Income Inequality Drags down National Performance

Income inequality, generally referred to as a trend where incomes received by the rich are rising faster than those earned by people from the middle class and low-skilled workers, has been identified by many economists and social analysts as one significantly negative factor hindering the national development of the United States. Especially in recent decades since the 1970’s, the increasingly unfair income distribution has been arousing dramatic discussions due to its eroding effects in multiple fields related to institutional and individual survivals. Despite that some people see consequences of income shifts to the top class as overstated, this essay argues that extraordinary injuries are visibly being made and reducing stabilities of conditions of many key areas.

The growth of income inequality is setting varying levels of obstacles in major aspects of national development, ranging from economic progress, political democracy, social harmony, to the quality of life of a massive number of American citizens. Of the impacts left by the imbalance of shares of income, unequal economic chances serve as one significantly serious issue. The fact that the wealthy population keeps about 50% of their marginal incomes, with the rest of citizens saving merely 10%, is observed by one Economist as contributive to an annual fall of nearly 5% consumption, which is closely related to GDP (Alan Krueger 2012). This severe situation, addressed by David Cay Johnson as “spending cascade (David Cay Johnson 2014)”, meaning that highest-income earners trigger a rise of expenditures and affect those whose incomes remain unchanged, suggests outcomes of reduction of purchasing levels, unfair job opportunities, and higher unemployment rates. These elements create tensions to an already unstable economic climate.

Further, the uneven income distribution prompts unequal says, where the needs of the vulnerable group are more likely to be ignored by policies that favor financially stronger people. This tendency is playing as one driven force of a gradual political deterioration, which could eventually lead to a polarization of interests of American citizens if no effective responding measures are made. Undoubtedly, social construction is another sacrifice as the economic downturn, political strains, and other issues, such as unhealthy corporate operations, decreased rewards of minorities, jointly lead to a lower vitality. The adverse social phenomenon, when pronounced in separations among various communities and possessions of opinions indicating divisions at organizational and interpersonal spheres, brings harms to a normal personal life. Besides, a degeneration of humanity can be expected in that inequality of incomes adds difficulties concerning giving understandings towards demands and desires of others people in the social system (George Packer 2011).

It turns out growing disparities in incomes, a process where incomes flow more rapidly to the pockets of people occupying the top of the ladder, distorts and undermines the goal-reaching process of crucial fields in the United States. Warning signals in the economic sector, disadvantages caused to the political operation, as well as a social order that manifests a lack of mobility and damages to personal well-being, are evident proofs for the destructive nature of the imbalanced practice in earning incomes. It is no hard to predict that irreversible national consequences would be produced if no active coordination is ensured.