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Wealth Inequality reducing our Nations growth

The author Christian Strong is a Journalism Major with a minor in communications

And niche in sports management
At
Seton Hill University
Course: Politics of Sustainable Development
9 November 2016
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EXECUTIVE SUMMARY
Reducing inequality within and among countries is the tenth
sustainable development goal that works towards transforming our
world in a positive light that reflects equality, happiness, and success. The
imbalance of wealth distribution and lack of government is the major
disparity problem with wealth inequality that society faces today. The
rich are rising tremendously, the poor are falling dramatically, and the
middle-class is trying their best to remain stable. The wide gap between
the rich and the poor is becoming more visible as the days go by. Due to
job opportunities decreasing, minimum wages reduced, high taxes, less
applicable banking services, corrupt international trade as countries are
taking advantage of each other, and big corporations not paying their fair
share in payments. All of these factors emulate why wealth inequality has
such an effect on our country and nations growth. Without a clear policy
in tact that focuses on secure wealth distribution as well as a general plan
to eliminate the drop off between the high-income low poverty countries
and low-income high poverty countries no change will be seen.

STATEMENT OF PROBLEM
The sustainable development goal of reducing wealth inequality has been an
issue for a long time across the nations and has even been noted by U.S. President
Barack Obama as the defining challenge of our time, (Atkinson, 29). When we turn
on our televisions and see less privileged children without shelter, food, or water we
often notice the disparity problem, or even when we see others living on glamorous
conditions that we would never imagine, chances probably stem from wealth
inequality. The problem with wealth inequality is that the money is not being
distributed evenly across the nations based on classification. For it is noticeable that
there is too wide of a gap between the poor and the rich due to the imbalance of
distribution and lack of government. Recent published research finds that, one
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billion of the worlds people live in extreme poverty. Half of the people in the world
are living on less than $2.50 a day. 80% of the worlds people live on less than $10 a
day. And the vast majority of people in the world, 80%, live in countries where the
income gaps are widening, (Hasty, 39). This deficit is leaving many citizens within
different countries, who are experiencing poverty and low-income, a tough chance
to climb themselves out of the hole they are in. Much more time and effort must be
focused on the economically poor before we can begin to see change and some
balance. For instance, the three wealthiest individuals in the world cumulate for the
poorest 10% of the world population. These individuals include, Bill Gates - founder
of Microsoft with a net worth of $85.9 billion, Amancia Ortega founder of Inditex
fashion group including global brand Zara with a net worth of $75.8 billion, and
Warren Buffett - CEO, entrepreneur and investor with a net worth of $68.2 billion.
The wide gap from wealth inequality rests as the primary disparity development
issue that must be reduced in order to see economic growth within countries. Too
many families and individuals all over the world are being disregarded based upon
where they financially stand among their classification that truly limits them.
Quantitative Analysis of the wealth inequality problem

Fig. 1: Depicts the percentage distribution of world millionaires by country as of 2015. This graph
conveys that the Western and European countries seem to contain the majority of wealth with
approximately 78%. The non-Western nations that have significant value to the global millionaire
shares are: Japan, China, and Taiwan being the industrial powerhouses.
Source: Credit Suisse Research Institute, Global Wealth Report 2015, October 2015
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Not only is the U.S. experiencing a rough patch of jobs that have been unable
to provide the proper payment amounts for citizens to live accordingly, but also
places like Accra, Ghana. According to an analytical study taken in the urban city of
Accra, 77.4% of households were classified as poor, with 16.6% as medium and only
6.0% as high wealth, (Boadi & Kuitunen, 196). Much of these statistics stem
primarily towards the level of education one has. For instance, only 25.6% of the
poor have had secondary or higher education compared with 62.3% of medium
wealth and 84.5% of high wealth respondents, (Boadi & Kuitunen, 196). These
numbers show how much education is a factor in order to become successful and
acquire an occupation that remotely satisfies the daily common human needs.
However, wealth and education simultaneously go hand-in-hand for without one
you cannot have the other. If you are not wealthy or have some sort of stable income
then chances are that you will be unable to even attend schooling that could have
potentially helped your stock rise in the job market field. Now I understand
completely that the more skilled worker who put more time into becoming
knowledgeable in their field of study is definitely the more deserving of higher pay,
but can we really leave out those who are not even given the opportunity to do so?

BACKGROUND
With a vast amount of inequalities in todays society, one can say that the
root of the problems people experience across the nations today presently can be
primarily because of the unequal distribution of wealth. The constant talk around
the globe is based around the wide gap between the poor and the rich. It has been
noted that, sports and media celebrities, income growth has come from a perfecting
of the labor market; for a different group, top corporate executives, it has come from
breaking down (or even an overthrowing) of the market, (Crook, 37). With many
celebrities falling under the high-income rate, one would think that they would give
back to the community and donate towards countries economies, whether it is
building corporations that attract more jobs, or funding schools that would
strengthen the literacy degree. For it is a clear indication that As technology puts
stars in front of bigger audiences, their incomes multiply, (Crook, 37). Even if
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higher income taxing was strictly applied to these individuals who are financially
equipped to meet these payments, it could ultimately be used to give money back to
the communities that are struggling such as suburban or rural areas that lack the
necessary resources.

Fig. 2: The global map conveys the World Wealth Levels from 2015. As you can see, over 100,00USD resides
in North America, Europe and Australia. Below 5000$ USD is in third world countries such as Africa and
Middle Eastern countries.

There are other well-known discrepancies in the division of personal wealth

(Skopek, et al. 468) that forms wealth inequalities. There are also various reasons
for unequal distributions of financial income and wealth that might account for the
wealth variations within other countries (Skopek, et al. 468). According to Skopek
and colleagues, demographics such as age differences or race, along with economic
characteristics such as education to even marital status, or even family sizes across
countries are important factors for explaining the variations between the amount of
wealth and the unequal distribution of wealth (468). In addition to these variables,
A growing number of scholars agree on the importance of psychological variables
to complement them, (Skopek, 468). Among these variables is self-control, taste
for saving, voting patterns, or other preference parameters like the degree of risk
aversion. This journal really focuses on the countries citizens, for they speak
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volume on whether their country is facing wealth inequalities or not too. I can also
see how a persons greed or inability to manage funds that could come in the way of
dealing with wealth inequality. However, one must also place some thought more on
the countries government, as they can pass down rules and regulations for people to
follow that does not give them the fair and equal chance to grow in wealth equality.

POLICY OPTIONS
There are many people who have noticed the problem of wealth inequality
that we face across the nations stemming from citizens to government officials, to
profit and non-profit organizations. One of which is Other 98, A nonprofit
organization and network that exposes the unfairness of corporate America, holding
them responsible for the lack of assistance the non-rich receive because of their
over-ruling control due to high-income. This organization really focuses on the
popularity of trends, social media, and campaigns and articles to make their voice
heard and begin debates on ending the class war once and for all. The notion that
there is a low, middle, and high class is already a problem of its own in the eyes of
this non-profit organization. Eliminating the classifications and subjective
generalizations towards individuals and families could provide more equality
amongst our nation since everyone now will be considered in one class, human.
For instance, according to economist and professor of Paris School of
Economics, Thomas Piketty, economic inequality is something that is actually
showing a lack of growth even though is said to be steadily improving, (Piketty,
New thoughts on capital in the twenty-first century). In a TED Talk video, Piketty
goes on to explain how, we dont want to return to those kind of extreme pre-
world war 1 inequality, having a decent share of national wealth for the middle class
is not bad for growth, it is actually useful most for equity and efficiency reasons,
(Piketty, TED Talk). Often times we mainly hear of the constant talk about only all
that we are going to transform in order to make the poor become rich and the rich
to become basically less rich. We tend to forget about the middle-class and keeping
them stable. Very easily an individual or family can plunge from middle to lower
class or middle to higher class based on their job occupation or even how the
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economy or global market is running. This ultimately provides fuel to the growing
wealth inequality gap. Now it would be ideal if we lived in a society where the
middle-class prevailed and was the dominant, but unfortunately this is not the case
in the world we live in. In the world we live in there are many causes of wealth
inequality majorly hovering around discrimination of gender and ethnicity. Across
the world there is a lack of government control on the people that allow for racism
and other stereotypes to rule. We even see religions and cultures practice traditions
that discriminate ones sex and the freedoms they receive which ultimately will
affect their status and purpose, thus creating problems of inequality and unfairness.

POLICY RECOMMENDATIONS
Universal free public services (healthcare and education)
Increasing minimal wage rates
Increasing income tax for wealthier class families
Decreasing income tax for poor individuals

Some solutions to the problems we face can be to invest in universal free

public services such as healthcare and education. This will provide all people no
matter their skin tone, age, or any demographic to receive equal opportunities that
can assist their wealth and decrease the wide gap of inequality that we currently
face. Citizens will not only gain the benefit of their health but also their pockets,
being said that, they would be able to save money when going to treat medical
attention. In addition, there needs to be an agreement on a global goal that brings
everyone on the same page to tackle wealth inequality. Whether that is raising
minimum wages and lowering state or country taxes, or is enforcing proper import
and export trading. Either or, government interference is necessary for them to step
in and provide methods that focus on the entirety of reducing wealth inequality and
promoting awareness and exposure to global change. We grasp the idea on wealth
inequality in many of our towns and cities different neighborhoods that reveal their
classification. Too many neighborhoods in America are within miles of an absolute
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opposite income class neighborhood. This short gap of a few miles is foreshadowing
the extreme nationwide gap of wealth inequality. Why is it, ten minutes down the
road one will notice million dollar homes and then ten minutes down another road
trailers and run down shacks or apartments for living accommodations? Regions
and communities need to notice these variables and modify their thoughts on
balancing out the allocation of ones capital/fortune.
The fastest-growing categories of work are retail, restaurant (including fast
food), hospital (especially orderlies and staff), hotel, childcare and eldercare,
(Reich, 14). With this said, federal minimum wage rates only range from $7.25 to
$10.10 per hour across the United States for these entry-level occupations. Seeing
rates fluctuate between these amounts does not allow the average citizen to grow
economically and stresses their ability to rise in their classification. Raising the
minimum wage to at least $15 could possibly see a better economy with more
households capable of making their payments and having enough leftover money to
save or freely use how they please. But, as of 2013 the importance still remains on
the financially elite as $26.7 billion in bonuses were paid by Wall Street firms to
165,000 of their employees that proves redistribution of income away from low-
class workers, (Clark, 30). With the primary focus still on the greed of the high-
income workers, the low-income workers will continue to catch the short end of the
stick. By raising minimum wages it allows workers who are under this grouping to
feel more motivated and ambitioned to keep saving money.
In addition, Government should step in and highlight the ongoing topic of
taxation and increasing it more. For example, In the Unites States and the United
Kingdom, the top marginal rate should rise from 45 to 60 percent, (Atkinson, 30).
Currently, it seems to be that the income taxes for wealthier families are too low or
equivalent to those of the middle class. This is unfair and does not take into account
the hardship of those who are already being taxed from their job and then having to
pay high tax rates on top of that. Theres no way that the low or middle-income class
can keep up with those of the high-income class when they are being taxed
equivalently or just about close to it at par. Referring to the article Game Changers,
68% of Americans support raising taxes on people earning more than $1 million,
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(Anderson, et al. 13). Doing so would only seem fair since they financially have the
funds to make those payments while still remaining privileged. Therefore, going
forward with a policy plan that reduces wealth inequality within and among nations
is crucial in order for the world to see economic growth and financial stability.
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Works Cited
Anderson, Sarah, et al. "Game Changers." Nation 302.10 (2016): 12-14.
Academic Search Elite. Web. 31 Oct. 2016.

Atkinson, Anthony B. "How To Spread The Wealth." Foreign Affairs 95.1 (2016):
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Boadi, Kwasi Owusu, and Markku Kuitunen. "Environment, Wealth, Inequality

And The Burden Of Disease In The Accra Metropolitan Area, Ghana."
International Journal Of Environmental Health Research 15.3 (2005): 193-
206. Academic Search Elite. Web. 31 Oct. 2016.

Clark, Charles M. A. "Pay Up." U.S. Catholic 79.7 (2014): 30-32. Academic
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Credit Suisse. "Research Institute." Publications.credit-suisse.com. Credit Suisse

Research, Oct. 2015. Web.

Crook, Clive. "The Height Of Inequality." Atlantic 298.2 (2006): 36-37. Academic
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"Glaring Inequalities." America 13 May 2013: 5. Academic Search Elite. Web. 31

Oct. 2016.

"Global Inequality | Inequality.org." Inequalityorg. N.p., 2015. Web. 09 Nov. 2016.

Hinson-Hasty, Elizabeth. "The Problem Of Wealth[This Artic]." Cross Currents

64.1 (2014): 39-58. Academic Search Elite. Web. 31 Oct. 2016.

Piketty, Thomas. "New Thoughts on Capital in the Twenty-first Century." TED Talk.
TEDSalon Berlin 2014, June 2014. Web. 09 Nov. 2016.

REICH, ROBERT B. "10 Practical Steps To Revers GROWING INEQUALITY."

Nation 298.21 (2014): 12-17. Academic Search Elite. Web. 31 Oct. 2016.

Skopek, N., S. Buchholz, and H.-P. Blossfeld. "National Patterns of Income and Wealth
Inequality." International Journal of Comparative Sociology 55.6 (2014): 463-
88. Web.