the declining percentage earnings for the middle
class and the poor. In 1970, the 50% at the bottom earned 19%
of the total income, but in 2014, they made only 10 % of the
total income reflecting a sharp decline of 9%.In contrast, the
top 10% earned 47% of the total income earned in 2014
compared to 31% in 1970 depicting an increase of 16%.This
situation seems to have accelerated as illustrated in Figure 2
since the share of US income that went to the top 10% had risen
from 47% to 52% depicting the ugly picture of deteriorating
income inequality in the United States. Therefore, the claim that
income inequality is a problem in the United States is well
substantiated and the sooner this problem is addressed, the
better for the middle class and the low-income families.
Possible reasons for the widening income disparity include
technological advancements which have replaced relatively
unskilled workers while rewarding highly skilled employees
(Chetty et al., 2014). Also, globalization has enabled many
corporations in the country to outsource labor from places like
China where the cost of labor is lower than in the United States
(Saez & Zucman, 2016). Also, the declining political power of

7. the working class means that they do not have a say in the
policy-making hence their interests are not taken into account in
the law-making process. Finally, the declining value of the
minimum wage means that the low-income earners cannot
maintain the same standard of living they had in 2009 when the
minimum wage was last reviewed (Tsui, Enderle & Jiang,
2017).
Figure 1: Comparison of Percentage of Share of Total Income
Earned by Different Classes Between 1970 and 2014
Retrieved from:
https://www2.deloitte.com/content/dam/insights/us/articles/3313
_IBTN_income-inequality-
infographic/figures/3313_infographic.png
The figure illustrates the ever-increasing disparity between
the rich, the middle class and the poor. Whereas the poor earned
19% of the total income in 1970, this percentage had declined to
10% in 2014.In sharp contrast, the percentage share of the top
1% had increased by 16 % from 31% in 1970 to 47 % in 2014.
Figure 2: Share of Income that Went to the top 10% in the
United States Between 1915 and 2015

8. Retrieved from: https://www.gannett-cdn.com/-mm-
/077f418268d5b72919dda63323402bc5f90498c9/c=14-0-567-
415&r=x408&c=540x405/local/-
/media/2017/12/04/USATODAY/usatsports/income-
inequality_large.PNG
The figure above illustrates that from the 1970’s the
income disparity in the United States has become more
pronounced reaching a peak in 2015 when the top 10% earned
52% of the total income in the United States.Possible
Opposition to the Problem Definition
While most people are likely to agree that income
inequality is a problem worth solving, conservatives might not
share this ideology and they may hold that income inequality is
not a problem, and as such, it is not worth solving. The main
argument that conservatives are likely to the front is that
inequality is a natural part of free markets (Goda, Onaran, &
Stockhammer, 2017). The United States is a meritocratic society
meaning that people earn money according to the amount of
hard work they put. For this reason, opponents to the notion that
income inequality is a problem might argue that a free market is
based on the idea that innovation and hard work should be
rewarded and therefore, trying to fix income inequality will
discourage innovation and entrepreneurial spirit (Helpman et
al., 2017). Also, using the free market argument, opponents to
the income inequality problem might hold that if people believe
that their investments and income would not lead to a
significant change in their incomes, their motivation to innovate
and invest will decrease (Chetty et al., 2014). This argument is
likely to win hearts since the entire US economy is built on
innovation and hard work and therefore suggesting that fixing
income inequality might remove this admirable aspect of the US
economy will make many citizens and policymakers to have a
second thought. Why Taxpayer Money and Money should be
Dedicated to Solve Income Inequality

9. Dedicating time and money to address income inequality is
essential for several reasons. To start with, reducing income
inequality will boost shared prosperity so that the rich, the
middle class and the poor have equal access to quality amenities
such as health and education opportunities. Shared prosperity
will mean that people from all social classes can reap the
benefits of globalization and technological advancement (Rudra
& Tobin, 2017). As it stands, the poor and the middle class have
seen the ugly face of globalization as companies source for
cheap labor in emerging economies. Secondly, a reduction in
income inequality is a vital ingredient to a healthy democracy.
Notably, extreme inequality can trigger political turmoil where
the majority poor rise against the minority rich thus tearing a
country apart (Goda et al., 2017). The idea of populism
champions the regular people and challenges them to take
control over the governing of their country instead of leaving it
in the power of few elites. Populism is likely to make a country
ungovernable since the everyday people feel that they have been
disenfranchised for eons and hence the need to take control of
their economic, political and social destinies. Furthermore,
reducing income disparity will promote faster economic growth
since it leads to a reduction in government welfare spending
hence more money can be used in developmental projects such
as improving the state of roads and investing in education
(Mueller, Ouimet & Simintzi, 2017). Besides, since wealthy
people spend less of their income than poor people, putting
more money in the hands of the poor and middle class will
accelerate economic growth. Thus, it is worth committing time
and resources to address income inequality since this will
contribute to shared prosperity, healthier democracy and spur
economic growth.

10. References
Chetty, R., Hendren, N., Kline, P., Saez, E., & Turner, N.
(2014). Is the United States still a land of opportunity? Recent
trends in intergenerational mobility. The American Economic
Review, 104(5), 141-147.
Goda, T., Onaran, Ö., & Stockhammer, E. (2017). Income
inequality and wealth concentration in the recent crisis.
Development and Change, 48(1), 3-27.
Helpman, E., Itskhoki, O., Muendler, M. A., & Redding, S. J.
(2017). Trade and inequality: From theory to estimation. The
Review of Economic Studies, 84(1), 357-405.
Mueller, H. M., Ouimet, P. P., & Simintzi, E. (2017). Wage
inequality and firm growth. American Economic Review,
107(5), 379-83.
Rudra, N., & Tobin, J. (2017). When Does Globalization Help
the Poor?. Annual Review of Political Science, 20, 287-307.
Saez, E., & Zucman, G. (2016). Wealth inequality in the United
States since 1913: Evidence from capitalized income tax data.
The Quarterly Journal of Economics, 131(2), 519-578.
Tsui, A., Enderle, G., & Jiang, K. (2017). Income Inequality In
The United States: Reflections On The Role of Corporations.
Academy of Management Review, amr-2016.