Inequality in Contemporary America


Conversations on inequality particularly at the socioeconomic level have been common in the public sphere in the 21st century in the United States (Carter and Reardon 1). It is due to the fact that in the most advanced and emerging markets and developing countries (EMDCs) including America, its level has risen that has led to the increased attention to the issue. For instance, with regard to higher income inequality, President Obama described it as the “defining challenge of our time” (Newell). Inequality indicates the lack of income mobility and opportunity (Dabla-Norris et al. 4). Moreover, it is considered to be reflecting a permanent disadvantage for particular groups in the American society and has a significant negative impact on the growth and stability of the economy (Dabla-Norris, Kochhar and Suphaphiphat 4). Additionally, it has the ability to concentrate both the political and decision making power in the hands of a few individuals in the society that may result in the suboptimal allocation of the existing resources (Dabla-Norris et al. 4). It also leads to political and economic instability that may reduce investments and raise the risk of crisis (Dabla-Norris et al. 4). Based on the mentioned above facts, one can assume that inequality has a negative influence on America, in particular if it concerns gender, race, income, and education.

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Gender Inequality

Regardless of the social class, significant systematic gender differences and inequalities exist although the level of inequality varies across various countries (United Nations 162). As a result, gender inequality is considered to be a characteristic of most societies with men often being better positioned in relation to the social, political, and, economic hierarchies than women (United Nations 162). Currently, in America, just like in many other states all over the world, there are changing relationships related to gender, and the given kind of inequality between males and females is being questioned in almost every sphere – at work, at home, and in public affairs (Ridgeway). However, the existing facts indicate that there are still permanent gender gaps even in the face of the socioeconomic transformations and concerted efforts to challenge the subordination of women (Ridgeway). Such a situation is associated with various deleterious outcomes which are discussed below based on the gender role hypothesis.

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The current literature on gender composition provides the hypothesis that the fewer the number of women in a group, the lower their participation and influence (Karpowitz et al. 2). The stereotype has appeared due to three basic reasons and led to a few negative consequences. First, the numerical minority reduces the status of females in a group and their authority (Karpowitz et al. 2). This gives men a sense of entitlement, and hence, women take fewer leadership positions and have less influence in the society. Second, gender inequality places the females at a disadvantage in political discussions (Karpowitz et al. 2). Therefore, men are, in the long run, deemed to have greater competency and enjoy higher status. Owing to this, politics is perceived as a masculine undertaking; therefore, women have a decreased likelihood of expressing their opinions, persuading others, and controlling information (Karpowitz et al. 2). Finally, females speak less in the presence of fewer women as the gender norms in interactions are different depending on the gender composition, and this promotes or hampers the participation of women (Karpowitz et al. 2). The idea here is that girls and boys get used to different cultural ways of communication, and these are carried into adulthood. Therefore, women are more confident among their fellow females and have their stereotypical feminine norms of interaction and experience discomfort when in masculine settings (Karpowitz et al. 2). For instance, in Colorado and many other states, there are predominantly male legislative committees that feature very competitive and aggressive means of communication (Karpowitz et al. 2). This prevents women from participation in the work of these organs, hence, the views and demands held by men are the ones taken into consideration.

Racial Inequality

America has been considered to be unique in terms of the relationships related to race. This is primarily owing to the fact that it has erased the mixed-race classifications and assigned everyone who had an apparent African ancestry as being black (Bailey et al. 736). The other extreme of this division is the Latin American nation. Racial and ethnic inequality is ongoing and pervasive in the USA, and the American government has not done much to address the problems and negative outcomes caused by it.

To start from, in the U.S., there is significant racial profiling. This is the practice that law enforcement agencies in the country employ. It is founded on race, ethnic background, nationality, religion, and/or the perception of the person’s immigration status (American Civil Liberties Union 1). The mentioned authorities conduct investigations, stop, search and frisk individuals, or use excessive force against them on the basis of subjective personal traits instead of concrete evidence of their engagement in behavior that is considered to be unlawful (American Civil Liberties Union 1).

Furthermore, according to a 2016 study by Cosmas-Diaz, the term “racial trauma” was coined so as to clearly capture the negative physical and mental impact of racism and discrimination (Turner and Richardson). It usually comes from racial harassment, seeing racial violence, or experiencing institutional racism. The given trauma may lead to depression, low esteem, anxiety, humiliation, low levels of concentration, and irritability (Turner and Richardson). It also results in increased rates of vigilance and suspicion, sensitivity to threats, psychological and physiological symptoms, alcohol and substance abuse, aggression, and narrowed sense of time.

Moreover, presently, African Americans are disproportionately burdened with regard to morbidity, mortality, disability, and injury associated with diseases (Mays et al. 202). They are at a significantly greater and consistent risk of early death compared to the White Americans of the same age (Mays et al. 202). The social inequality in this case is reflected in the existing differences in the ability to access healthcare services, variations in the behavior of healthcare providers, dissimilarities in socioeconomic position, and residential segregation (Mays et al. 2013). From the point of view of racial inequalities and discrimination, the causal mechanism that links the racial/ethnic minority status and the health disadvantage is grounded on the deleterious outcomes of the negative experiences connected with racial discrimination. Such cases set in motion psychological responses, for example, increased blood pressure and heart rate, higher production of biochemicals, and hypervigilance (Mays et al. 203). These responses result in increased incidence of diseases among the minorities and higher mortality rates. All in all, this continuous legacy of poor health among Black Americans and other ethnic minorities regardless of the improving health and life conditions stresses the need to conduct a closer investigation of the role racial inequalities and discrimination play (Mays et al. 203).

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Income Inequality

Inequality in wealth and income, specifically the perceived increasing gap between the poor and the rich, has been an aspect of public debate for a long time (Karageorge 1). In America, over ? of the workers earn an hourly wage of less than $10 that is way below the federal level of poverty (Amadeo). These individuals are described as “the people who wait on you every day: cashiers, fast food workers and nurse’s aides. Or maybe they are you” (Amadeo). On the other hand, the top 10% earners in the country earned 50% of the nation’s income in 2012 which was the highest percentage for the last century since the corresponding data began being collected, and the top 1% earned 20% of the nation’s total income (Amadeo). Obviously, this raises questions regarding the social and economic equity in the state. Moreover, economists argue that excessive inequality is harmful to the growth of the economy and can contribute to high levels of public indebtedness that may result in financial crises.

Income inequality has several negative effects for any country including the USA. One of the outcomes is the hampering of poverty reduction as inequality adversely impacts the rate at which the economic growth enables the decrease of poverty level (Dabla-Norris et al. 9). Achieving economic development in situations where there is high rate of inequality or where the patterns of distribution of wealth favor the already wealthy is impossible (Dabla-Norris et al. 9). Further, the extent to which economies are subjected to various types of economic shocks undermining their growth means that greater level of inequality makes the populace highly vulnerable to poverty (Dabla-Norris et al. 9). Moreover, income inequality results in the development and implementation of policies that hurt the drivers of economic development (Dabla-Norris et al. 9). For instance, it may result in backlash against economic liberalization and fuel protectionist pressure against globalization and reforms that are market-oriented (Dabla-Norris et al. 9). Similarly, the increased authority and power of the non-poor leads to a limited provision of public goods which in turn boosts growth and production in a disproportionate way that affects the poor (Dabla-Norris et al. 9). Finally, inequality hampers investment by promoting economic, financial, and political instability in several ways (Dabla-Norris et al. 8). First, it provokes financial crises, and there is significant amount of evidence highlighting that the increasing influence of the wealthy individuals in the American society and the low income of the poor and middle class individuals have a causal relationship to such financial issues (Dabla-Norris et al. 8). This, therefore, impacts the long term and short term growth. The prolonged periods of great inequality are linked with the global financial crisis due to the intensification of leverage, credit overextension, and relaxing the standards of mortgage-underwriting including financial through lobbying (Dabla-Norris et al. 8). Second, global imbalances where top income together with the financial liberalization as a response to the rising inequality are tied to greater external deficits (Dabla-Norris et al. 9). This challenges the stability (financial and macroeconomic), hence, growth. Lastly, clashes where extreme cases of inequality destroy the trust and cohesion (social) lead to conflicts that discourage investments.

Education Inequality

Education is considered to be the gateway for accessing different opportunities and a pathway through which individuals acquire knowledge, skills, and experiences (Reyes 7). These are then used for entrepreneurship and getting employment that ensure prosperous future. However, in America, education is significantly unequal, and average students that come from minority backgrounds, immigrants, and those that are disadvantaged economically either drop out of school, get fewer degrees and certificates and display lower academic skills compared to their privileged peers (Reyes 7). It has been alluded that countries globally have become aware of the existing segregation in American schools and the inequalities in a similar manner as to how they have come to understand Apartheid in South Africa and other practices through the media (Reyes 6). However, the current complexities of such segregation in the educational field are often not known to the world. Consequently, some of the present schools represent extremely marginalized communities.

Undoubtedly, educational inequality has deleterious effects on the U.S. citizens and the entire nation. Income distribution has been found to be tied to the average level of education of the population. Therefore, a decreased level of education means that the proportion of individuals that are uneducated will have a poorer income distribution (Burd-Sharps et al. 215). Hence, educational inequality leads to income inequality that, in turn, promotes poverty. Furthermore, the quality of education received by the less previleged is lower than that of the more previleged (Burd-Sharps et al. 216). Inequality also exists with regard to gender education as women are disproportionately educated compared to men in America. The negative impact of tsuch a situation is that this is translated in the job market where there is an income inequality that is gender-based (Burd-Sharps et al. 216).

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The Positive Influence of Inequality

However, despite the existing extensive research and evidence as the presented above, inequality on the other hand, has been found to have a positive impact (Petersen and Schoof 1). For instance, facts exist that indicate that income inequality has growth promoting effects, and these include providing incentives for strong economic performance and investment ones through personal human capital (Petersen and Schoof 1). In addition, it encourages risk taking that also encourages investments (Petersen and Schoof 1). The development is influenced by various mechanisms that, first of all, include those that are presumed to have greater potential of saving among the better financially endowed population which is embodied within the classical and neoclassical models of economic growth. Considering stated above, increased inequality results in a higher level of aggregate saving, hence, increased rates of development and investment (Castells-Quintana and Royuela 7). In a more modern approach, a related mechanism is reliant on the presence of large costs of investment or indivisibilities inherent in investments as assumed as in the imperfections in the capital markets approach. Under such indivisibilities, a greater level of inequalities allows greater aggregate investments (Castells-Quintana and Royuela 8). Furthermore, differentiating the outcomes of inequality from the opportunities of inequality for both the classical and modern perspectives, it is acknowledged that inequality has growth enhancing effects (Castells-Quintana and Royuela 8). They are related to the incentives for accumulating capital and for innovation, engagement in hard work and taking risks, and the agglomeration of economies.


Inequality in America remains to be the highest among the industrialized nations globally. It can be witnessed in various domains, in particular gender, racial, education, and income, and each of them has unique adverse effects on the individuals and the society. These negative outcomes range from lower participation in societal activities, racial profiling, poor healthcare services, and wealth disparities to income inequalities due to disproportionate access to education. However, while the adverse impact of the inequality is prevalent and conspicuous, there are also some significant positive outcomes that are often ignored. Therefore, inequality has both growth promoting and development hampering effects, but all in all, the negative impact on the economy of the US prevails.

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