Posted: July 25th, 2022

Trends of Inequality in America Post WWII

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Trends of Inequality in America Post WWII

Abstract
Largely historical and perpetual social injustices have and continue to play a greater role in perpetuating inequality within the United States. But more interestingly, today, the concentration of wealth within the white elite, when compared to the general population and especially people of color, shows a stark contrast of realities that predominate the American social and economic fabric. McIntosh identifies with these sentiments, further indicating that a typical white US family, on average, earns ten times more (171,000) than a typical African American family as of 2016: 2024 – Do my homework – Help write my assignment online. This predisposition is a result of the manifestation and accumulation of inequalities and discrimination, as well as the difference in power opportunities, all of which can be traced back to the racial relations between different groups of people in the USA since its inception. The wealth gap is nestled between the black and white people, but this point of reference remains the most distinguishable entity as it reflects a society that has not made efforts to address inequality of opportunities for all its citizens alike.

Introduction
After the Second World War, economic growth, for the most part, was very rapid and inclusive. After the second world war, 1950-1980s, the period after the second world war is perhaps some of the most economically interesting periods for the majority of Americans (Perez-Arce et al.). Historians identify this period as the golden age of economic growth for the western countries as well as Japan, primarily because there has been no other period in the history of the world where economic opportunities expanded and had a wider reach, in such a rapid manner and within such as short time (Vonyo). Rapid growth was sustained by interconnectivity and cooperation of the states after World War II and increased capitalism across major global powers, which inadvertently promoted and sustained a larger volume of trade between nations. Vonyo opines, “Rapid growth was also driven by a sustained boom in international commodity trade. In the view of Lamfalussy, growing exports promoted investment at home which, in turn, raised output and productivity, making economies more competitive on international markets and, therefore, leading to further increases in foreign” (223). The consequence of this rapid growth was the inclusion of the majority of Americans across racial and gender lines into the larger economic system, as more and more people managed to secure income-paying jobs, houses, and education.

Historical and Current Statistics
While more and more people were gaining access to meaningful employment and, as such, a wider disposable income, the gap between the rich and the poor was just starting to widen, and the divide has continued to grow and manifest to the present day. This presents a very interesting paradox on wealth and access to wealth within the US, especially when wealth creation is assessed between the typical male working-class (dominant typical working-class person) and the white 1% rich male (who is the dominant typical rich person). Cadwalladr indicates that in 1978, a typical US working-class male made $48,000 a year, while the average person in the top 1% was making $390,000, by 2010 – Essay Writing Service: Write My Essay by Top-Notch Writer the salary for the average person in the US had plummeted to $33,000, but on the contrary, the rich had climbed up to $1,100,000. Richard Reich expresses this stark difference in income in the film Inequality for All to resemble a suspension bridge when the data is charted from 1928 through to 2007. The income inequality between the rich and the poor has continued to rise and gain significant distances, as rich find it easy to create wealth, and the poor have limited access to modes through which wealth could be created, furthermore, across racial lines, the situation if far worse, as people of color especially black and Latino have historically been nested in the lower levels of the socioeconomic pyramid, with little avenues for wealth creation, limited resources for education among a variety of other things.
By the 1970s, the Western European world had started catching up with the US. Vonyo identifies that with the increasing economic gap and rapid reconstruction post-world war II in Europe, by 1971, most of the destructions Europe had endured were already reconstructed, and its economy was increasingly starting to compete with the US, which was virtually unscathed in the post-WWII. This chain of events had a significant impact on the economic domination that the US had endured in the period before the 1970s. Neckerman and Torche identify that in the mid-1970s, levels of inequality and economic disparities between the rich and the poor started increasing and becoming higher than compared decades. This was significant, as the levels of inequality, while present in the three decades after world war II, were not as stark as they were by the end of the 1970s. Neckerman and Torche further point out that this trend has grown and metastasized to the point that the US is now the most unequal country among the OECD countries. The inequality is expressed in earnings, opportunities for education, jobs, and other critical social infrastructure, and mainly expressed by race, gender, and family systems (single-parent families are generally poorer). Neckerman and Torche additionally identify with the growth of inequality, stating that wealth has become more unevenly distributed than income, especially along racial lines (as wealth is generational). How is this phenomenon explained?
Possible Explanation
Marxist Framework
The first approach to explaining the rise in the wealth gap would be to conceptualize the problem from a Marxist framework that critically analyses the difference between the working class and the rich. The Marxist framework is inherently in opposition to capitalism (the predominant economic system in the US) in favor of communism. Marxism identifies that capitalism is the genesis of socioeconomic conflict as it creates two distinct socioeconomic groups within any society. The proletariats (working class) and the bourgeois (the rich). These two systems are inherently opposed to one another, especially under a capitalist system that is bent on maximizing profits at the least cost of production. In Karl Marx’s Communist Manifesto, it is identified that throughout history, society has shifted from feudalism into capitalism, and the basis of this shift has been in the manifestation of two distinct social classes, one exploiting the other since they have a means of production to sustain life. Classed society, under capitalism, leads to the creation of private property, as people with access to power want to retain the power. This leads to overexploitation of the workers by the rich for their own (rich people) benefit. It manifests in resentment as most people in the working class are barred from accessing these similar resources so that they can attain upward social mobility and self-actualization (Marx). At the same time, the primary goal of materialism is the accumulation and sustaining the wealth over a great time to attain power; the rich, as such, are motivated by their own self-interest and in their position to exploit the poor. Consequently, a wealth gap manifests and dictates how the people associate within the society in competition for scarce or locked resources.
Consequently, under the Marxist framework, the rich have continued to be rich, while the poor continue to remain poor. A variety of structural frameworks and government policies have contributed to sustaining this dispensation. The rich, for instance, have a lower tax rate in the US as compared to the working class. Historically, the rich used to pay a higher tax rate, but over time, this has reduced, and in the process, worked to sustain the Marxist narrative on the rich exploiting the poor and creating frameworks that sustain their power. Ingraham identifies that in 2018: 2024 – Write My Essay For Me | Essay Writing Service For Your Papers Online, the average effective tax rate paid by the 400 richest families was 23%, while the effective tax rate paid by the bottom half of the 300,000,000 plus Americans was 24.2%. This was in contrast to 47% paid by the 400 richest in the 1960s when their tax rate was at 56% and 24%-30% in the bottom half. The bottom half effective tax rate has not changed over time, but the effective tax rates of the rich have significantly reduced in the same period. These 400 households made a fraction of the top 1% with a combined wealth greater than the bottom half of Americans. Their multiplier effects were much more effective in the creation of wealth as such, allowing them to accumulate even more generational wealth in a shorter period compared to the lower half in their whole lifetimes combined.
Racism and Negatively Skewed Social Relations
Race and racial relations also have had a major part to play in perpetuating inequality. Part of the reason why inequality was sustained in the period after the second world war despite the increased inclusion of people of color into the labor force was hinged on racism. While there were expanding opportunities for men, women, immigrants, and even non-white workers, the US, through political and social policies on race, reserved its “most lucrative occupations to an elite class of white men” (Tankersley). These were people who were historically favored. As such, the majority of the power and power relations were skewed against people of color, women, and immigrant workers. Further sustaining poverty within these historically lower classed people.
Racism in the United States is present across all levels of society in different forms. Its consequences are far-reaching. While diversity in American society continues to create a dynamic relationship for all communities, it is increasingly becoming an important consideration in how society works and shapes its perspective. In the context of American society, racial diversity has been a key policy formulator in the economic, social, political, and cultural dynamic. All these key areas remain intertwined, continually gaining key frameworks from one another. Social development in American society is dependent on racial inclusion for all. Decades of slavery, racial segregation, and civil rights deprivation for people of color within the United States have continued to play a key role in depriving minority stakeholders of justified avenues for upward social mobility. Categorically, it has created and emphasized generational poverty due to lack of access to quality educational systems and funds for social development with equal distribution (Plotnick et al.). As such, society is complicit in the marginalization effect on minority people. Society plays a key role in ensuring poverty is restricted to race. It has also allowed education to be limited to class, thereby propagating the notion that not all people in the society based on their background can have access to quality education.
With a key focus on historical, social, and economic entities manifestation within the American racial space, this essay outlines how social development for most people of color has been restricted and continually denied equality for progression. This is in a bid to outline how racial disparity within the United States education system has played a key role in perpetuating minority poverty and inequality and the consequences resulting from it, such as a higher crime rate (Miller et al.). The result of racial disparities in the United States education system can thus be highlighted and seen by reviewing social mobility upwards by race and cross analyzing wealth and access to education across the country by race. Racial disparities within the educational systems effectively work to sideline people based on their socioeconomic standing, gender, and disability, the implicit nature of the United States society that fails to fully contextualize and atone for the effects of the racial discrimination within the society because it works to perpetuate the injustice and as such perpetuates racism as it introduces new generations into the corrupt morals. Racism also sustained social inequalities by barring generations from access to education and ensuring their offsprings would access the same further sustaining inequality.
Lack of parental knowledge in marginalized communities results in lower social, emotional, and behavioral competence. It worked to limit the cultural capital acquisition and perpetuating exclusion from a larger social trend Lack of inclusion within the general social and economic class perpetuates low levels of cultural capital, which results in even decreased educational success, consequently barring members of these communities from achieving social mobility (Desmond and Emirbayer) upward. Social inequalities act as a form of deprivation of cultural capital. It is hard for poor people and who reside in communities that continue to witness discrimination to gain the type of social capital that is valuable for their development within their society (Desmond and Emirbayer). While there is relatively greater access to education within the United States, members of the minority communities most impacted by racism and discrimination often fail to achieve educational success due to larger preexisting inequalities. Cultural capital is passed from one generation to the other. Also, access can allow students to gain valuable cultural capital. This implies that the lack of access to both results in a perpetual state of poverty.
Recommendations
Measuring the constantly rising phenomenon of income inequality revealed reliable findings on the problem. A striking insight is that the problem has been witnessed ever since 1980 in America and has risen rapidly throughout the nations. It has led to a slow income growth between different economic groups, especially people of color. The trend in wealth inequality focused on wealth and wealth accumulation as well as access to income. Gornick and Jäntti find the middle class, which has long made up the majority of the US population, finally dipped below 50 percent in 2015 – Research Paper Writing Help Service. History states that economic inequality is on the rise. This is due to social, political, and economic policies that fail to address the social injustices of the past and those persisting in the present. In the United States, the top 1% earns a larger income than the bottom 50% of the workforce. The American income has always boomed on top. The country has increased women and people of color participation in their workforce so as to curb inequality. However, the richest people are the men in the society, making up 85% of the labor income contribution (Gornick and Jantti 37). An analysis of the wealth ratios of different economies explains that wealth inequality among individuals has been influenced by a rise in private wealth (Keister 13). Public wealth has reduced to almost negative in the United States, limiting income redistribution, thus mitigating income inequality.
Causes of income inequality
1. The taxation policy of society has caused income inequality. In the US, the level of tax influences inequality because steeper taxes contribute to the equal distribution of income (Pastor and Veronesi 17).
2. Access to education also mitigates income inequality. High-skilled labor is highly demanded, and they are paid higher wages compared to the uneducated people in society. The widening disparity between the wealthiest and the poorest in the society has been influenced by the ability to access education (Seidel 10).
3. Information technology, alongside globalization, is the major cause of inequality. Arguably, growth in technology has rendered many people jobless because machinery and computers perform all tasks. It leaves the unskilled people unemployed or decreases the worker’s wage increasing the wealth gap between the rich and the poor.
4. Gender discrimination showed that there is a difference in the level of earnings between the male and female in the society. Such factors influencing gender equality led to a significant increase in the effects of the issue.
5. It led to a failure in a country’s democracy as well as an increased crime rate.
6. The less wealthy do not participate in the cultural, civic, and social forms of society.
7. Income inequality led to monopolization of labor because employers demanded fewer workers as well as a lack of competition.
A decline in the country’s economic growth and extreme levels of poverty made the country enact policies and programs to fight income inequality.
Possible Solutions:
⮚ The US should target income support policies and encourage employment as ways of mitigating income inequality. Access to employment and paid income would work to raise their living standards.
⮚ Public education was the best solution because it would increase skilled labor. Demand for skilled labor would therefore reduce wage inequality due to education differentials.
⮚ Better job training as well as providing access to formal education should be among the policies enacted to curb inequality. Elite colleges should have improved openness to accommodate students from poor backgrounds so as to increase access to formal education.
⮚ The country had recommended higher tax rates as a way of reducing economic inequality. Progressive taxation, where the richest people in the society are taxed more than the poor, would effectively reduce the wealth gap—reducing both post-tax and pretax by encouraging people with high income to capture a higher share of growth.
⮚ The US should focus on creating higher public wealth. Low levels of public wealth challenge a country’s attempt to solve inequality. The government has to possess resources recommended for investments in public social facilities without taxing the population. Gornick and Jantti identify that constantly outsourcing goods and services from a contract of a public nature to wealthy private individuals culminates in the transfer of public wealth to private individuals. Public to private wealth increases the gap between the levels of capital. Public wealth has gravely depreciated to close to zero in the US. It limits the ability to tackle the issue of income inequality and differences in wealth among individuals.
⮚ The US should implement policies aimed at eradicating poverty to reduce the difference in individuals’ well-being. Reducing poverty would provide household income as well as providing some earnings to the poor.
⮚ Fighting for gender equality and empowering women in a society controlled the difference between income earnings of men and women and expanding the labor force.
⮚ The country had to develop a global partnership for development, among other attempted solutions in fighting income inequality. It encouraged the unified movement of goods and people to enable exposure and access to jobs. The world economy can be unified by the internal exchange of goods, capital, and labor.
Policy Recommendations
Income inequality has posed a significant threat to the growth of an economy. If business continues as usual, wealth inequality between the working class and the rich will increase enormously. Shifting tax policies of a nation can tackle income inequality. Tax progressivity effectively reduces inequality in income as it reduces post-tax inequality and diminishes pretax (Ryscavage). Wealthy people with high income are given higher shares of growth by advocating for a pay rise and wealth accumulation. High levels of tax levied on social spending result in equal distribution of income across the nation. The tax and benefit policy requires every individual to be taxed at the same rate as the workers’ rights. However, this equity suggests that income tax should be taxed according to an individual’s earnings such that as income rises, tax increases. At very low income, no tax should be paid to promote equality in income of the rich and the poor. Progressive tax and tax benefits policy will take more tax from high-income earners and redistribute welfare to the poor (Pastor and Veronesi 32). Income earners pay tax basic tax, whereas high-income earners pay a higher tax rate. The direct tax policy will help reduce the wealth gap between the poor and the rich, thus reducing income inequality.
On the other hand, indirect taxes can be regressive because it means the proportion of tax levy decreases at levels of income. Indirect taxes widen the wealth gap because the burden of tax is poor. Moreover, the tax policy faces obstacles such as tax evasion. Tax havens hold more wealth totaling about 10% of the national gross domestic product. They pose difficulties in measuring the tax wealth and income of developing countries. As the taxable base increases, the tax rate also increases. The top tax rate impacts the level of income inequality directly in the society by increasing or reducing it. Moreover, the tax policy has initiated a debate on its role in mitigating or exacerbating income inequality. Economists argue that tax policy led to increased income inequality in the past during the post-World War II era (Newman). It is because taxation enabled the richest people in the United States to access capital, leaving out low-income earners. The US should move beyond data on tax to obtain accurate income and wealth. Nonetheless, tax evasion regulation can be installed to combat inequality because avoiding paying taxes cannot be evaded legally.

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