As the United States approaches another pivotal election season, economic inequality remains a critical issue on the minds of voters. The widening gap between the wealthy and the rest of the population has significant implications for the country’s social and economic stability. This article examines the current state of economic inequality in the U.S., using hard statistics and insights from various experts, and explores the contrasting proposals and views of former President Donald Trump and President Joe Biden on economic policies, race, immigration, Roe v. Wade, and religion. Understanding these differences is essential for voters as they head to the polls, with the future of economic justice hanging in the balance.
The Current State of Economic Inequality
Economic inequality in the U.S. is stark and growing. According to data from the U.S. Census Bureau, the Gini index, which measures income inequality, reached 0.489 in 2022, one of the highest levels in recent decades. This index ranges from 0 (perfect equality) to 1 (maximum inequality).
Income Disparities
- Top 1% vs. Bottom 50%: – The share of total income going to the top 1% of earners has increased significantly. In 2021, the top 1% earned about 20.3% of total income, up from around 11% in 1980. Conversely, the bottom 50% saw their share of income drop from 20% in 1980 to around 12% in 2021. To 2024 the tendency continues.
- Wealth Inequality: Wealth inequality is even more pronounced. The top 10% of households now own nearly 70% of the country’s wealth, while the bottom 50% hold just 2%.
Causes of Growing Inequality
Several factors contribute to the increasing economic inequality in the United States:
- Technological Advancements: – Automation and digital technologies have disproportionately benefited high-skilled workers, leaving low-skilled workers behind. According to MIT economist David Autor, “the fall in the real earnings of men without college degrees is largely attributable to technological change.”
- Globalization: – The outsourcing of manufacturing jobs to countries with lower labor costs has reduced middle-class job opportunities in the U.S. Economist Branko Milanovic notes, “globalization has significantly contributed to the rising income inequality within developed countries.”
- Policy Decisions: – Tax policies favoring the wealthy, deregulation, and weakening of labor unions have also played a role. Nobel laureate Joseph Stiglitz argues, “our political system has increasingly been working in ways that increase inequality.”
Implications of Economic Inequality
- Social Mobility: – Economic inequality hampers social mobility. Research by Raj Chetty and colleagues shows that children born in the bottom quintile of the income distribution have a lower chance of moving up the economic ladder compared to those in other developed countries.
- Political Polarization: High levels of inequality can lead to political instability and polarization. Political scientist Larry Bartels highlights that “economic inequality is eroding trust in democratic institutions and fueling political divisiveness.”
- Health and Social Outcomes: – Inequality is linked to poorer health and social outcomes. A study by the Brookings Institution found that higher income inequality correlates with lower life expectancy and higher rates of social issues such as crime and teenage pregnancy.
Trump’s Proposals and Views
During his presidency, Donald Trump implemented several policies that he argued would spur economic growth and benefit all Americans, though critics contended they disproportionately favored the wealthy:
Tax Cuts: – The Tax Cuts and Jobs Act (TCJA) of 2017 significantly reduced corporate tax rates and provided tax cuts for individuals, with the largest benefits accruing to the wealthiest Americans. Trump argued this would stimulate investment and job creation.
Deregulation: – Trump emphasized deregulation across various sectors, arguing that reducing regulatory burdens would boost business growth and, consequently, the economy.
Trade Policies: – Trump’s trade policies, including tariffs on Chinese goods, were aimed at protecting American jobs. However, these policies had mixed impacts on different sectors and did not significantly reduce inequality.
Biden’s Proposals and Views
President Joe Biden has taken a different approach, focusing on policies aimed at reducing inequality and supporting the middle and lower classes:
American Rescue Plan: – This $1.9 trillion stimulus package, passed in March 2021, included direct payments to individuals, extended unemployment benefits, and expanded the “Child Tax Credit” which significantly reduced child poverty.
Tax Reforms: – Biden has proposed increasing taxes on the wealthiest Americans and corporations to fund infrastructure and social programs. His administration aims to ensure that the wealthy pay their fair share.
Infrastructure and Social Spending: – “The Infrastructure Investment and Jobs Act” and proposed Build Back Better plan include significant investments in infrastructure, education, and healthcare, aimed at creating jobs and reducing economic disparities.
Race
Trump’s Views
Racial Inequality: – Trump often emphasized law and order, particularly in response to protests against police violence. Critics argue that his administration did not sufficiently address systemic racism.
Policies: – His administration rolled back several affirmative action policies and initiatives aimed at reducing racial disparities.
Biden’s Views
Racial Inequality – Biden has acknowledged systemic racism and emphasized the need for comprehensive reforms to address racial disparities.
Policies – His administration has focused on initiatives to promote racial equity, including criminal justice reform and investments in minority communities.
Immigration
Trump’s Views
Immigration Policies – Trump’s administration implemented strict immigration policies, including the travel ban on several Muslim-majority countries, the construction of a border wall, and the separation of migrant families.
Rationale – Trump argued these measures were necessary for national security and protecting American jobs.
Biden’s Views
Immigration Policies – Biden has taken a more lenient stance on immigration, reversing many of Trump’s policies. He has emphasized a path to citizenship for undocumented immigrants and humane treatment of asylum seekers.
Rationale – Biden argues that immigration reform is essential for economic growth and maintaining the country’s values of inclusivity and diversity.
Roe v. Wade
Trump’s Views
Abortion Rights – Trump appointed conservative justices to the Supreme Court, which ultimately led to the overturning of Roe v. Wade in 2022.
Policies – His administration supported restrictive abortion laws and defunded organizations that provide or promote abortion services.
Biden’s Views
Abortion Rights – Biden supports reproductive rights and has condemned the overturning of Roe v. Wade. His administration is working to protect access to abortion services through federal legislation and executive actions.
Policies – Biden’s policies include ensuring access to contraception and reproductive health services.
Religion
Trump’s Views
Religious Freedom – Trump positioned himself as a defender of religious freedom, particularly for conservative Christian values. He supported policies allowing religious organizations to receive federal funding and exemptions from certain laws.
Policies – His administration supported religious exemptions to healthcare mandates and other regulations.
Biden’s Views
Religious Freedom – Biden supports religious freedom but emphasizes a balance between protecting religious rights and upholding civil rights for all individuals.
Policies – His administration focuses on preventing discrimination while ensuring that religious groups can practice their beliefs without infringing on others’ rights.
Looking ahead
The trajectory of economic inequality in the U.S. will depend on various factors, including technological advancements, policy responses, and global economic trends. Some experts argue that without significant policy interventions, inequality will continue to rise. However, there is also a growing movement advocating for measures such as progressive taxation, increased minimum wages, and stronger social safety nets to mitigate this trend. As economist Thomas Piketty suggests, “we need to rethink our economic policies to address the growing inequality, or we risk undermining the foundations of our democracy and economy.”
Social inequality in the United States is a complex and multifaceted issue with significant implications for the future. While the current trends are concerning, understanding the causes and potential solutions can help policymakers and society address this critical challenge. The contrasting approaches of Trump and Biden highlight the ongoing debate over the best path forward. The path forward will require concerted efforts to ensure a more equitable distribution of resources and opportunities.
—
For The Yucatan Times
Jose E. Urioste
CDMX, June 24, 2024
—
Sources
- U.S. Census Bureau, “Income and Poverty in the United States”
- Economic Policy Institute, “The State of Working America Data Library.”
- Federal Reserve, “Survey of Consumer Finances.”
- David Autor, “Work of the Past, Work of the Future,” MIT.
- Branko Milanovic, “Global Inequality: A New Approach for the Age of Globalization.”
- Joseph Stiglitz, “The Price of Inequality.”
- Raj Chetty et al., “Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States.”
- Larry Bartels, “Unequal Democracy: The Political Economy of the New Gilded Age.”
- Brookings Institution, “How Increasing Income Inequality is Dampening U.S. Economic Growth, and Possible Ways Forward.”
- Thomas Piketty, “Capital in the Twenty-First Century.”