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Economic Inequality and the Cycle of Poverty

Updated on January 2, 2018
Patrick Patrick profile image

Patrick has been working as a freelance writer for the past 3 years

Introduction


The economic gap between the wealthiest and the vast majority has been shown to be stunning. In the united states, for instance, 2010 statistics found the wealthiest 1 percent to own 35 percent of all the nation's wealth, making them 288 times richest as the average American. One of the factors that have been reported to contribute to this is that the wealthy, despite owning the most wealth are paying less tax in comparison to the ordinary American. 46.2 Million of the American population (15 percent) live in poverty with the rate of poverty being higher for children under the age of 18 (21.9 percent of the children living in poverty) that is 1 in 5 children. While the Bill Gates, one of the richest men had a net worth of about $67 billion in 2011, the poverty threshold for a family of five at the time was $27,517. Since 2009, according to a study conducted in 2013, the average income for the bottom 99 percent of the Americans has fallen by 0.4 percent while that of the top 1 percent rose by 11.2 percent. On the other hand, in 2012, the net worth of the richest 1 percent was more than that of the bottom 95 percent combined.

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Statistics


According to the statistics, the wealthiest individuals on the Forbes 400 list had more wealth than the bottom 150 million Americans combined, which shows the significant gap between the richest and ordinary Americans. By looking at the disparities between the average worker and corporate CEOs, it is also possible to see the extent to which economic inequality has risen. For instance, between 1979 and 2011, the compensation of CEOs rose 725 percent while that of the average worker only rose by 5.7 percent. Such factors contribute to the significant gap differences between the wealthiest 1 percent and the average Americans. A good example is that of such a company as Wal-Mart. While the CEO earns over $16,270,000, the average worker at the company only earns $22,700.

Some of the countries with the worst income inequality include:

Chile

Turkey

United States

Mexico

Women and Black Americans


The economic difference is also seen between races and gender. According to statistics, it was shown that white Americans have twenty two times more wealth as the blacks and 15 times more than the Hispanics. In 2011, women earned about 77 percent of what men earned. Given that most of the statistics used to compile this report are relatively recent, it is evident that they represent the reality of economic inequality of the day, which is a worrying fact.

Some of the fastest growing industries include:

Home health care services

Information services

Individual and family services

Young

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Conclusion


While undoing this status quo (inequality) is easier said than done, young people are advised to not only save their money but invest in projects that will remove them from the cycle. One of the biggest issues among a good number of young people today is that they want to live the “good life” as represented in entertainment media. As a result, they are spending more than they earn on various luxuries mostly to show off. In doing so, they are spending way too much money that could otherwise be used to start small on projects that could see them building big businesses and in turn creating employment. For most speakers that I have listened to here in my country, given that young people may not have enough money/funds to start up projects, there would be nothing wrong with teaming up with like-minded individuals to try and build something worthwhile. By saving up and brainstorming on how to make a given project successful, it is possible for many young people to remove themselves from the cycle of poverty that continues to affect many. This becomes even more evident when considering the many stories of young Americans who have established great businesses either as individuals or in collaboration with other like-minded people.

© 2018 Patrick

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    • Patrick Patrick profile image
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      Patrick 3 months ago from Nairobi

      Source: Ethics: Theory and Contemporary Issues 9th Edition

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