Holloway 1

Ashleigh Holloway

Mrs. Kenly

British Literature

27 April 2018

The Crisis of Economic Inequality

The one percent richest individuals own about half of the United States’ wealth, and with

the rise of a loss in faith for the American ideal, this issue of economic inequality is becoming a

global phenomenon. Though it’s not just the economy and it’s growing gap between the rich and

poor that’s turning heads, but rather what this means for democracy in a whole on both a national

and global scale. It’s not shocking about how corrupt the inner folds and functions of society is.

It’s not even menacing in the case that this has been this way for almost half of the initial time

the United States had been formed. In the spur of the twenty-first century, almost about

everything is a crisis ready to be debated with pitchforks and all, but for economic inequality,

that concept seems to lack relevance, even though it has everything to do with a nation’s health.

Most individuals can state that they don’t even know just how threatening this growing rise of

economic inequality can be, and how it’s lurking right under their noses. But where should one

even begin to look to understand how deep this issue runs, and how long will it last before it eats

us whole? Though America has settled itself with the idea of being the land of opportunity on an

economic scale, with the plague of ethical transgression, inadequate education, and a

fundamental lack of humility for others the United States is digging an early grave for itself.

Therefore, America must reassess on a fundamental level of what type of nation it wants to be in

order to improve economic inequality.

 Holloway 2

In order too begin to understand this topic, we must first understand exactly what is economic

inequality. Economic inequality has a range of subcategories that creates its formal definition;

the main ones being income, pay, and wealth. By definition, each of these simply means that the

distribution of either income, wealth, and/or pay is uneven among a group of individuals or

people. This can cater to small businesses, large corporations, or even whole entire countries.

The United States is one of the leading countries in the leading front of economic inequality. It’s

not too uncommon to hear businesses unfairly paying their employees, the government making

easier for the wealthy to retain their wealth instead of distributing it among the country. Other

nations like China and the United Kingdom aren’t too far behind in the amount of economic

inequality that is expressed within their countries.

Though, economic inequality has existed for years. In some ways, it serves as a balance,

simply because everyone cannot be rich, but in recent years, especially in the start of the twenty-

first century, economic inequality has raised at an alarming rate. Not just in the United States,

but on a global scale, and it’s something to take seriously. When looking at economic inequality,

individuals tend to believe it is solely based upon whether the economy of a nation is up or down

at a time. If major corporations are investing, if stocks are buyable, or if the government is

spending too much money. But economic inequality is a holistic issue that widens through

various problems within a nation. In a way, it is like a national health indicator to bigger

problems that a country could be suffering from. To solve economic inequality one has to look at

it from a holistic lens and only through that can we really begin to find the answers to solve

economic inequality. It’s enough to say that it’s sometimes the simplest solutions that can change

the way we live, and stop all the increasing problems that stem from economic inequality.
 Holloway 3

One factor is cognitive development. We all know that conditions play a vital role in how you

survive in the economy. If you are born with a silver spoon in your mouth then it’s quite obvious

that the system will cater to your needs, if not, then more effort has to be exerted just to make it

to the surface. Though, what makes an economy function just as well as how much people

participate in it. Economies can only work as well as the people who use it. Cognitive

development has two different impacts on economic inequality: fundamental and educational.

Fundamental looks at how the underlying disruption of the family can affect the cognitive

development of children and those who will inherit the economy. While educational looks at

how institutions teach the youth and what that can do for the economy.

Like many places in the world, we’re seeing an influx in the number of families that can’t get

a good paying job. In most cases, there are more single-parent homes now than there were at any

point in history. This leading to children not having much parenting at home, or even being sent

to an orphanage or foster care. What happens within a family does have an impact not only on

the individuals but the nation in a whole. This also plays within the economy as well, as there is

proof that shows it. In an article called Aiding Families, Boosting the Economy, authors Katie

Hamm and Sarah Jane Glynn explain how creating a strong foundational network within families

can better the economy in a whole. They go on to state that monumental growth for low income

and middle-class families had increased, only due to the fact that women have joined the

workforce and if women hadn’t done that the economic inequality would have been fifty-three

percent more than it is now. Though on the grand scheme of things, only families that have two

sets of income coming in will seem to benefit from these increases, in actuality the amount of

money coming home in middle-class families have been stagnant for years now. What’s

surprising is that the U.S. Department of Labor found that if the United States funded paid-leave
 Holloway 4

for women and child-care assistance then more than five million women would enter the labor

force, giving the economy an additional five-hundred billion dollars a year (55-57). The biggest

factor of fundamental cognitive development is the function that women play in a whole. Just by

providing care services for women with children then the overall output of more workers is over

millions, with billions of dollars in return for the country to use.

Another article that backs this fact up is Ivanka Trump’s Paid Family Leave is a Good National

Policy, where she states that in reality sixty-three percent of the families in America are working

families. Providing paid family leave have more benefits, these being healthier children and

parents with better bonds and hope in the labor force, though in today’s society only six percent

of individuals in the United States get this benefit. And these are normally women without a

college degree and stopped working due to childbirth(A.16).

In these cases, the development of family can ultimately help in the closing of the

inequality gap, by allowing women to have more access to care once they have children, and the

grand benefit in all of this is that most women want to work anyways. The other half of the

cognitive development outlook is the educational prospects. Giving more paid-leave to women

definitely has a direct impact on the children. It’s true that the very first teachers a child ever

learns from are their parents. In a recent study conducted to see the effects of parental teaching

on children through an article called Longer Maternity Leave Linked to Better Exam Results for

Some Children, goes into further details about this concept. The idea behind longer maternity

leave is for parents to have more time to spend with their babies. This helps create a stronger

bond between the child and the parents, as well as the cognitive development of the child. Within

the research that was conducted, evidence found that parents who were highly-educated and on

maternity leave had children that made better results on their exams than those who didn’t.
 Holloway 5

Though, it’s also worthy to note that depending on the backgrounds of the parents will vary

greatly with the results of their children. It was also significant that the mother’s background had

a great influence on the child. Most countries have adopted some form of paid leave simply

because of the many types of research that were conducted leaving the same results, but the

United States has been one of those countries that have yet to even consider paid maternity

leave(Adams 22).

The second cognitive development that has a significant impact on the economy is

education. In many places around the world, the idea that getting a higher education can directly

help you get better jobs is only partially true. In economic inequality, no matter how much

education is gain it doesn’t always mean you’ll get paid the money you deserve. Though

education plays in a larger spectrum than just individuals. Rather, how much you teach someone

on particular topics can also have an effect on the amount of economic inequality a country has.

Some question whether or not education actually harms the economy more than it does any good,

and that leads to some tough inquiries.

When you go through the school systems, and then start your post-secondary education

you don’t always question what you’re learning. As parents, you don’t always sense a doubt that

what schools are teaching now isn’t going to change anything twenty years later for your

children. Most people wouldn’t even associate what you learned in your late teens and early

twenties to the economy, yet there is a direct correlation that repeatedly pops up. George Leef

looks at this in his article When Economics Isn’t On Your Side, in which the idea of teaching

basic economics to children then throwing them out into the world to question economic

principles and policies is only adding to our economic inequality.

 Holloway 6

It’s not a surprise that education has changed in the last fifty years. There’s more

technology, more information, and more careers that the youth can enter into, but more

importantly, there’s less necessity to teach certain skills that were required fifty-years ago. In

some ways that thinking has manifest into teaching people the basics of everything without really

having a mastery in what they were actually learning, and then forcing them to use that limited

information to make a big decision. Or at least that’s what James Kwak, a professor at the

University of Connecticut believes. In an interview with George Leef, James Kwak explains

exactly that in economic terms. Most colleges today requires every student to take an economic

course, normally called economics 101. This is where the beginning of the issue begins. Most of

the United States is like this, people range from many different fields of labor, but if they all had

something in common it would be the economics 101 course. There is where the term,

economism comes about, where people make decisions on complex policies by using simple

concepts that they learned from their economics class. In which he states, “A little learning is a

dangerous thing.” He goes on to explain that this little fundamental mentality we have exploited

throughout the years has to lead the government to rely on misguided information which is

making the nation much more unequal and plagued with much more suffering(67).

The implication of education plays a role, and that is what we teach our youth will

eventually come back in the economy as either a great benefit or a great harm. The article pushes

the motion that teaching undergraduates to little about the economy and only giving basic

information like how supply and demand works won’t be able to stop economic inequality, that

only increases the amount of unreliable information that could make the economy even worse

than what it already is. Some can say that starting even earlier than post-secondary learning to
 Holloway 7

introduce the understanding of how the economy works for children to learn isn’t a bad idea to

adopt.

Just like cognitive development, there are more lenses that one can look at in terms of

economic inequality. What really causes the gap to widen even more? We began with the

significance of cognitive development as we looked at it from a family and educational

perspective, but this leads us into the socially unjust ways of societies functionality. Economic

inequality has a much bigger impact that stems from how a nation decides to run itself. The

immense inequality is that of the rich and how the government lets them get away with there

egregious methods. In an article called Billionaires, Fiscal Paradise, the World’s Debt, and the

Victims, the author expounds on that very idea. He goes on to talk about three big questions that

most politicians will refuse to answer. What is happening with the world debt? How are

governments helping the rich to avoid taxes? What is the relation between injustice and

democracy? Though, he basically sums up all three of these question in his opening statement,

that the five hundred richest individuals in the world made a profit of one trillion dollars and that

their fortunes have gone up twenty-three percent to close to five trillion dollars. About two

trillion dollars more than the United States’ budget. Yet, the circulation of the money stays the

same (Savio). The top richest individuals have the ability to decrease the world’s debt if they

would put their money into circulation, but the government loses the rest of the world’s trust

when they create policies that make it easy for the rich to do what they have been doing. Even

more so, it seems that the usage of our democracy is itself an ability for the rich to keep getting

rich making the injustices that people face a commonality for the future.

With that in mind, the various policies that are used to help the rich only further show the

economic inequality which has the ability to undermine that of democracy. Author Konrad
 Holloway 8

Yakabuski looks at how these policies do not provide any aid in closing the gap of inequality in

his article What Trudeau Isn’t Saying about Inequality. In most cases of anyone who understands

the economy, whether they are for or against policies that help the rich, knows that it isn’t about

the inequality at all. Rather it’s points on a political stance for who gets to run the country and

most of the country’s wealth that is accumulated within it. The opinion of Mr. Yakabuski and his

thoughts about this particular issue is explained through a history professor at Stanford

University, Walter Scheidel. His statement was that there is no real way to vote, regulate, or

teach for equality (p.A.11). Which further paves the point that the rich have a one-up over

policies because there is no book that explains how a person creates equality within a nation.

And though most countries live in a democratic society, as in your votes matter and that

everyone’s opinions are expressed through the people that they vote into office, the truth is that a

nation functions on the people who control it, and if that’s rich then that’s most certainly the

nation you’ll live in.

The idea of a rich nation looks like the ones that we are seeing now, the United States

being one of the best examples. Like the policies that we’re being governed by, and the ability

for the rich to gain as much money as they possibly can without sharing it with the rest of the

nation, the people who are not in this position have to wail in the fact that they may never see

what it’s like to have that power. Even though most families today are struggling in this

capitalistic society, the future generations have the worse price to pay. In an article called the

American Dream Collapsing for Young Adults by Jim Tankersley shows economic inequality

becoming a crisis not only in the unfairness for the younger generation, or its ability to

undermine democracy but in losing faith in what made the United States, at least, a worthy place

to aspire to be.
 Holloway 9

In the article, a study about the economic growth between the baby-boomer generation

and the millennials have been in a slow decline. Simply stating that what families considered to

be middle-class and lower income have been stagnant for a long time, despite the fact that the

rich have seen rapid improvements since the 1940s. Even based on the recent tax bill that was

passed by President Trump had shown that it won’t do anything to improve the decline of

income of the middle class, and lower-income families, which makes that much more important

to focus on economic inequality as a whole (p.A.16). Economic inequality has grown so vast to

the point that it eroded the ability for the American ideal to stand on its own, for children born in

these particular families have a slim chance to none of a coin-flip to be able to get out of the

hardships that economic inequality has created.

At one point in time the inequality wasn’t as bad, and even though the United States had

the Great Depression in history, it’s not nearly as bad as the idea that you’d be working even

without adequate pay, that your money would be taken even though you earned it with all the

hard work. Though the issues that were economically troubling during the 1930s and 1940s isn’t

the same as the twenty-first-century issues. The economically troubling situation is much more

horrific. In an article called the Inequality in the Twenty-First Century, the author explains how

across the global economists have voiced their concern about the alarming rate at which

economic inequality is growing, and the two sides that see it. Some people say that economic

inequality is justifiable, which in some cases that is proven true. As in the fact that some

individuals parade resources as more valuable, but if the excuse is based upon those in poverty

don’t work hard enough to become rich is completely dispelled. In fact, it’s a myth to believe

that the rich got to their positions purely on hard work, whilst the poor was just lazy and had no

motivation to see themselves as the top class. The author includes the fact that people are
 Holloway 10

recognizing the flaw in the system, but just recognizing the flaw isn’t enough to change the

effects that economic inequality has already inflicted. What will is creating a blueprint that

would actually combat economic inequality, one in a way where the government finally makes it

possible for the economy to function the way it was written in the laws that govern the United

States(Basu).

There have been many methods that could reduce economic inequality, including the ones that

were mentioned earlier such as the cognitive development, aiding families, pushing more women

into labor, but in the economic prospects of how the economy runs, one great solution is the

blockchain method. The author further investigates this in their article, Here’s How Blockchain

can Reduce Inequality. The blockchain system is simply a system where everyone gets a share.

The functionality of the system is that instead of enhancing inequalities through tax and benefit

systems once they’ve occurred, we make everyone a shareholder endowing everyone with the

same access and dignity. This model could foster innovation and investment while giving

everyone a stake in the future(Berggruen). The United States had made itself to be a country that

should immersive among the different people that reside in its lands and share the wealth, so why

not adopt a real policy that could make that true. This would turn out capitalist society into

something less capitalistic, but if trust could be brought back into the citizen's hearts then surely

wealth can still be gained and at a fair price as well.

Although the blockchain is a blueprint that could minimize the damage of economic

inequality, there are always obstacles that make it hard to implement worthwhile systems. For

countries like the United States that dominated the markets globally, nationally politics keep the

unfairness alive and well, pushing economic inequality to become the norm we live by. It’s not a

surprise since there is such a big divide within the government before you even get to the
 Holloway 11

discussion of economic inequality. The tension between the Democrats and the Republicans

already create the spectrum of how important economic inequality is, though neither is willing to

look passed their views and actually enforce a policy that would stop the growing gap that is

inequality. Even though the Democrats understand that economic inequality is an issue that

needs to be examined with much more care, it seems almost impossible for the government to sit

down and look since the Republicans are dominating the United States’ politics. And even the

Republicans are finding themselves in a paradox about economic inequality.

In an article by Brink Lindsey and Steven Teles by the name of The Conservative

Inequality Paradox shows the two opposing perspectives of the conservative party and how they

favor the rich despite the proof that shows that there’s nothing that can truly justify economic

inequality. The two perspectives are split into this: the ones who believe that corruption is

clogging up the American economy and favors the rich, and the other side stating that the total

income earned from the top one percent is morally justified by rights of property and free

markets. The paradox of how different these two viewpoints seem shows that either the idea of

corruption is a very small amount in the United States or that inequality is similar to envy(pp.34-

36). Economic inequality persists when viewpoints like those that dominate the mainstream

media. No matter how many solutions come about, or how long economists beg for governments

to look at economic inequality as a crisis then simply something that’s paraded as unfairness in

life if the politicians that we choose rather see too it that the rich gets wealthier than certainly,

nothing will ever change.

This statement is further explained through an article called The Right Questions about

Economic Inequality and Growth where the author measures whether or not economic inequality

is a bad thing, but what he truly finds is the difference between policymakers and economists.
 Holloway 12

Like the blockchain method that was mentioned earlier is a systemic program to combat

economic inequality constructed by an economist. Economists can use data, and numerical

information to find solutions to solve economic inequality, but for policymakers, it’s a little

different. For policymakers, it’s about the impact of the people in general. In economics much of

what we consider wealth is a tradeoff or an offset of something else, to that extent then economic

inequality is something that’s bound to happen naturally. Though the economic inequality we are

facing today is something by choice. Choosing to make it harder for the overall mass to suffer

from injustice, unequal distribution, and policies that only help the rich. The author states that in

order to really help decrease economic inequality, policymakers have to start looking at

outcomes and distribution tactics that will impact the individuals rather than the overall

economy’s health(Furman). Though this goes back to politicians perspectives. In most cases our

politics are no longer looking at the impacts of our decisions on people, but rather on our own

agendas how we further ourselves and not the whole.

What isn’t told about economic inequality is just how long it’s been happening and how

that is undermining democracy, our choices have the biggest impact that keeps economic

inequality growing. In an article called the Study: US Inequality Persists 50 Years After

Landmark Report exhibits the fact that economic inequality has actually worsened since a report

of the same caliber was made fifty years earlier. The article ties into this very important factor,

economic inequality grows as an expense of every other persisting problem such as racial

tensions, social injustices, child poverty, and ethical transgressions. He then goes on to say that

the blame falls on the policymakers as they have turned a blind eye to the major issues that have

taken over our country for far too long. Though a report called the 1968 Kerner Report was made

fifty years earlier, and its findings are enough evidence to show that we are only destroying our
 Holloway 13

democracy if we don’t take our economic inequality and other social issues as a serious

priority(Contreras).

Economist Branko Milanovic furthers this notion that the government can significantly change

our economic inequality levels in his article The Two Sides of Today’s Global Income

Inequality. The truth is since the 1980s the richest one percent has made profits equal to that of

the 3.7 billion poorest individuals that create half of our nation’s population, and in most

countries, this isn’t new. How is it possible for only a few individuals to have that much control

over so many individuals? That’s simply because our laws and policies are catered to the rich,

back then not many people were making so much money nor was the population as big as it is

now, so the laws worked. But today, policies have to change and cater towards the rest of the

population that isn’t apart of the elite class. Milanovic makes a statement that if policymakers

made policies that would help people have the minimum wage that gives them a decent standard

of living or forcing businesses to give more benefits for their employees then that could reverse

the effects of economic inequality. A drastic change in how we think is necessary if we want to

see any change(p.B.4).

Authors Chuck Collins and Josh Hoxie also make the argument that there has to be a

drastic shift in how we run our country within their article Our Growing Wealth Gap, by the

Numbers. They begin with this striking point: imagine three people versus one-hundred and sixty

million people hold most of the wealth. Throughout the article throwing number like the creator

of amazons, wealth is increased by four million per second. The economic inequality is not only

wide but massive in how much concentration is going to the rich and not to the rest of the

population. What’s worse is that those who have to take the hardest fall when it comes to wealth

is African Americans and Latinos, minority groups. Though this does not just apply to the
 Holloway 14

discriminated individuals, but for whites as well. Most American families are actually poorer

than families were thirty-four years ago(p.A.15).

But whose suffering the most from these terrible inequality issues? Just like Chuck

Collins and Josh Hoxie stated that we are poorer than families were thirty-four years ago, then

imagine how much inequality actually runs through the very cracks of our society. Well, the

widening inequality is in majority countries that have the most control in the markets. In an

article called the Widening Inequality Is Largely a US and Uk Phenomen - Why?, explores how

the widening gap in economic inequality is growing in the two most dominating countries in the

world, the United States, and the United Kingdom. The most shocking information being that the

United Kingdom has almost the same economic inequality storyline as the United States. Since

the 1980s the rich would gain most of the profits, and the rest of the population would miss out

on all the money that has been earned. Even more so the few richest individuals control the

distribution of wealth more than the policymakers do, and in this case, the author states that this

economic inequality is becoming an inheritance issue that each new generation will have to carry

on(Cable).

In conclusion, our education, families, policies, global connections, social injustices, and

ethical reasoning serve a greater purpose in our country. In each of those instances if we look at

today’s society those pillars are slowly crumbling and the economic inequality we’ve witnessed

is just an indicator that this issue is very real. Although it’s been stated through the various

research found to prove that America and many countries around the world need to reassess how

they conduct their countries to stop the crisis from getting worse, that’s not the root issue. The

real root cause of economic inequality is the humility. Where are the policies that ready the

future generations? Where is the education that teaches people to be human and to care for one
 Holloway 15

another? Where is the sense of urgency when it comes to national issues? What happened to

nationalism and the freedom for all people? What happened to the essence of humanity? These

are the questions we should be asking. Democracy is not necessarily undermined by the

institutions that it abides by, but rather the people who control it. The economy isn’t necessarily

crumbling simply because the rich is taking more than they should. The power to change that

doesn’t lie in the rich or the systems that makes this nation what it is. It lies in the people, and

when the people don’t care, then nothing can change. The real intent is to recognize that if we

don’t change ourselves as individuals and start caring about who we are and what we want to see

in the future, then we can’t even begin the conversation for a solution? If we ourselves aren’t

going to take responsibility for the injustices rather than blaming the systems that were made by

us then what are we fighting for? The root cause of economic inequality, the undermining of

democracy, and social injustices, are caused by us. It’s important to remember what it means to

be human, because in that you understand the connection of how everything works in harmony.

In the end a nation, an economy, and a government can only function as good as the people do,

they are only mirrors of the people it represents.

 Holloway 16

Work Cited

Adams, Richard. "Longer Maternity Leave Linked to Better Exam Results for some Children."

The Guardian, 08 Feb, 2018, pp. 22, SIRS Issues Researcher, https://sks.sirs.com.

Basu, Kaushik. "Inequality in the Twenty-First Century." Project Syndicate, 15 Dec 2017, SIRS

Issues Researcher, https://sks.sirs.com.

Berggruen, Nicolas. "Here's how Blockchain can Reduce Inequality." Global Viewpoint,

05 Feb, 2018, SIRS Issues Researcher,https://sks.sirs.com.

Cable, Vince. "Widening Inequality is Largely a US and UK Phenomenon - Why?" The

Independent (Online), 05 Sep, 2017, SIRS Issues Researcher, https://sks.sirs.com.

Collins, Chuck, and Josh Hoxie. "Our Growing Wealth Gap, by the Numbers." Los Angeles

Times, 15 Nov, 2017, pp. A.15, SIRS Issues Researcher, https://sks.sirs.com.

Contreras, Russell. "Study: US Inequality Persists 50 Years After Landmark Report."

Albuquerque Tribune, 27 Feb, 2018, SIRS Issues Researcher, https://sks.sirs.com.

 Holloway 17

Furman, Jason. "The Right Question about Inequality and Growth." Project Syndicate, 19 Jan,

2018, SIRS Issues Researcher, https://sks.sirs.com.

Hamm, Katie, and Jane G. Sarah. "Aiding Families, Boosting the Economy." American

Prospect,

2016, pp. 55-57, SIRS Issues Researcher, https://sks.sirs.com.

Leef, George. "When Economics Isn't on Your Side." Regulation, 2017, pp. 67, SIRS Issues

Researcher, https://sks.sirs.com.

Lindsey, Brink, and Steven Teles. "The Conservative Inequality Paradox." National Review,

Nov, 2017, pp. 34-36, SIRS Issues Researcher, https://sks.sirs.com.

Milanovic, Branko. "The Two Sides of Today's Global Income Inequality." Globe and Mail, 22

Jan, 2018, pp. B.4, SIRS Issues Researcher,https://sks.sirs.com.

Savio, Roberto. "Billionaires, Fiscal Paradise, the World's Debt, and the Victims." Inter Press

Service, 02 Jan, 2018, SIRS Issues Researcher, https://sks.sirs.com.

Tankersley, Jim. "American Dream Collapsing for Young Adults, Study Says." Washington

Post,

09 Dec, 2016, pp. A.16, SIRS Issues Researcher, https://sks.sirs.com.

Trump, Ivanka. "Paid Family Leave is a Good National Policy." Wall Street Journal, 05 Jul,

2017, pp. A.16, SIRS Issues Researcher,https://sks.sirs.com.

Yakabuski, Konrad. "What Trudeau Isn't Saying about Inequality." Globe and Mail, 27 Nov,

2017, pp. A.11, SIRS Issues Researcher,https://sks.sirs.com.

Holloway 18