There is staggering inequality in the USA. The eight wealthiest men on earth control the wealth as much as half of the poorest of the global population. With such shocking global statistics, the problem in the United States is unamusing. Since the 1960s the income inequality has become worse. For instance, the rate of chief executive pay to worker wages shot from 20 to 1 to 303 to 1 in 50 years.
This needless income inequality gap has led to poverty, slow death of class mobility and health crises. While there is a consensus that America is an unequal country, there’s a deadlock on meaningful action to address the inequality.
How can America deal with this? There is no one particular response. Progress demands an approach that is multifaceted.
Below are ten suggestions on how to deal with the inequality:
- Combating discrimination and investing in women
Perception is wrong. It has contributed significantly to the expanding wealth gap in America. Investing in women is an equally great way to strengthen families and increases economic mobility. Educated women tend to have fewer, healthier children. This is a desirable way to alleviate poverty. This is a compelling reason to invest in women.
- Expanding access to capital and encouraging entrepreneurship
Microloans are an effective and creative way to deal with deal with inequality. It helps budding entrepreneurs to get started. Firms like Kiva have expanded access to credit on extremely generous terms for small business owners. The interest on their loans is zero percent. Entrepreneurship can create wealth.
- Reducing the social capital gap
Social capital can be defined as the aggregate of one’s social connections. People with extensive social networks and influential contacts are likely to get themselves more opportunities and create more business for themselves.
- Quality, affordable and accessible education
A country that is well educated can create wealth. Education is a very critical tool that the poor populace can rely on to ascend to higher social classes. Organizations that work to close the opportunity gaps have intimated that there is a need to invest in education especially among the young people.
The increase of cost of American colleges remains a significant challenge in fighting disparities and inequality in economic opportunities. If this issue is addressed, it will be a relief for many young American learners.
- Reforming the justice system
Having a criminal record can dent your life unfairly. Many young people are victims of the vicious cycle of poverty and crime.
There are an estimated 57,000 youthful people in juvenile detention and many more in the criminal justice system. Many of these have been incarcerated for non-violent crimes. There is a need to find a way of keeping them out of the system and helping them find their way back to productivity as members of the society.
- Tax reforms
Tax reforms are very instrumental in solving income inequality. A progressive tax regime would be one where the wealthiest folks pay hefty tax rates while the poorest pay low taxes. The gaping loopholes in the current tax regimes need to be checked out.
Sealing the loopholes and taxing capital gains and dividend income as regular income will fight income inequality.
- Building assets for working families
Better economic security for struggling working families can be guaranteed by policies that encourage lower cost of building assets and higher savings rates. Fresh programs that enroll workers into retirement plans and provide a federal match for a retirement savings accounts could assist low-income households to create wealth.
Access to low-cost financial services and home ownership is an important pathway to wealth and income equality.
- Ending residential segregation
High racial residential segregation in metropolitan regions has a strong correlations to significantly decreased levels of intergenerational upward mobility for all the residents in the area.
Segregation based on income especially the isolation of low – income households equally correlate significantly with decreased levels of upward mobility.
- Increasing the minimum wage
When poorly paid workers are given higher wages, they can get themselves out of poverty and add billions of dollars to the overall real income. Increasing the minimum wage leads to increased economic growth and influence employment positively.
- Legislation that is friendlier to labor unions
Laws that are friendlier to labor organizing would be a bonus. It superimposes the activities of existing unions and subsequently decreases inequality. Such laws when enforced have then the capacity to propel workers to economic prosperity.
Conclusively, if these policies are carefully implemented, there is the possibility of lifting working families out of poverty, supporting economic mobility and minimizing the growth of inequality. With the political goodwill of at the local, federal and state level, the enactment of these policies will lead to a consensus that inequality can be done away with.