According to a study conducted last year by the Oxfam Committee, the richest eighty-five individuals in the world are as wealthy as the poorest three and a half billion individuals of the world. Although I want to illustrate income inequality particularly in the United States, this statistic is quite alarming considering the global economic impact our country has on the world. The implied benefits of reducing income inequality in the United States is critical to the overall economic growth of our country. If the United States could reduce its inequality to the level of Canada, U.S. GDP would rise about 0.9 percentage points per year, a significant figure in economic growth for a single fiscal year. It is imperative that we begin to discuss
…show more content…
If we examine our country’s past economic trends, perhaps the last three decades, we can understand that recent trends in income inequality are not new to our economy. In some ways, we are back to the position we were in in the mid to late 1990s, where we can begin focusing on some long term trends that affect income inequality. Particularly, where middle class wages have remained relatively stagnant, while the wealthiest individuals continue to get richer. Although, overall our economy was rising we began to see some of the effects of income inequality. Advantages that our labor was enjoying went away because technology advancements and changes in labor laws affected our ability to leverage wages. Expert economic analysts suggest that during Obama’s presidency the U.S economy rose nearly 15% bigger than when he entered office in 2008. Indeed, Obama’s administration did stimulate the U.S economy and provide growth, yet he was still unable to completely address the issue. After placing special interest labor laws in place to protect labor, perhaps by placing a minimum wage worldwide, only then will domestic corporations consider bringing labor jobs back into the U.S.. An increase in taxes on corporate entities combined with strong labor unions could have a positive effect on shifting the flow of money towards middle and lower class …show more content…
Factors of production include four things: land, labor, interest, and capital. The first step to becoming a more productive economy is ensuring you have quantity and quality human capital, or labor. In poor countries individuals, businesses, and even entire industries are often stuck in low productivity activities. This is due to the absence of many critical conditions that would have enabled workers to learn new skills and get better jobs. Increasing efficiency through education, knowledge, and job skills is an advantage developed countries have over lower productivity countries. Organizational effectiveness, also known as technology, is the idea of combining labor and capital that you already have to increase efficiency is also important for productivity. Furthermore, improving access to business finance and liberalizing markets could increase productivity of capital, allowing small business and corporations to earn higher returns on their
If we examine our country’s past economic trends, perhaps the last three decades, we can understand that recent trends in income inequality are not new to our economy. In some ways, we are back to the position we were in in the mid to late 1990s, where we can begin focusing on some long term trends that affect income inequality. Particularly, where middle class wages have remained relatively stagnant, while the wealthiest individuals continue to get richer. Although, overall our economy was rising we began to see some of the effects of income inequality. Advantages that our labor was enjoying went away because technology advancements and changes in labor laws affected our ability to leverage wages. Expert economic analysts suggest that during Obama’s presidency the U.S economy rose nearly 15% bigger than when he entered office in 2008. Indeed, Obama’s administration did stimulate the U.S economy and provide growth, yet he was still unable to completely address the issue. After placing special interest labor laws in place to protect labor, perhaps by placing a minimum wage worldwide, only then will domestic corporations consider bringing labor jobs back into the U.S.. An increase in taxes on corporate entities combined with strong labor unions could have a positive effect on shifting the flow of money towards middle and lower class …show more content…
Factors of production include four things: land, labor, interest, and capital. The first step to becoming a more productive economy is ensuring you have quantity and quality human capital, or labor. In poor countries individuals, businesses, and even entire industries are often stuck in low productivity activities. This is due to the absence of many critical conditions that would have enabled workers to learn new skills and get better jobs. Increasing efficiency through education, knowledge, and job skills is an advantage developed countries have over lower productivity countries. Organizational effectiveness, also known as technology, is the idea of combining labor and capital that you already have to increase efficiency is also important for productivity. Furthermore, improving access to business finance and liberalizing markets could increase productivity of capital, allowing small business and corporations to earn higher returns on their