Income Inequality

Income inequality is defined as the degree at which income is distributed in manner that is uneven among a given population. It is important to care about this issue because income inequality in the United States has been proven by the widening gap between the rich and the poor, and this is not good for the economy. There is always a division of individuals into classes as a result of the inequality, and this inhibits a balance in the living standards within the economy. Essentially, the American dream calls for equality of all Americans as well as upward social mobility for all the Americans. The American dream is anchored on upward social mobility for all individuals, but is always highly threatened by increasing levels of income inequality that subsequently leads to the economic stagnation of lower class individuals.


Argument Definition

Income inequality has constantly been rising in the past decades. In regard to the past thirty years, the income of the individuals at the top has highly increased by 154%. Comparatively, the wages of the individuals at the bottom who represent 90% of the total population has only increased by 17%. Income inequality is an issue of concern as economists in addition to social scientists provide an assertion that income inequality results into unequal access to various opportunities as well as the access to resources including nutrition and education. That is, the children that are born from poor backgrounds with very little hope of evading poverty themselves end up not attaining an upward mobility thus failing the American dream.

Income inequality emanates from both national and global factors that make it difficult for individuals in the lower classes to access resources as well as opportunities to upgrade their lives. From a macroeconomic perspective, the unpredictable economic factors at the national and global level ensure have the possibility of ensuring that the economic ladder is moving more far apart between the upper class and the lower classes hence making it difficult for the poorer to rise. The opportunities that are expected to lead to upward mobility especially among the poor as stipulated by the American dream disappears considering the fact that the economic ladder fails to favor the poor in addition to the middleclass individuals hence widening the gap in income distribution further. The rising level of inequality is negating the mobility of individuals as demonstrated below.



According to proponents, it can be said that income inequality has contributed to the failure of the American dream. To begin with, when economic growth is highly concentrated on the wealthiest individuals in America, the rest of the Americans highly suffer as a result of stagnation apart from failing incomes . Furthermore, as income inequality increases, a large number of the poor individuals in the American society tend to give birth to more children. Consequently, they fail to achieve an upward social mobility as they are not in a position to adequately take care of their children through the provision of good education to these children. In this case, only the wealthiest individuals are able to invest in the education of their children in addition to their overall development. Additionally, economic growth highly depends on the consumption of the middle class. Therefore, when income inequality increases, most Americans are left lagging behind hence making the economy more volatile. There has been a slow-down in upward mobility especially among children emanating from middleclass families as illustrated below.



On one hand opponents reiterate that income inequality has positive implications on the economy of the United States and has not impaired the American Dream. First, income inequality is a representation of a dynamic as well as a robust economy that essentially helps every individual in the society regardless of their economic status. Therefore, opponents state that income inequality dos not impair the American dream. This is because as the wealthier individuals in the American society continue to gain more as far as income is concerned, it does not automatically imply that the poor have to make losses as a result of their gain. Despite the fact that the wealthiest individuals benefit the most because of economic growth, it is important to note that the living standards of a large number of Americans have improved this providing evidence of an upward mobility stemming from income inequality. Comparatively, the lives of a large number of Americans have improved as compared to the past few years. Second, a thriving economy requires the aspect of income inequality. It is the wealthiest individuals America who take the risk of investing in innovation consequently benefiting every individual in the society. Economists have discovered that despite the fact that income inequality has increased in the United States, there has been no significant change in social mobility since the 1970s. Moreover, research provides that high income inequality and low mobility have are not related to each other in any way. More so, opponents hold the view that income inequality cannot be entirely blamed for the impairment of the American dream as other factors such as high levels of unemployment have the capacity to impair the dream. They argue that when more people are unemployed, they lack the basic resources that are needed in ensuring that their lives are improved. Thus, achieving an upward mobility becomes difficult for the individuals that are unemployed. Blaming income inequality alone would not suffice the factors leading to the collapse of the American dream based on the views of opponents.

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Impact on the Economy if Either Side is Right

The impact on the economy in case proponents are right is that there will never be attainment of equality in the economy because of the potential stagnation of the poorer members of the population. In essence, the cycle of poverty would be even higher and there will be no opportunity when the American dream can be realized easily with the dominance of the upper class of individuals. On the other hand, in case opponents were right, there would be a positive impact on the economy because of the opportunity to explore other avenues to lead to the attainment of the American dream. For instance, there would be avenues for the creation of employment that would help bridge income inequality.

Connection to Class

The issue of income inequality impact on the American dream fits perfectly into the models learnt in this class. The issue specifically corresponds to the Pareto principle on income and wealth distribution where it is clearly revealed that only a few individuals own and control resources within the economy. It is vital to note that the wealth of the society is controlled by individuals in positions of influence and upper classes as opposed to lower class individuals.


In conclusion, many individuals have pointed an accusing finger at income inequality as an impairment of the American dream. However, it is important to look into the issue of income inequality both on the positive and negative side with a view of clearing the air in line with the blame that is levied against it. A critical insight into issues such as racism, unequal access to education and an increased rate of employment provides that income inequality cannot be blamed for the impairment of the American dream but rather the factors mentioned above play a huge role in impairing the American dream.