Rose Ellen
Mrs. Reese
Civics
December 8, 2018
How Inequality is a Threat to Democracy:
Rising income inequality in America reinforced by the growing gap between the rich and the poor is causing the disappearance of a middle class which represents the greatest threat to U. S. democracy.
The growing gap between the rich and the poor affects social and economic problems which result in education and economic inequalities. Often, those of us with less, will cut corners to obtain the things that are needed for survival and beyond that, do whatever is necessary to have the things that everyone else has; such as communicative electronic devices etc. The economy suffers when people buy used and not new. Healthcare is difficult to acquire also, for the less inclined. A poor diet which happens when people work long hours will reach for things like fast food just to get by because there is no time to prepare food at home; otherwise lose sleep; which happens anyway with most. Health suffers as a result and healthcare being unaffordable for some, eventually strains the entire healthcare system by doing whatever can be done to cure or relieve pain for all, whether affordable or not.
Those at the top of the distribution have seen their incomes increase. Tax cuts and big loop holes add more money to those few who can already afford anything and everything. Healthcare is viewed by some as a privilege and may only be enjoyed by those who can afford to have it; life and death notwithstanding.
Those with certain skills and abilities will often wind up with more than those without (Levin-Waldman, 2016). Rising income inequality breeds more inequality in educational opportunity, which generates greater inequality in educational attainment (Tyson, 2014). As with social and economic indifferences, educational means, directly and indirectly, affects the way the poor and rich manage in the workplace. If a high schooler, whose parents aren’t as capable of affording an ivy league education for example, as do the parents who have, wants to go to such a school or anywhere with a big tuition fee, the student would need to win scholarships via sports which would indicate the student would need to be athletically inclined or if a student excels in the academic arena etc. which needs no further explanation. It is important to point out however, that while a young college student can go to school at low cost, it’s limited and it becomes mostly unaffordable eventually, and must find other ways to acquire the degree. The folks at the top, can afford to send a child to a good school, and even with modest grades, do quite well in the workplace. As this trend continues, the poor are getting poorer and the rich are getting richer which causes the decline in the middle class.
Inequality is also fueling geographical segregation – pushing the homes of the rich and poor further apart (Porter, 2012). The high rate of income inequality among Americans results in segregation by class, race and ethnicity in neighborhoods and schools (Berliner, 2013). Crime exists when the at the lower end of the spectrum, people are forced to do whatever possible, to make ends meet; to feed themselves and their own, and to stay dry and warm; inside away from exposure. So, as a result, the people with means, will move away from the crime; away from the homeless and the obvious degradation of the city’s infrastructure. The poor cannot afford to move away to a more peaceful environment. The increasing Flat-line or lower salaries lead to much less social mobility.
The government’s failure to increase the minimum wage is another factor when explaining the reasons for the rich/poor gap. Jobs have been drastically cut and outsourced to countries around the globe where products could be manufactured for a cheaper cost. Thusly, management is not so inclined to raise salaries, even at the very bottom, where it is impossible to support oneself. And unions, once the engine of the middle class, have been diminished (Pittsburg Post-Gazette (PA), 2013). The unions have weakened by a lack of support, and management is prevailing, since the workers at the lower end are not being protected.
Income inequality contributes to political inequality. Once inequality becomes very acute, it breeds resentment and political instability, ending the legitimacy of democratic institutions. It can produce political polarization and gridlock, splitting the political system between haves and have-nots, making it more difficult for governments to address imbalances and respond to brewing crises (Porter, 2012). With a greater concentration of wealth at the top, elites are in a better position to use their wealth toward the attainment of their political and other ideological objectives (Levin-Waldman, 2016). The rich have both the incentives and the ability to promote policies that maintain or enhance their position (Laura, 2014). When politics is dominated by the wealthy, the interests of the wealthy are advanced with the interests of lower income and working families are ignored (Cha, 2013). In our current politics, most of the politicians have political contributions from the wealthy individuals and businessmen which influenced politicians in legislating laws in their favor. “Money makes the world go ‘round” as they say. Wealthy lobbyists offer bribes to senators that vote to change laws in the favor of the big business and corporations who hire them for that purpose. However, lawyers are often hired to speak before congress to help enact changes that may be both good and not so good for those of us that don’t have so much.
According to York, (2017), the popular contention that income inequality is turning our democracy into an oligarchy that serves only the rich is buttressed by several well-cited, but fundamentally flawed, academic studies. In fact, claims that rising income inequality threatens our democracy are unfounded. Claims that the widening gap between the top earners and the rest of society stanches economic mobility, for example, have not been proven to be true. There is no statistical evidence that the rich have accrued greater political power as their share of national earnings has increased. As long as there are those that will lobby for interests of the general population, not every law and legal institution in the land will fight on behalf of what might be construed as the wealthy’s interests.
In later work Attanasio and Pistaferri (2016) point to further evidence that income and consumption inequality have increased at similar rates in the United States arguing that the increase in income inequality is mirrored by greater inequality in the well-being of American citizens. Studies of income inequality usually are based on measures of disposable income that reflect the effects of government taxes and transfers, Peterson, (Levin-Waldman 2016) Corporations will pay a lesser percentage of tax to stimulate economic growth. However, is not it true that that the lower tax brackets pick up the slack and thereby the burden?
The argument that rising inequality threatens democracy hinges on three interlocking claims: The upper, middle, and lower classes have divergent policy priorities. While the rich seek to cut social welfare programs and lower taxes, the middle class and poor seek to buttress the social safety net, while shifting more of the tax burden to the upper class, York (2017). The argument that there should be flat tax system seems a good one but in big elections years it loses steam.
Even when they do disagree, studies show that the influence of the upper and middle class is nearly identical. When high and middle-income earners prefer opposing policies, the policy preferences of high earners are enacted about half of the time on the average, York said.
While it is true that the income gap is widening and campaign contributions are increasing, the influence of these factors on macro-level policies like income tax rates is not clearly supported by academic research. First, it is not clear what the richest 1 percent want. Second, to the extent that we assume in the absence of strong polling data that the richest 1 percent and the top percent of income earners have equivalent policy preferences, it does not appear either that the class divide is particularly stark or that policymakers respond more strongly to the affluent than does the population at large, York said. A friend of my dad says that the wealthy, and the corporations they lead can help the needy better than government services can because they are better organized and have a greater interest to do so (maybe through things like foundations; my dad says.) but left to an individual or a small wealthy group, do they give; and to what extent?
The assumption that wealth inequality is a threat to democracy is neither plausible. The wealthy includes the supporters of both the right (the Koch brothers, Sheldon Adelson) and the left (George Soros, Tom Steyer) (Pippenger, 2015). The implication here is that these billionaires don’t present a special class of the ultra-powerful that threatens democracy — either because their opposing views cancel each other out, or because, coming from the right and the left, they represent the full spectrum of political opinion in America, Pippenger said.
According to Angus, (2016), I do not see inequality as harmful in and of itself; my well-being does not change simply because someone else gets better or worse off. Inequality is sometimes just another word for incentives; those whose innovations make us all better off are often rewarded with great riches, and it is hard to see why this is socially destructive in and of itself. The dangers of inequality are in its instrumental effects, and is those that our threatening our future.
Extreme income inequality in the United States must be addressed by the federal government. Government must have the political will to reduce or reverse income inequality, like increasing the minimum wage, fixing the loophole in the tax code to close the gap between the rich and poor, reducing student loan interests, investing in education, modernize infrastructure and ending stagnant wages and long-term unemployment. Government policies must also be revised to strengthen the labor workforce increasing union membership for low and middle-income Americans, provide affordable health care and housing. To reduce political inequality, reform should be made on campaign finance and financial regulations in certain industries to limit the influence of the affluent on politics.
If entrepreneurs invest and workers improve their skills to improve their lot in life, a government that heavily taxed the rich to give to the poor could destroy that incentive and stymie economic growth that benefits everybody (Porter 2012)
In summary, it has been almost 40 years since Reaganomics or the “trickle-down theory” went in to effect to stimulate economic growth by allowing for corporations to gain financial freedom in order to further their products and wares to the greater population. The theory is when there is more financial freedom at the top, the money will trickle down and be enjoyed by the greater population. Maybe it works; maybe it doesn’t work as much as we’d like. My great grandfather from France would always say: “What goes up, must come down.” There are cycles; bear markets and bull markets (lean and fat).
Success in the implementation of the change in government policies necessitate the civic participation and trust from the government, politicians and the people.