INCOME INEQUALITY 1
11
INCOME INEQUALITY
How Income Inequality influences The Economic System
Chenyu Xu
IPEA 050
Reading/Writing 5
11/13/2019
Introduction
Upward mobility is usually a branch of social mobility. It relates in particular to the movement of a given individual or even a group of people from low social status to a high social status, so the name is upward mobility. Often, upward mobility is influenced by a variety of factors, including economic, cultural, human, and social factors in the two main economic structures, which are Capitalism and Socialism. I think the most common problem is income inequality that stands in the way for Americans to achieve the American Dream and to work with passion. In order to achieve personal upward mobility and also the American Dream, economic attributes need to move up the social hierarchy to promote individuals’ favorable opportunities to adapt to high-status society. In short, upward mobility constitutes the survival of the most appropriate mechanism in the social hierarchy.
Several economic factors may distract and inhibit the effectiveness of upward mobility within the society and retard the socioeconomic progress of an individual in moving up the societal hierarchy. Just to mention a few, these economic factors include wage and salary inequality, income gap as per literacy in the society, unequal wealth distribution, labor markets, globalization as well as technological changes, and policy reforms (Lumen, 2019).
Problems
As mention in the introduction section above, there are diverse factors that affect social mobility, especially the upward mobility in the society. These factors include structural economic, cultural, human as well as social capital forces that have adamantly rejected the upward mobility in most society. Structural economic forces are particularly aligned with economic inequality in the respective societies (Adam, Jeremy & Michael, 2013). The inequality can be seen within the wealth distribution in that particular society.
Looking at the Gini coefficient which is particularly a statistic that demonstrates a measure of inequality within a statistical distribution, economic inequality has become apparent and damaging in most of the modern societies. (Adam, Jeremy & Michael, 2013) One of the main problems that hinder upward mobility in most modern societies is the inequality of wages and salaries. In fact, due to the nature of their work and the description of the workplace, all individuals in society are not paid equally. This has greatly affected and hindered the upward flow of success in most societies.
Inequality in wages and wages in society creates an income gap between skilled workers and temporary or unskilled workers in society. The income gap concentrates the wealth of society in the hands of a few high-paying people, while the rest are at the expense of the interests of the rich. Other structural factors that negatively affect upward mobility are globalization. International influence is critically damaging the capability of individuals to move upward within the social hierarchy in social mobility (Adam, Jeremy & Michael, 2013). Both social globalization and economic globalization play a huge role in the way a person can move up in the social hierarchy and the way in which such a person positions itself in social positioning.
Another problem in the upward movement is the labor market within society. In terms of supply and demand, the existence of employment and labor is the main structural economic factor that hinders upward mobility. In terms of United States, the labor market is mainly defined by the modern economy, while the modern economy is the main determinant of the labor force, and the employment opportunities of the entire society are limited. Within the capitalist market, labor and employment availability is majorly influenced by the set supply and demand in the region (Alex and Steve, 2017). When the demand for work in society is high, the supply of work will decrease, and vice versa. These problems caused people’s negativities, and they could no longer have the motivation to work and furthermore, to achieve the American Dream.
Solutions
The solutions of the above structural economic forces can be rooted from the economic system. To start with, there is a need to increase government initiatives which may stabilize the economic equality within the society. Having social services and opportunities which are equally distributed regardless of the social status is a prompt that will gear up the stabilization of the economic atmosphere within the society (Gonzalo, 2018). Therefore, it is necessary to allow social scientists and policymakers in different governments to discuss the relative advantages and efficiency of each method of regulating economic inequalities within their societies.
Public education is also an effective way to solve the above problems. It helps increase the supply of skilled labor and alleviates income inequality due to educational differences. This way, the gap between the rich and the poor will become much smaller. The rich who are full of knowledge and skills will help those with lower education levels to move up in the social positioning hierarchy. These talents are being needed in order to achieving the American Dream. Reducing the existing gap of poverty in the society is a domineering and effective approach to address the economic situation (Gonzalo, 2018). In terms of capitalist strategy, the government needs to tax the rich in society on a proportional basis, not the poor living in the same society. This will help to ensure that the number of income inequality within society is greatly reduced and that the economic gap within society is reduced. This will essentially help to have wealthy individuals in society, thereby reducing social stratification. The wealthy can equally be treated as other members of the society.
The government can also increase the wages of the poorest workers in society by providing the necessary resources for these workers. They can ensure less corruption in society and create business and employment opportunities for these poor people in society. This is one of the strategies that governments can use to reduce these income gaps. The government should also make society aware of the need to establish an open stratification system in society. Today, most of the societal members are confined within the closed stratification systems. Unlike the case in the open class system in the society, the closed class system has the community members confined in the community at a poverty level which is attached to their ancestral occupations (The New York Times, 2016). Their social status depends on the family background and not on social status based on individual efforts and economic contributions. These are exactly the concepts and possible solutions for every American in order to achieve the American Dream, at least financially.
Closed stratification systems normally result the society in being less industrialized therefore creating a barrier to economic progress when it comes to business trades in the region. The government need to discourage the community in overly depending on the ascribed status but rather depend on achieved status in the society. Ascribed status majorly relates of social positioning of an individual on the basis of their family background as well as personal characteristics which are beyond their control such as race and gender (Carol, Diane & Phillip, 2018). On the other hand, the state of achievement depends on the individual’s social status and on their personal accomplishments and achievements.
Counter Arguments
However, other people might say that the upward mobility is causally distracted by factors such as the rule of law, invisibility of corruption, the available opportunities for innovation as well as dynamism in the ecosystem for entrepreneurship which are more linked with the economic growth and development. Nevertheless, as per their arguments, there can be good reasons for believing that such significant variables are crucial in determining the social effort of each and every individual in the society (Barry & Masahiro, 2015).
Nevertheless, the casualty of such factors as argued by these people will attributively suggest shifting attention from mitigation of economic inequality to address the structural factors with an attempt of both reducing socioeconomic inequality and increasing the upward economic mobility in the society (Barry & Masahiro, 2015). The implication only addresses the economic mobility as well as inequality conversation.
The rebuttals to the argument above is the fact that the counter-argument majorly involves the societal economic part rather than the social part of the society. The argument has its baseline focusing on the economic progress of the society rather than the social mobility hindrance in the society (Brink & Steven, 2017). The argument only calls for policy recommendations that are beyond the platitudes in the society.
Conclusion
Obviously, in many societies, upward mobility has been harmed in recent years. Due to structural economic factors, such as wage inequality, unfair distribution of wealth, labor market, globalization, technological change through modernization, education and taxation, are stumbling blocks to achieve the American Dream and seriously affecting the rise of social mobility in society. People need a good leader who have good strategies and could make fair decisions. Inequalities in different areas won’t disappear but could be reduced. Also to achieve the American Dream will be a long process and people must have the mentality to sacrifice.
References
Adam Looney, Jeremy Patashnik & Michael Greenstone (2013), Thirteen Adam Looney Economic Facts about Social Mobility and the Role of Education, Brookings. Retrieved from https://www.brookings.edu/research/thirteen-economic-facts-about-social-mobility-and-the-role-of-education/
Alex Nunn & Steve Johnson (2017), Factors Influencing Social Mobility, Research Gate. Retrieved from https://www.researchgate.net/publication/237102825_Factors_influencing_social_mobility
Barry P. Bosworth & Masahiro Kawai (2015), Transpacific Rebalancing, Implications for Trade and Economic Growth, pp. 158-161. Retrieved from https://books.google.co.ke/books?id=pQiVCwAAQBAJ
Brink Lindsey & Steven Michael Teles (2017), The Captured Economy, How the Powerful Enrich Themselves, Slow Down Growth and Increase Inequality, pp. 121-125. Retrieved from https://books.google.co.ke/books?id=mYY0DwAAQBAJ
Carol Vincent, Diane Reay & Phillip Brown (2018), Education and Social Mobility, Taylor and Francis Group, pp. 102-103. Retrieved from https://books.google.co.ke/books?id=nR8OtAEACAAJ&dq
Gonzalo Schwarz (2018), The Importance of Structural Factors in Understanding Economic Mobility, Arch bridge Institute, pp. 12-15. Retrieved from https://www.archbridgeinstitute.org/2018/10/09/the-importance-of-structural-factors-in-understanding-economic-mobility/
The New York Times (2016), Class Matters, pp. 112-113. Retrieved from https://books.google.co.ke/books?id=XjY7QPA9I3EC&dq