Income Inequality

Income Inequality

By Carson Abrahamson

Income inequality is an issue that dominated, or plagued, the last election cycle. It had to compete with emails, climate change, and ISIS, but it was up there. Income inequality refers to the difference in income distribution amongst the general populous. In the United States, the gap between rich and poor has been growing; the rich make more compared to everyone else, proportionally. However, income inequality is not necessarily always a bad thing, and many of the drastic, oftentimes socialist, proposals to combat the difference between those on top and everybody else are oftentimes damaging and would provide more harm than they would provide benefits.

Upon first glance, a distinct gap between the fortunate and the less fortunate may seem like a bad thing. Sometimes, in truly extreme cases, where one or two individuals do own the majority of the wealth, there are disastrous results. America is not such an extreme case. In fact, America is oftentimes seen as the innovation hotbed of the world where those with the right mindset can create revolutionary products. Destroying the gap is not necessarily a good thing either. An economy where no one earns anything is an economy where there is no gap. Most will find one problem or another in that.

In America, as the wealth gap widens, the lifestyle gap shrinks. That might seem counter-intuitive, but look at a case like Apple’s. With the introduction of the iPhone and iPod, Apple had created a monopoly for themselves where their unique products like the iPhone and iPod, have, in effect, given them a sense of monopoly.  Apple figured that the best way to preserve their position of dominance was to lower prices rather than increase them, as demand would increase more than price would drop. Monopolistic profits signal to other ambitious entrepreneurs the wealth they could garner from entering new markets. Thus, as those at the top grow wealthier, luxury goods become common goods. For example, the price of a 50-inch plasma has fallen from $20,000  to less than $500 over the course of 15 years.

Senator Bernie Sanders would be the first to point out the income gap in any conversation, often exclaiming rhetoric about “the top 1%” or even “the top 1% of 1%”. In fact, he was one of the first figures to bring this issue to the mainstream attention. Sander’s main claim is that those on top are hoarding the wealth. Like a dragon hoarding his gold, the wealthy hide the money in their safe, never to be seen by the common folk again. That is simply not the case, as most of those with wealth actively search for ways to increase their wealth by investing in ways that actually stimulate the economy, not detract from it. Furthermore, Sanders speaks of the economy as if it were a pie where everyone deserves “their fair share”. In reality, our capitalistic economy is not a zero-sum game. That is, the pie can grow and new slices can be created.

In conclusion, it is true that a case can be made against the income inequality between the rich and the poor and everybody else. However, in our current state of living, I believe that the income gap is a much less pressing issue than other fundamental human right type issues.

"On the Issues: Income and Wealth Inequality." Bernie Sanders. N.p., n.d. Web. 11 Dec. 2016.

“How Income Inequality Benefits Everybody.” George F. Will. Washington Post., 25 Mar. 2015. Web. 11 Dec. 2016

"Capitalism Is NOT a Zero Sum Game!" Investor Junkie. N.p., 2014. Web. 11 Dec. 2016.

"Income Inequality | Inequality.org." Inequality.org. N.p., n.d. Web. 11 Dec. 2016.

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