by Robert Reich, Monday, May 12, 2014
Some inequality of income and wealth is inevitable, if not necessary. If an economy is to function well, people need incentives to work hard and innovate.
The pertinent question is not whether income and wealth inequality is good or bad. It is at what point do these inequalities become so great as to pose a serious threat to our economy, our ideal of equal opportunity and our democracy.
We are near or have already reached that tipping point. As French economist Thomas Piketty shows beyond doubt in his “Capital in the Twenty-First Century,” we are heading back to levels of inequality not seen since the Gilded Age of the late 19th century. The dysfunctions of our economy and politics are not self-correcting when it comes to inequality.
But a return to the Gilded Age is not inevitable. It is incumbent on us to dedicate ourselves to reversing this diabolical trend. But in order to reform the system, we need a political movement for shared prosperity.
Herewith a short summary of what has happened, how it threatens the foundations of our society, why it has happened, and what we must do to reverse it.
What has Happened
The data on widening inequality are remarkably and disturbingly clear. The Congressional Budget Office has found that between 1979 and 2007, the onset of the Great Recession, the gap in income—after federal taxes and transfer payments—more than tripled between the top 1 percent of the population and everyone else. The after-tax, after-transfer income of the top 1 percent increased by 275 percent, while it increased less than 40 percent for the middle three quintiles of the population and only 18 percent for the bottom quintile.
The gap has continued to widen in the recovery. According to the Census Bureau, median family and median household incomes have been falling, adjusted for inflation; while according to the data gathered by my colleague Emmanuel Saez, the income of the wealthiest 1 percent has soared by 31 percent. In fact, Saez has calculated that 95 percent of all economic gains since the recovery began have gone to the top 1 percent.
Wealth has become even more concentrated than income. An April 2013 Pew Research Center report found that from 2009 to 2011, “the mean net worth of households in the upper 7 percent of wealth distribution rose by an estimated 28 percent, while the mean net worth of households in the lower 93 percent dropped by 4 percent.”
Why It Threatens Our Society
This trend is now threatening the three foundation stones of our society: our economy, our ideal of equal opportunity and our democracy.
The economy. In the United States, consumer spending accounts for approximately 70 percent of economic activity. If consumers don’t have adequate purchasing power, businesses have no incentive to expand or hire additional workers. Because the rich spend a smaller proportion of their incomes than the middle class and the poor, it stands to reason that as a larger and larger share of the nation’s total income goes to the top, consumer demand is dampened. If the middle class is forced to borrow in order to maintain its standard of living, that dampening may come suddenly—when debt bubbles burst.
Consider that the two peak years of inequality over the past century—when the top 1 percent garnered more than 23 percent of total income—were 1928 and 2007. Each of these periods was preceded by substantial increases in borrowing, which ended notoriously in the Great Crash of 1929 and the near-meltdown of 2008.
The anemic recovery we are now experiencing is directly related to the decline in median household incomes after 2009, coupled with the inability or unwillingness of consumers to take on additional debt and of banks to finance that debt—wisely, given the damage wrought by the bursting debt bubble. We cannot have a growing economy without a growing and buoyant middle class. We cannot have a growing middle class if almost all of the economic gains go to the top 1 percent.
Equal opportunity. Widening inequality also challenges the nation’s core ideal of equal opportunity, because it hampers upward mobility. High inequality correlates with low upward mobility. Studies are not conclusive because the speed of upward mobility is difficult to measure.
But even under the unrealistic assumption that its velocity is no different today than it was thirty years ago—that someone born into a poor or lower-middle-class family today can move upward at the same rate as three decades ago—widening inequality still hampers upward mobility. That’s simply because the ladder is far longer now. The distance between its bottom and top rungs, and between every rung along the way, is far greater. Anyone ascending it at the same speed as before will necessarily make less progress upward.
In addition, when the middle class is in decline and median household incomes are dropping, there are fewer possibilities for upward mobility. A stressed middle class is also less willing to share the ladder of opportunity with those below it. For this reason, the issue of widening inequality cannot be separated from the problems of poverty and diminishing opportunities for those near the bottom. They are one and the same.
Democracy. The connection between widening inequality and the undermining of democracy has long been understood. As former Supreme Court Justice Louis Brandeis is famously alleged to have said in the early years of the last century, an era when robber barons dumped sacks of money on legislators’ desks, “We may have a democracy, or we may have great wealth concentrated in the hands of a few, but we cannot have both.”
As income and wealth flow upward, political power follows. Money flowing to political campaigns, lobbyists, think tanks, “expert” witnesses and media campaigns buys disproportionate influence. With all that money, no legislative bulwark can be high enough or strong enough to protect the democratic process.
The threat to our democracy also comes from the polarization that accompanies high levels of inequality. Partisanship—measured by some political scientists as the distance between median Republican and Democratic roll-call votes on key economic issues—almost directly tracks with the level of inequality. It reached high levels in the first decades of the twentieth century when inequality soared, and has reached similar levels in recent years.
When large numbers of Americans are working harder than ever but getting nowhere, and see most of the economic gains going to a small group at the top, they suspect the game is rigged. Some of these people can be persuaded that the culprit is big government; others, that the blame falls on the wealthy and big corporations. The result is fierce partisanship, fueled by anti-establishment populism on both the right and the left of the political spectrum.
Why It Has Happened
Between the end of World War II and the early 1970s, the median wage grew in tandem with productivity. Both roughly doubled in those years, adjusted for inflation. But after the 1970s, productivity continued to rise at roughly the same pace as before, while wages began to flatten. In part, this was due to the twin forces of globalization and labor-replacing technologies that began to hit the American workforce like strong winds—accelerating into massive storms in the 1980s and ’90s, and hurricanes since then.
Containers, satellite communication technologies, and cargo ships and planes radically reduced the cost of producing goods anywhere around the globe, thereby eliminating many manufacturing jobs or putting downward pressure on other wages. Automation, followed by computers, software, robotics, computer-controlled machine tools and widespread digitization, further eroded jobs and wages. These forces simultaneously undermined organized labor. Unionized companies faced increasing competitive pressures to outsource, automate or move to nonunion states.
These forces didn’t erode all incomes, however. In fact, they added to the value of complex work done by those who were well educated, well connected and fortunate enough to have chosen the right professions. Those lucky few who were perceived to be the most valuable saw their pay skyrocket.
But that’s only part of the story. Instead of responding to these gale-force winds with policies designed to upgrade the skills of Americans, modernize our infrastructure, strengthen our safety net and adapt the workforce—and pay for much of this with higher taxes on the wealthy—we did the reverse. We began disinvesting in education, job training and infrastructure. We began shredding our safety net. We made it harder for many Americans to join unions. (The decline in unionization directly correlates with the decline of the portion of income going to the middle class.) And we reduced taxes on the wealthy.
We also deregulated. Financial deregulation in particular made finance the most lucrative industry in America, as it had been in the 1920s. Here again, the parallels between the 1920s and recent years are striking, reflecting the same pattern of inequality.
Other advanced economies have faced the same gale-force winds but have not suffered the same inequalities as we have because they have helped their workforces adapt to the new economic realities—leaving the United States the most unequal of all advanced nations by far.
What We Must Do
There is no single solution for reversing widening inequality. Thomas Piketty’s monumental book “Capital in the Twenty-First Century” paints a troubling picture of societies dominated by a comparative few, whose cumulative wealth and unearned income overshadow the majority who rely on jobs and earned income. But our future is not set in stone, and Piketty’s description of past and current trends need not determine our path in the future. Here are ten initiatives that could reverse the trends described above:
1) Make work pay. The fastest-growing categories of work are retail, restaurant (including fast food), hospital (especially orderlies and staff), hotel, childcare and eldercare. But these jobs tend to pay very little. A first step toward making work pay is to raise the federal minimum wage to $15 an hour, pegging it to inflation; abolish the tipped minimum wage; and expand the Earned Income Tax Credit. No American who works full time should be in poverty.
2) Unionize low-wage workers. The rise and fall of the American middle class correlates almost exactly with the rise and fall of private-sector unions, because unions gave the middle class the bargaining power it needed to secure a fair share of the gains from economic growth. We need to reinvigorate unions, beginning with low-wage service occupations that are sheltered from global competition and from labor-replacing technologies. Lower-wage Americans deserve more bargaining power.
3) Invest in education. This investment should extend from early childhood through world-class primary and secondary schools, affordable public higher education, good technical education and lifelong learning. Education should not be thought of as a private investment; it is a public good that helps both individuals and the economy. Yet for too many Americans, high-quality education is unaffordable and unattainable. Every American should have an equal opportunity to make the most of herself or himself. High-quality education should be freely available to all, starting at the age of 3 and extending through four years of university or technical education.
4) Invest in infrastructure. Many working Americans—especially those on the lower rungs of the income ladder—are hobbled by an obsolete infrastructure that generates long commutes to work, excessively high home and rental prices, inadequate Internet access, insufficient power and water sources, and unnecessary environmental degradation. Every American should have access to an infrastructure suitable to the richest nation in the world.
5) Pay for these investments with higher taxes on the wealthy. Between the end of World War II and 1981 (when the wealthiest were getting paid a far lower share of total national income), the highest marginal federal income tax rate never fell below 70 percent, and the effective rate (including tax deductions and credits) hovered around 50 percent. But with Ronald Reagan’s tax cut of 1981, followed by George W. Bush’s tax cuts of 2001 and 2003, the taxes on top incomes were slashed, and tax loopholes favoring the wealthy were widened. The implicit promise—sometimes made explicit—was that the benefits from such cuts would trickle down to the broad middle class and even to the poor. As I’ve shown, however, nothing trickled down. At a time in American history when the after-tax incomes of the wealthy continue to soar, while median household incomes are falling, and when we must invest far more in education and infrastructure, it seems appropriate to raise the top marginal tax rate and close tax loopholes that disproportionately favor the wealthy.
6) Make the payroll tax progressive. Payroll taxes account for 40 percent of government revenues, yet they are not nearly as progressive as income taxes. One way to make the payroll tax more progressive would be to exempt the first $15,000 of wages and make up the difference by removing the cap on the portion of income subject to Social Security payroll taxes.
7) Raise the estate tax and eliminate the “stepped-up basis” for determining capital gains at death. As Piketty warns, the United States, like other rich nations, could be moving toward an oligarchy of inherited wealth and away from a meritocracy based on labor income. The most direct way to reduce the dominance of inherited wealth is to raise the estate tax by triggering it at $1 million of wealth per person rather than its current $5.34 million (and thereafter peg those levels to inflation). We should also eliminate the “stepped-up basis” rule that lets heirs avoid capital gains taxes on the appreciation of assets that occurred before the death of their benefactors.
8) Constrain Wall Street. The financial sector has added to the burdens of the middle class and the poor through excesses that were the proximate cause of an economic crisis in 2008, similar to the crisis of 1929. Even though capital requirements have been tightened and oversight strengthened, the biggest banks are still too big to fail, jail or curtail—and therefore capable of generating another crisis. The Glass-Steagall Act, which separated commercial- and investment-banking functions, should be resurrected in full, and the size of the nation’s biggest banks should be capped.
9) Give all Americans a share in future economic gains. The richest 10 percent of Americans own roughly 80 percent of the value of the nation’s capital stock; the richest 1 percent own about 35 percent. As the returns to capital continue to outpace the returns to labor, this allocation of ownership further aggravates inequality. Ownership should be broadened through a plan that would give every newborn American an “opportunity share” worth, say, $5,000 in a diversified index of stocks and bonds—which, compounded over time, would be worth considerably more. The share could be cashed in gradually starting at the age of 18.
10) Get big money out of politics. Last, but certainly not least, we must limit the political influence of the great accumulations of wealth that are threatening our democracy and drowning out the voices of average Americans. The Supreme Court’s 2010 Citizens United decision must be reversed—either by the Court itself, or by constitutional amendment. In the meantime, we must move toward the public financing of elections—for example, with the federal government giving presidential candidates, as well as House and Senate candidates in general elections, $2 for every $1 raised from small donors.
Building a Movement
It’s doubtful that these and other measures designed to reverse widening inequality will be enacted anytime soon. Having served in Washington, I know how difficult it is to get anything done unless the broad public understands what’s at stake and actively pushes for reform.
That’s why we need a movement for shared prosperity—a movement on a scale similar to the Progressive movement at the turn of the last century, which fueled the first progressive income tax and antitrust laws; the suffrage movement, which won women the vote; the labor movement, which helped animate the New Deal and fueled the great prosperity of the first three decades after World War II; the civil rights movement, which achieved the landmark Civil Rights and Voting Rights acts; and the environmental movement, which spawned the National Environmental Policy Act and other critical legislation.
Time and again, when the situation demands it, America has saved capitalism from its own excesses. We put ideology aside and do what’s necessary. No other nation is as fundamentally pragmatic. We will reverse the trend toward widening inequality eventually. We have no choice. But we must organize and mobilize in order that it be done.
Assignment:
Explain which 3 of Reich's proposed solutions you feel would be most useful to reducing wealth inequality. For each one, explain what you think the major obstacles are. If you do not support any of the proposed solutions pick 3 and explain why they would not work or should not be implemented.
Minimum 1 full paragraph.
EMAIL YOUR RESPONSE TO ME AND POST IT AS A COMMENT BELOW (do not include your name on the comment!)
I feel that constraining Wall Street, giving all Americans a share in future economic gains, and getting big money out of politics would be most useful to reducing wealth inequality. I feel that the obstacles for constraining wall street would be economic halt because people will go on strike and the financial structure would perhaps collapse. This would also hurt the economy because the state would lose money from commuters. The obstacles of giving all Americans a share in future economic gains would be that some peoples now large salary may decrease. The rich might lose money if all Americans share in future. Also people who are greedy would be upset because they wouldn't make as much money. The problem with getting big money out of politics would hurt the economy. Every year there are many jobs created to help a candidate who is campaigning. Also there will be remorse in the government because our democracy might collapse. There would be no campaigning, no elections, no government. I support all of Reich's ideas.
ReplyDeleteI feel that making work pay, making the payroll tax progressive, and investing in education are the three most useful ways to reduce wealth inequality. Raising minimum wage and paying full time workers more can help reduce wealth inequality because workers will have more money. People will then have more money to spend on goods and stimulate the economy. However; if a business is going to be required to pay their staff a certain amount of money, they will either have to charge more money or have less workers.
ReplyDeleteBy making the payroll tax progressive rather than with a cap, there will be more money going to the government which can be used for education or food programs. The main obstacle would be getting this law passed by legislation because it would be hard to find people in favor of this. Investing in education should be implemented because with a better education people are more likely to be successful in the work force and get better jobs. An obstacle would be getting the money to fund these schools. A question would be does the funding come from increased taxes through income tax or do you get taxed if you go to a better school. All three of these ideas can help reduce wealth inequality, but a key obstacle in all three is where does the money come from.
America is at the pinnacle of losing its name of a democratic nation due to economic inequality. Though all of Reich's ideas are crucial solutions to income inequality when combined. I feel the three most effective suggestions are making work pay, unionizing low wage workers, and raising taxes on the wealthy. There are obstacles, which deter the progress of these solutions. First, if the minimum wage is increased businesses will be insinuating that it is better to hire fewer workers. The workforce of a company will be diminished to the ones with higher education and the low-income employees will have a lower upward mobility. Companies can only hire employees who are worth the income they are making. Raising the minimum wage will require workers to be more qualified and makes it more difficult for unskilled workers to find jobs. Finally the money to pay the employees will only come out of pocket from small-business owners or middle-class consumers so money is only being recycled not added. Next, unionizing low wage workers will give those affected by inequality a say. However, too much power may engender riots and companies may feel threatened and avoid hiring such employees. Lastly, raising taxes on the wealthy will make the proportion of taxes and income closer to middle class. Increasing taxes tailored to one class of people will be thought as unfair and antipathy between classes may arise. The soaring taxes will discourage people from becoming wealthy in this country and may leave to find another place where they feel valued with lower taxes.
ReplyDeleteIn my opinion, making work pay, investing in education, and paying for these investments (both in education and infrastructure) are the best solutions to reducing wealth inequality. Making the work pay, as the article suggests, will increase the minimum wage to $15, thus setting it to the level of inflation. In this case, it would be much easier for those working minimum wage jobs, full-time, to stay above the poverty line, and simply live better. Abolishing the tipped wages will allow for those to obtain the same as someone without the addition of tips, plus the tips for their work at the job. However, doing this will most likely affect the wage bracket at a work place, as in those with higher than minimum wage jobs will want a pay increase because of their higher level position. In addition, if a company cannot keep up with this increased payroll, some employees will need to be laid off.
ReplyDeleteInvesting in education will allow everyone to have equal opportunity to learn a skill and basic knowledge to advance in life (social mobility), even if they are potentially in poverty. An obstacle to this, however, would be the lack of suitable buildings for equal education to all, especially in urban areas and not high-rank schools. Finally, paying for investments by taxing the wealthy more heavily will help to decrease the inequality gap between the middle class and the high class, as well as use some of the saved (and not spent) money of those in the “1%.” An obstacle to this, however, would be those protesting in favor of the “trickle down” theory (even though it has proven to not be very effective), as well as some of the wealthy claiming this extra taxing to be unequal. Despite the fact that all of these solutions could possibly be effective, as the article states, it would take years for these to be implemented, and thus they will not be any time soon.
In order to reduce income inequality the government should invest in education, invest in infrastructure and get big money out of politics. Education is the future for the next generation. Therefore, the stronger the education the better prepared students will be to enter the workforce. If the United States could provide education to more people for less money than it will increase the quality of the jobs they will receive. This will also increase the value of the products exported from the United States which in time will increase the amount of money the US receives from exports. By investing in infrastructure then it would make the living conditions of the lower and middle classes better. This would, in turn, help out the people living in these conditions which would decrease the amount of money the people have to spend on fixing the their living conditions. Finally, by getting big money out of politics and by making people run on donations then it would decrease the amount of corrupt, rich people in politics. The corrupt politicians have their own self-interest and end up hurting the people, this way by getting money out of the equation the people have a better chance of promoting and electing a fair official that will uphold the people’s interests.
ReplyDeleteReich proposed 10 solutions to reducing wealth inequality; out of the 10 proposed solutions, I think solutions numbered 3 (invest in education), number 5 (pay for these investments with higher taxes on the wealthy), and number 8 (constrain Wall Street) would work the best. Investing in education is crucial to all Americans because everyone deserves a shot at getting an equal education.If every child were to get equal education, all of them would have equal job opportunities when they get older; being an educated worker gives a chance for a higher wage. An obstacle for this though would be getting enough funds to pay for all of the new schools/materials that would need to be opened/bought since there would be an influx of new students. Paying for the investments with higher taxes on the wealthy that Reich talks about would help reduce wealth inequality in the way that it would help close the gap between the middle class and the "1%". A lot of the 1 percenters have a lot of saved money that would also need to be used to pay off these taxes, decreasing this saved amount. After an allotted period of time, the classes would become closer together instead of so far apart. An obstacle for this would be the wealthy "protesting" that they have not recently payed these taxes, so why should they have to now? They might defy what the government is telling them to do and not pay up. The last solution that is reasonable is constraining Wall Street. The obstacle with constraining Wall Street would be that the workers on Wall Street would be furious with what people were trying to do to them; as a result to this, the workers could potentially come back with a strike causing lots of economical factors to cave in, or the complete opposite where the workers would retaliate with extreme spending, etc. As Reich says at the end of the article, "It’s doubtful that these and other measures designed to reverse widening inequality will be enacted anytime soon. Having served in Washington, I know how difficult it is to get anything done unless the broad public understands what’s at stake and actively pushes for reform."
ReplyDeleteOf the ten solutions proposed by Reich, I thought investing in education, higher taxes on the wealthy, and raising minimum wage for workers would be most effective in reducing wealth inequality. The obstacle that can be seen in investing in education is where would the money come from? Would the government add additional taxes to compensate for the additional money being put towards higher education? If so, would that affect our already struggling middle class? An obstacle one may see in raising taxes for the wealthy is that many see them as the "job creators" and many will oppose the higher taxes. The obstacle in the third solution would be less jobs for unskilled workers because companies will not want to hire people for that much money and instead turn to machines to do the work people could be doing.
ReplyDeleteThree of Reich's proposed solutions that would be most useful in reducing wealth economy would be investing in education, making work pay and investing in infrastructure. By investing in education, upward mobility will be increased and the lower class will have the chance to increase their wealth and move up the economic ladder through hard work. Obstacles that this solution faces is that the cost of implementing free education for all would be extremely high, especially paying for college tuition for all. The price of this plan would deter many politicians from implementing it. Making work pay will help to increase wages for the lower class and allow many people who work full time jobs to be raised out of the poverty level. Obstacles that this plan faces are that employers would object to this plan and that they would have to fire more employees to meet this new minimum wage unless sales increase. The last solution that can lower wealth inequality would be to invest in infrastructure. Investing in infrastructure would allow people to have safer, more efficient living environments and more comfortable homes for a lower, more affordable price that is suitable to living in the world's richest nation. Obstacles to this plan would be, once again, the cost of implementing these measures. The cost of increased investment in infrastructure would be high all though the payoff would be great. Politicians would also be reluctant to implement these measures because the budget is already stretched thin.
ReplyDeleteOf Reich’s proposed solutions, I feel that making work pay, investing in education, and investing in infrastructure are the three most effective to reducing wealth inequality. Currently, minimum wage in America is around $9.00 an hour, but this does not sustain family life. If workers in the fastest growing jobs are not receiving a decent pay, then they fall into poverty. A person with a full time job should not be poor; raising the minimum wage will help eliminate this problem. An obstacle to this , however, is that automation will tend to take over and people will find themselves out of a job. Also, investing in education is definitely an important solution. In the documentary, Reich mentions that nations with high economic stability tend to put more effort into making sure their workforce is educated. If more Americans have access to an affordable college education, then we will produce more innovative minds and efficient workers. People with an education will also have a better chance at rising economically. Finally, infrastructure is also an investment that we should focus on as a nation. Many working-class people find themselves lacking proper transportation or water sources, and this affects the amount of people who can live comfortably on their incomes. An obstacle to this, however, is that it will be difficult to implement these changes on a wide scale. Overall, the proposals all seem very logical but as stated in the article, unlikely because they are not practical.
ReplyDeleteTo shrink inequality in the USA, many think that raising the work pay or giving equal opportunity for education is a resolution. However I must disagree with this statement, my reasoning behind it being that giving workers more money for the minimal wage will not only give them more money, but then afterwards, expenses for products and services will rise. Doing this is disregarding the effect after the cause which would not solve anything. The solution to decrease inequality is not higher education either. Sure it is a goal to have every student reach their potential goal of educational achievement; however, once again the effect is not well thought out of the after-effects. South Korea is a good example for this case. They may have higher education, but because the competition is so high, parents then pay money after school so their child may be even smarter and have better grades. Does America want to succumb to that viscous cycle of tired kids trying to reach an endless goal of higher education and costs? What then happens to the families that are to poor to afford that higher education? Don't we leave them in the dust again? No, these are not our solution, one of the solutions we seek is in giving Americans that fair chance of future economic gains. Americans are always complaining about how they have less than $100 in their savings account or even no account at all. To have that savings account would help them in the future.
ReplyDeleteThe options that I think would work the best are to make work pay, invest in education, and to give all Americans a share in future economic gains. The obstacles for making work pay would be the amount of money available to be able to pay workers more. If this method were to be put into place, however, the middle class would have higher average income and be able to consume more, and since consumer buying accounts for 70% of the economy, this will help the economy. The second solution would be to invest in education, especially college. A possible problem for this would be the fact that it may take time for people to be affected by the changes. For example, it could take too much time for current students to benefit from changes made, but future incoming students would be able to gain the benefits. The benefits of this idea would be that more people would be able to get a degree and more skills, and this can lead to a better, higher paying job. The final solution he proposes is to give all Americans a share in future economic gains. A possible obstacle for this would, again be the cost of being able to give everyone enough money to invest in the future. A benefit of this plan would be that every American would be able to invest in the future however they want.
ReplyDeleteIn order to reduce inequality I think we should follow the proposed solutions created by Robert Reich’s, and the most important ones (in my opinion) would to be to invest in education, higher taxes on the 1%, and getting the money out of politics. First and foremost I believe that more investments in education. It would make higher education more affordable to everyone. We should invest in education as a norm in our society. It’s how we’ll get a more skilled workforce, and how to take of the load of giant college debt to graduates. We’d be able to teach people about inequality so that they could protest it. The problem with this is that the government is in debt and there aren’t too many investors that would rather spend their money on something else more “important than schooling. The second solution I believed was a good solution would to pay for all these investments with higher taxes on the wealthy. With cuts on the tax after years and years, the top 1% barely have to pay taxes and their income continually grows, while the median household income keeps falling. With the taxes imposed on the rich, the wealth would go back to the people of America through investments in education and infrastructure. The only problem with doing this is that there is so much wealth in the government that passing stricted taxes on the same people that helped finance our government members campaigns and helped support them to get to where they are now; therefore, it’d be nearly impossible to achieve this. Which leads to the third solution that I agreed with which was to get the money out of politics. Just because someone is wealthy doesn’t mean that they should have economic power over other Americans. It’s unfair, and through public funding campaigns might be less of a show than they are now, but they’d still get the message across, and even better, with no strings attached. The problem with that is that the public campaigns would mean higher taxes, or at least the publics money to support them, but as seeing that most of the population is in poverty, or borderline poverty, they don’t really have the money to give away when their first priority is to be able to feed and take care of their families. Overall Reich has many good possibilities for solutions, but it’ll take time and a lot of compromise to get back any economic equality.
ReplyDeleteWith America’s economic inequality widening greatly, the citizens must start some sort of movement. In my opinion, Reich's proposed solutions, the most useful to reduce wealth inequality is to invest in education, to invest in infrastructure, and to pay for such investments with higher taxes on the wealthy. However, along the way, the progress of each solution may be hindered due to obstacles in our communities.
ReplyDeleteInvesting in education involves providing everyone with an equal opportunity for affordable and high-quality education. As mentioned in the documentary, the countries with the least gap in economic inequality had invested great sums of money towards education. However, an obstacle facing this kind of investment is collecting the money to invest in education. The money would have to come from somewhere in order to improve schooling and the whole educational system. If this would mean taxing the (along with the wealthy) middle class and poor yet again, the solution would not turn out as planned.
Investing in infrastructure is another useful solution. Every citizen who works deserves proper housing, ways of commuting to work, and adequate Internet, food, and water. Suppose there was a lack of ways to commute to work, people would not show up at work, which would lead to no productivity. Without productivity, people would not be paid proper wages. Unfortunately, a downfall to this solution is acceptance in communities to allow new buildings and modes of transportation to be built as well as the increased taxes that citizens of that area would have to pay.
Promoting higher taxes on the wealthy is also another solution. Since the richest top 1% own 40% of the nation’s wealth and the bottom 80% of people own only 7%, it is evident that the gap between the inequalities needs to be decreased. While it was promised that the money from the rich would eventually trickle down to the middle class and poor, this did not happen. By having higher taxes for the wealthy, we can work to minimize that disproportional gap. These taxes can ultimately be invested in education and infrastructure. However, a major obstacle prevents this plan from occurring too quickly. With all the money the wealthy own, they may invest their money overseas in other countries to try to minimize paying higher taxes, leaving no money for them to invest in our own country. Another problem with this solution is that major class divisions and hatred may arise as a result of unfair taxation through the eyes of some people.
The solutions most useful to reducing wealth inequality would be to make work pay, to invest in education, and to pay for these investments with higher taxes on the wealthy. However, these solutions would not go without a flaw. Making work pay would allow people to earn more for their labor, but it would also discourage employers from hiring as many workers. Only the most qualified would be hired. Investing in education would play a major role in making job applicants more qualified for work. However, making free or affordable schooling available to everyone would be difficult. Implementing higher taxes on the wealthy would be a way of taking a portion of the unused and unnecessary money from the wealthy and using it to help those struggling financially. The downside to this is that the wealthy may become hostile toward the government favoring the lower and middle class over the wealthy.
ReplyDeleteI think that the most important factor in reducing wealth equality is investing in education. Reich said himself that some of the most successful nations economically are those that have put a significant amount of funds towards education. America for years has put up the façade of aiding education, but really hasn’t done much. Nearly every president since Jimmy Carter has had a “new” initiative to aid public education, but barely any progress has been made. Public schools are losing many students to much better run charter and private schools because they are run like businesses and are more often than not better schools. In addition, college prices are still absolutely ridiculous. The government keeps throwing money at all these universities, but prices don’t go down because the institutions know that the money will keep on coming. The government has to stop aimlessly throwing taxpayer dollars everywhere and introduce more “choice schools” so schools have competition and are motivated to perform better. Capitalism has worked for America; why not bring it to schools?
ReplyDeleteIn order to facilitate this, Reich also says America should “take the big money out of politics”. This is a great ideal, but may be very difficult to accomplish. It’s no secret that government officials are very well off and many are greedy and corrupt. Ideally they could just wake up one day, take a look in the mirror and change their ways. That’s probably a long shot, which is why Reich suggests the potential public funding of elections rather than the candidate with deeper pockets dominating the race. It’s certainly a great idea and a step in the right direction, but it should definitely be built upon. I’m not sure exactly how to do it, especially because the people we are trying to change are making the decisions on change. Honestly I think it will take a new president in 2016 with impeccable morals, coming from a modest background that sees everything wrong with his career area.
Behind education of course, I absolutely love Reich’s idea of giving all Americans some kind of bond to begin with. It is certainly in the spirit of equal opportunity, and I don’t think it can get much more fair than that. I do think that $5000 in stock for every citizen 18+ is a stretch, though. The concept, however, is brilliant. I think everyone should get something, and everyone getting the same amount. Again, it will be pretty hard to get this through in D.C., but it is definitely worth a shot.
Robert Reich proposed ten solutions to reduce the wealth inequality, of those I feel investing in education, get big money out of politics, and to make the taxes on the wealthy higher would be the most useful in reducing wealth inequality. Investing in education is crucial to create a stronger workforce in America. If the workers are education then they can get better jobs and become more successful, thus helping not only the worker but the economy as well. An obstacle would be funding for more public universities or being able to make them more affordable for all. Getting big money out of politics would help reduce the amount of corrupted politicians running because they can get funding from organizations and people and will do what is good for them and not for the people they wish to represent. A potential obstacle is the decimation of jobs during campaigning seasons. Whilst I think we need to reduce the amount of big money that is let into politics, it does help the economy by creating jobs. If the campaign has more money then they have more money to hire more people to do more jobs to help ensure the candidates success. In addition, making the taxes higher on the wealthy in order to pay for investments would be useful in reducing the wealth inequality. It will give the government more money to spend on investments such as education, It would solve one proposed obstacle towards an increase in education investing, it could also decrease the inequality gap between the middle and high class.An obstacle that is possible to arise is the wealthy, the 1% and those high in class may protest. They may not want to give their money away and may say it’s not fair to tax them so much more because they have a substantial amount of money. Reich’s ideas can potentially lead to reduce wealth inequality, now they just need to be implemented.
ReplyDeleteOut of all the ten suggested initiatives that can mitigate the widening gap of inequality, the three initiatives I chose were “investment in education,” “investment in infrastructure,” and “make work pay.” Primarily, investment in education can help reduce inequality by ensuring that every person in the United States receives high quality education without extra charges or fees. For example, there are many private schools in the United States that require a large annual fee from $10,000 to $17,000 just for the admissions of students. As mentioned in the initiative, education should not be a private investment, but a public benefit that can indirectly or directly affect the economy by contributing to a larger workforce, and help individuals to pursue a career in their interests. However, many obstacles can impede the “investment in education” initiative, such as the source of money and incensed citizens refusing the investment. For example, where would we find the money to invest a large amount of capital just for higher education? The government already has too many things on its plate, and investing a large amount of money for every person in the United States to have a spectacular source of education would not be extremely important to it. Furthermore, if this change were to be made, citizens that have already paid for high quality education would find it unfair that other people are receiving the same education for free. Secondly, “investment in infrastructure” is another viable initiative for reducing the gap of inequality. Every working citizen in the United States of America deserves fair prices on housing and renting, a reasonable distance for commuting to work, an adequate Internet access, and sufficient water and power sources. However, there are major obstacles that can encumber the chances to achieve this initiative. These obstacles include the source of money and the increase taxation of the middle class. For example, the government would need additional money to invest in infrastructure; therefore, the primary way of obtaining that money would be to increase the tax rates on the working class (which would then contribute to the widening inequality). Finally, the last initiative I chose was “making work pay.” Working citizens of demanding jobs in the United States deserve an income that reasonably suits their jobs. The steps of reaching this initiative include raising the minimum wage to $15, abolishing the tipped minimum wage, and expanding the Earned Income Tax Credit. However, there is a major obstacle that may hinder the chances of allowing Americans to receive an income that they deserve. This obstacle includes the limitations of employers. If there is an increase in the minimum wage, employers will start to lay people off with lower qualifications, and hire people with higher qualifications. Also, in account to other expenses an employer has to make, the rate of people that are employed may start to decline due to the employer keeping a balance with income wages and other expenses.
ReplyDelete1. Invest in Education: Investing in our education is the first step to balancing economic inequality for several reasons. First, recall the last time you watched a political television show. It is simply biased grown men in suits yelling to get their points heard over the other man. It is too late to show men like this who are so closed minded and greedy how to make economic opportunity available to everyone. We need to start with the children and instill in them the belief that success is achievable through hard work, not connections. Furthermore, by providing every child with equal education we are giving everyone the same basic tools they will need to survive and thrive in our society. How they implement these tools will decide who will be rewarded with financial gains. At least everyone will have the same starting point, unlike today where it seems some kids get a late start on the race to success. Also, by investing in continuing education we will make defraying college costs easier while also educating our people and giving them the opportunity to get a high paying job.
ReplyDelete2. Pay for These Investments with Higher Taxes on the wealthy: First, I want to start off by saying I do not believe in political parties because they distract individuals from voting for the candidate they truly believe is best for the job and close their minds to new ideas and possibilities. That being said, my beliefs tend to lie slightly more with the republican party then the democratic party, so I was surprised that I picked this option. However, it makes sense to increase the taxes on the wealthy. Our government has tried to give the wealthy tax cuts to help stimulate the economy and let the wealth trickle down to the middle class, however this has proven unsuccessful. In fact, even the CEO in the documentary from class admits that for his company to create jobs for more people, the middle class needs to begin purchasing more product. By taxing the wealthy, the economy will even out more and the middle class will be able to purchase more product and improve business overall.
3.Unionizing the Low- Wage Workers: It is true that with money comes power. The wealthy class not only monopolizes the economy but also controls the majority of the government. As a result, the lower wage workers have little to no representation to display their struggles and express their concerns in the workplace. And now a days union members often are targeted and harassed until they are too afraid to speak up against their employers. By giving the lower wage workers or the middle class a voice then we will be avoiding riots, strikes and possibly will be able to find an appropriate solution to balance out the economic inequality that plagues our country.
To reduce wealth inequality in this country, it would be beneficial to get big money out of politics, unionize workers, and invest in education. By giving not only the wealthy a voice in politics, the middle class will be able to speak up and stop the top 1% from getting richer. Although, this may be one of the hardest solutions to implement since people with more money have more resources available to run for public office and lobby for what they want. Another, more plausible, solution would be to unionize workers; yet again, giving the middle class the power to be heard. However, many big businesses want to keep their middle class workers quiet and limit the formation of unions. A final solution is to invest in education making it affordable to everyone and giving students equal opportunities to go to good schools, especially higher education. The main obstacle here is that many people assume education is and should remain a private investment. Without any of those obstacles getting big money out of politics, unionizing workers, and investing in education would be incredibly helpful in reducing the wealth inequality in America.
ReplyDeleteI feel that Reich has a good outlook on attempting to boost the american economy. However his ideas are not strong enough in order to create his desired effect. Reich proposes raising the minimum federal wage to 15$ an hour in all full time jobs. This, while being a great idea, while not affect the average income of american workers as much as it would seem. Many companies will raise their prices accordingly based on the wage increase, and will start to lay off workers in order to be able to be as efficient as possible with the new system. Another of Reich's ideas involves raising american infrastructure for everyday workers. This idea would raise the standard of living for many workers, however, the costs to companies creating these environments would only cause the costs of rent and taxes to raise even more. Reich's last idea that raised my attention was his idea that schooling through 3 years old to college should be free for all Americans. This idea would be largely beneficial to the common worker but would make many jobs much more competitive and would lower the economy of america by destroying large corporations that generated so much revenue from college prices each year.
ReplyDeleteLobby groups, education funding, and low unionization rates; these are the problems that need to be, and can be, solved by Bob Reich's ideas. Getting rid of big money is an idea that should not have to be discussed but here we are. Lobby groups are powerful enough to pass whatever laws they want most times. This directly undermines democracy and destroys representation of the masses. This is important for the next two problems. Unions pick up the job of legal representation when the courts can't act. The problem with raising minimum raise universally is that this will cause some companies to lay off workers to compensate. If, instead, unions do the negotiating directly, wages can be raised without layoffs and smaller companies that can not afford to raise wages by much are not crushed. Again, lobby groups have in the past targeted unions as they can have conflicting interests; just another reason to get rid of big money in politics. Finally, education is necessary not for the present but for the future. A flood of skilled workers can boost the economy drastically. The problem is that higher education is irrationally expensive. There can be two solutions to this problem. First, unions should nearly universally demand that workers be allowed to go to college for no cost of their own. Second, a bill similar to the GI bill should be initiated so that there are routes other than purely monetary to pay for college.
ReplyDeleteThe first step in solving economic inequality is to make work pay. I say this, because people are not paid enough to sustain a comfortable lifestyle in the middle class. People who are getting paid a livable wage will also spend more and put more money back into the economy. This boost in sales will create a demand for more jobs and, in turn, lower unemployment and raise salaries, so the people can spend more and stimulate the economy even further. This will be difficult, since people are greedy and want even more money than they already have. Therefore, a bill for a livable wage as a minimum wage will be difficult to pass in congress. Such a pay raise may also cause inflation, but the inflation will be sustainable, since people will be better paid and, therefore, more able to afford items with the inflation.
ReplyDeleteThe difficulty in passing a bill for a livable wage falls in the hands of the big money in government. The wealthiest 1% of the nation use their wealth for their own good to pass legislations in their favor. The big money also influences who wins presidential elections. This leaves the wealthy in control of the government, and able to make decisions for it. By making a limit to how much money can be donated by a person during a presidential campaign, or adding an incentive for any small donation to presidential candidates, the wealthy will be less involved in the government, and democracy will slowly restore itself to what it should be.
Another thing the government needs to do to decrease economic inequality is to invest in education. A well-educated work force is one that succeeds. Education should be affordable to all, especially the less wealthy, so the less wealthy have the same opportunity as the wealthiest 1% of the population to reach their maximum potential. An education makes for an easier time finding a job, and makes for more opportunities for economic success. By giving everyone the opportunity to get a great (and affordable) education, the government would be investing in the economy and a positive future for the nation.
I believe that investing in education, investing in infrastructure, and raising the estate taxes are the best three solutions to reduce wealth inequality that Reich proposed. By creating equal standards for schools and easier access to learning, the entire population will have the ability to earn a degree and therefore make a living. One obstacle for this option would be the difficulties that would arise when trying to create new schools and hire teachers in areas plagued by poverty. An investment in infrastructure would take away many of the daily struggles that some people face. If nobody had to worry about where they would sleep at night or how they would pay for the electricity bills, then people would be able to concentrate on their educations, careers, and families. An obstacle would be trying to find locations to build new housing in highly populated regions. Raising the estate taxes would increase the taxes on the wealthy and the "1%", which would remove the power of inherited wealth. One obstacle in this solution is that there would be a lot of outrage and protest from the upper class.
ReplyDeleteWealth inequality is becoming more prominent in American society. Although, in many situations, income inequality is desirable, the extent to which the inequalities are present is so great that it poses a threat to our economy and democracy. To address this problem, Robert Reich has proposed ten possible solutions; of those, I feel that investing in education, unionizing low-wage workers, and paying for investments with higher taxes on the wealthy are the most beneficial. If the United States begins to invest in equal and higher-level education for all students, then future workers will have the skills and credentials to secure better, more lucrative jobs. However, it will be difficult to find funding for these schools or an equal dispersion of eligible instructors to provide students with higher education throughout the nation. Another solution to the huge wealth inequality is unionizing low-wage workers to empower the middle class. By forming labor unions, low-wage workers will gain protection from the harsh mistreatment and layoffs from their employers. Some problems to this are that many companies will choose to ignore the labor unions that can overpower companies and force them into bankruptcy, ultimately harming the economy more. Also, the industrious and the lazy employees will have to be treated as equals, which can reduce the productivity of companies. The third most useful cure to the income inequality is placing higher taxes on the wealthy. This will also help to empower the middle class and fuel consumerism by taking from the rich and helping the middle and lower classes. Even though this might seem like a great idea, it may appear as a hindrance of democracy and equality if it only targets one group of people.
ReplyDeleteThe increasing gap in income inequality, is a growing issue in the United States of America. Yet, the American people still hold on to the illusions of grandeur, of the American dream. In times that would've sparked revolutions in even other developed countries, the populous has stayed quiet and held tight to their "inalienable rights," placated in their falsely preconceived notions. The best chance to allow economic mobility, in a direction other than downward for a change, is to increase the minimum wage, unionize workers, and to get big money out of politics. Primarily, getting the big money out of politics would help to pave the way to the other two and toward lessening the gap in general, yet it will be the hardest step. Weeding out corruption lawfully and totally is almost impossible, the corporations have more power in their dollar an any individual or even most communities can muster, it will be an uphill battle. Next, raising the minimum wage and more importantly pegging it to inflation, will ensure that those who do work full time are able to survive on that income. The issue with this is that the increase in wages could slow the growth of any small or family owned businesses; however, those getting an increase in their salary will also be those most likely to spend it, thus putting that money back into the economy. Any struggles on the more fragile businesses will be short lived, it is likely that a few already failing businesses will be put under more concisely though. Finally, unionizing workers could be a way for the average Joe to make their voice, opinion and standpoint on any political issue heard. Big money corporations or individuals won't have all the say anymore. Although, before unions actually take off, there will be political opposition to the idea and restraints will be, at least attempted, put in place.
ReplyDeleteOf Reich’s proposed solutions, I feel that his most useful solutions to reducing wealth inequality are investing in education in all levels, investing in infrastructure, and to make the payroll tax progressive. For investing in education, it can cause a more educated workforce with affordable education that can possible unlock new job areas due to more technical work forces. The major obstacles are globalization, and outsourcing of jobs. Government with its already trillion dollar debt would rather focus on establishing widespread lucrative industries in other areas in world with no incentive to increase further education of Americans at home. Even in we have more educated Americans there is no job security if employers and national corps don’t expand workforces. Government’s intense partisanship and powerful men in upper echelons of government would not focus time and money on technical education and lifelong earning in which budget would allow huge sums of money causing intense inflation. Investing in infrastructure could increase public outlook, allow middle class Americans to spend less on commute and unnecessary property taxes, and it could increase upward mobility. Living can be more affordable with better benefits. For investing in infrastructure, it has the same obstacles of budget and legislation. Median household and family incomes are already at all time lows especially with its minimum wage and increased infrastructure would mean more taxation on middle class. Taxation at the wealthy would be tough regulation since top 1% have already invested money globally so it would be unlikelihood to see a tolerance to give up money. It cannot be relied mainly on taxation of wealthy without higher gains in the middle class. Infrastructure can help but it has no sound foundation which is apparent in many cities such as the Bronx and other places that could benefit from improved infrastructure. Lastly, making payroll tax progressive and exempting the first $15,000 can cause wealthy to pay more money since cap is removed and allow low wage workers to keep more of their money especially for those making about $30,000. The obstacles are that payroll taxes make up 40% of government revenue and there is no guarantee that government will receive more money by removing the cap on social security. The wealthy and top 10% can find loopholes within social security and cause no major difference in money paid. So government revenue would decrease allowing less money to invest in education, infrastructure, and to increase work pay. In another case, the wealthy would highly object to paying increasingly high amounts for social security which would cause them to spend less and not be inclined to increase work pay and the workforce. Increased consumer spending and education is vital to larger workforce but making up for the difference in revenue from making payroll tax progressive is not certain.
ReplyDeleteOf Reich's proposed solutions for income inequality in the United States, unionizing low-wage workers, investing in education, and raising taxes on the wealthy would be the most effective economic maneuvers. However, there are quite a few obstacles that these plans might run into before they can be fully realized. First off, unionizing low-wage workers could put too much power in the hands of the workers and discourage business entrepreneurs. A company should respect the rights of its workers but it shouldn't have their fear the unions. The key is a balance of power between employers and employees. Secondly, the government has to be careful when investing in education that taxpayer dollars go to good use. Money should never be blindly invested so the government should always monitor exactly where it goes. Finally, although raising taxes on the wealthy seems like one of the most simple and obvious solutions, actually implicating it would be difficult. The wealthy have many political ties to government and they would probably do at that they can in their power to prevent legislation in favor of higher taxes and against loopholes. In conclusion, not only does income inequality pose a problem, but also its solutions. Although they can be overcome it will take time and effort on the part of the American people.
ReplyDeleteReich’s solutions make a lot of sense. I believe the $15 minimum wage must be implemented immediately since people can’t sustain themselves on 8.25 since inflation has way outpaced the current wage. I myself worked at that rate. Not out of necessity, just for a summer job. However, I witnessed how these people have to work. Many working two jobs just making ends meet.Their quality of life we had in the 1900's doesn't exist at all. These people's daily schedule just involves working. Even on the weekends. As suggested previously, we should emulate ourselves from the past and fix what went wrong. Low-wage workers should be able to unionize themselves to prevent this situation from repeating itself in the future. If workers can cripple the institutions they are working for, they may be able to get their way. Lastly, investing in education is critical. We are fortunate to be living in one of the most affluent areas of our country. To us, this lifestyle is the norm and we think that this might be the typical lifestyle for most folks. It is quite the opposite. People in areas not as affluent as ours usually suffer from lack of public funds which result in lower-class education, impoverished neighborhoods where people have to resort to crime. Reich does indeed have a point. Any American that works full time should not have to work two jobs and be living on the edge. That is just not right. Through education, if we gain a skilled labor force, we can bring manufacturing back and bring high-tech jobs back to our nation. U.S can once again be known as an innovator in technologies as it was in the 1900’s.
ReplyDeleteThe three solutions I feel would be most useful are making work pay, unionizing low-wage workers, and investing in education. Since our economy growth depends on consumers and the middle class makes up 70% of consumers, increasing minimum wages helps our middle class buy more. However, even if they be easy for wealthy companies, hometown and family owned businesses may have a harder time with the higher minimum wage. Encouraging unionization for low-wage workers will help with bargaining in order to get higher wages and more benefits, this in turn helps with middle class. But, with unions there is no guarantee that companies will give into their requests. Investing in education allows everyone to reach their true potential, improving our work class and middle class. The problem with this is students really have to give their best and that isn’t always guaranteed either.
ReplyDeleteThree of Reich's solutions that are likely to be successful are the plans for wealthy to invest in education, lower paid workers to form unions, and investing in infrastructure. Investing in education allows for students from lower economic backgrounds to be able to get a good education and attend college or get technical education. This would lead to a workforce that will be better prepared for the higher level work that is needed to boost our nations economy. The ability for employees to form labor unions allows workers to have a bargaining chip when it comes to asking for a raise or fighting against working hours and or conditions. This would then allow workers of larger businesses to fight for better pay or conditions without complete fear of being fired. Investing in infrastructure is also a great plan, because it will lower the cost of living for families, and allow families to get good electrical services and have fresh drinking water. Overall, these three plans are probably the most realistic and have the most potential to succeed than the other ideas listed, in addition to the fact that they offer the most beneficial rewards.
ReplyDeleteOut of Reich’s ten proposed solutions to reduce wealth inequality; making work pay, investing in education, and giving all Americans a share in future economic gains would be the most useful. By making work pay, those in poverty due to being paid minimum wage will have a chance. Since the most common jobs for teenagers and those struggling to make a living are the fastest-growing categories of work, raising the minimum wage will benefit a significant amount of America’s working population, essentially helping sustain the economy. The downfall being, if minimum wage goes up, fewer workers will be hired with a potential for layoffs. The other option being, to charge more money, which less people will be able to afford. By investing in education, everyone will have a chance at a high quality job, leading to a better economy. However, if everyone is given the chance to have a higher education, it will no longer be of significance. If everyone has a degree, we will all be at the same level without much room to improve individually. By giving all Americans a share in future economic gains starting at birth, everyone will have a fair chance. Instead of only the rich owning the nation’s capital stock everyone will have some amount of ownership. Again, if everyone is included, the value of the amounts will go down. Instead of going to the children at age 18, their parents can abuse the system and take it for themselves. Although making work pay, investing in education, and giving all Americans a share in future economic gains would be the most useful, there are always setbacks and consequences that come along with every major decision.
ReplyDeleteOut of the ten solutions Reich proposed, the most useful in reversing the widening gap in wealth inequality would be to raise minimum wage, invest in Education and to place higher taxes on the wealthy. If the minimum wage is raised to $15, people who are working full time will not be living in poverty. With inflation causing prices to rise, minimum wage must also rise. Investing in Education and making it more affordable for everyone to get a higher education will be very beneficial to the economy. Part of the American dream is equal oppurtunity, but unfortunately a quality education is typically unaffordable for most people and their for many Americans do not have the opportunity to “make the most of” themselves. Placing higher taxes on the wealthy will be very helpful in stopping the gap in income inequality. At the moment, the very rich are not getting overly taxed because of the theory that wealth will ‘trickle down’ to the lower classes. It has been proved that nothing has trickled down, proving the system is not working. The best course of action is to tax the rich and get money from the people who have a lot of it. If all of these things are done along with other things Reich suggested, the gap in income inequality will be reversed and we will have a stronger economy because of it.
ReplyDeleteIn my opinion, in order to reduce the major predicament of wealth inequality in our country, we should follow Robert Reich’s proposed solutions. However, the three solutions that I believe will be the most effective are investing in education, investing in infrastructure, and make work pay. First of all, investing in education will provide a great boost not only to individuals but to the economy as a whole. The main goal of this investment is to provide an equal opportunity of education for everyone and to use that education to make the most of themselves. However, possible obstacles that would be faced if the country were to invest in education could be where the money would originate from, and what should the money be invested into. Secondly, investing in infrastructure is a viable option in reducing wealth inequality because it would effect many aspects of the lower and middle class. Major problems in infrastructure include the high costs of rent, insufficient power and water sources, and unnecessary environmental degradation. However, if better, cheaper infrastructure was created through the use of the investment then it would help the those on the lower rungs of the income ladder immensely. Not only would it provide the lower and middle class a place to live, but it would also create jobs. However, some obstacles that would be faced when creating new infrastructure is location and source of the money. Finally, the last ideal that can help reduce the gap of wealth inequality is make work pay. Increasing the minimum wage to an ideal salary will help Americans stay above the poverty line, and live a better lifestyle. As a result, it would increase consumer spending which would boost the economy. Nevertheless, an obstacle that would result from raising the minimum would be that more people would be laid off and less people would be working in minimum wage jobs.
ReplyDeleteI do not believe that most of these proposals would help economic growth in the United States. If the United States were to raise the minimum wage to $15 an hour, businesses would have to raise their prices in order to pay their workers. Consumers would stop spending so much money and eventually, many businesses would go bankrupt. Businesses would also cut back on the number of people they employ in order to stay competitive and save money. Once the businesses went bankrupt, there would be more unemployment and poverty in the United States overall.
ReplyDeleteIf the United States were to Unionize low wage workers, the companies would be forces to pay their employees higher wages. Like raising the minimum wage, this would also cause the companies to go bankrupt. Also, workers would be forced to pay union dues which would decrease their salaries. Additionally, unions do not reward employees for hard work. Instead, workers are given increases based on the number of years they are employed. Unions do not encourage employees to perform at the best and often cause workers to develop a lazy attitude.
Investing in infrastructure will not benefit the economy in the United States because there is no guarantee that people will work once these changes are made. Investing in infrastructure would just be giving people nicer things without instilling a work ethic. While this idea will create temporary jobs, the infrastructure that is made will not last, and the jobs that these workers had will only be temporary. This will not create a permanent solution to growing the economy.
Today, wealth inequality is a major issue in the United States. Many representatives of our nation have addressed this issue and are looking for solutions. Secretary of labor Reich has explained the issue and suggested many solutions to reduce wealth inequality. In my opinion, the best three solutions are investing in education, taxing the wealthy class, and increasing the minimum wage. Investing in education is imperative to bolster the skills of the people of the nation, so that it is easier for them to get advanced jobs that pay more. The one obstacle to this is making education accessible for most people, and to pay for more institutions that can accommodate for the people who would be interested in an education. Furthermore, taxing the wealthy class will greatly help the economy because they do not spend most of their money anyways; they save it so if they can just take some extra money out of their pockets it can help the middle class tremendously. However, taxing the upper class will result in protests and conflicts that must be resolved due to the power and authority that the upper class has. Finally, increasing the minimum wage will help the middle class live better lives, as well as give them extra money so that they can actually spend in the economy to help out with consumer spending. In the contrary, increasing the minimum wage to 15$ means that companies are going to have to spend so much more money on one worker, that they will be reluctant to hire new ones. This will cause a decrease in jobs due to the interest the employers will have in replacing workers for new technology machines.
ReplyDeleteTo begin, just a note I think it would be interesting to do 2 I agree with and one I disagree with, for variety's sake.
ReplyDeleteOf Reich's ten suggestions, two are most possible and useful. These are the unionization of the working class and a progressive payroll tax to thin the political wallet a bit. To begin with the first half of that idea is the unionization of the workers. A group mentality can change ones opinion of self worth greatly. So many people will refuse to vote or try to make a change in the world because they're 'just one person' but even the ocean is just drops of water. And some people will not realize this until they have some people backing them, and that''s where unions come in. Unions have a lot of power. From their start they've been winning wars for the working class, bringing them privileges and powers hitherto unknown to them. To bring this power back to the working class to fight as one idealized mass would bring them a real voice in both government and the marketplace. The current working class seems to have a position equatable to Colonial Americans in English Parliament or the Bourgeoisie in pre-revolutionary France. They have no voice and are trapped under a ceiling of poverty and lack of organization. Unionizing can bring them more rights, freedoms, pay raises, and give them an essential voice that could bring about change. Unions are powerful forces, and their is a reason they were fought against so vigorously by big business and even the government; they are the voice of the people. They are the cumulative voice of 70% of the market and 58% of the voters. They have a stronger sway than just about anything in America, and that's why they need to be back. We need the burgers, the plebeians and bourgeoisie and artisans to once again have a say they have lost to big business.
Secondly is the cutting of the payroll tax. Now this is a bit of a tangent but surprise surprise the government has too much goddamn money. We lead the world in military spending and our governmental workers get paid exorbitant amounts for some pathetic work (we are currently living in the age of the most lethargic, inactive, ineffective congress) we give wages unnecessary for work done due to some people being charismatic or being born into money or nepotism or connections while the working man is fighting to not drown beneath the poverty line. We build military vehicles and weapons that are not only antiquated but superfluous to the point where they are being handed down to the police, which is pushing us ever further to a Big Brother totalitarian police state a la Mussolini. So hell yeah! Cut payroll taxes. It does simply lower the wages of the 1% and raise the wages of the working class. It gives money to the job creators to ensure it doesnt wind up in the pockets of the "job creators.
Now one I do not agree with would be anything to do with stocks and wall street. To constrain these markets would constrain even more of our dwindling economic freedoms. The market is a place where you really can make something of nothing, were you can go from some penny stocks to thousands of dollars if you know what youre doing. I believe in the stock market as representing our freedoms of capitalism and to try to stifle it would be to stifle our economic rights.
Out of Reich’s 10 proposed solutions, I believe that make work pay, invest in education, and pay for these investments with higher taxes on wealthy would be the most useful. By making the work pay, it would give the people that work full time jobs the money they so rightfully deserve instead of the pity amount of $8 an hour. This way, anyone who works a full time job will be able to afford the necessities of life without concern. In addition, by investing in education, it will be easier to find jobs and better paying jobs. However, if education was paid for by the government, than every single person would be given an equal chance in the world. Education should be offered to everyone equally, not just the rich and upper middle class. Lastly, I believe that we should pay for the investment of education with higher taxes on the wealthy. Obviously the wealthy can afford the extra taxes, so why not help out the people who are not doing as well? The taxes on the wealthy should not ridiculous amounts, but enough to cover equal education for all Americans.
ReplyDeleteReich offers many proposed solutions, in hopes of reducing wealth inequality. Personally, I believe that the three most beneficial solutions include investing in education, higher taxing of the wealthy, and unionizing low-wage workers. Education is a major aspect of success in the United States, and it is a prime topic in this debate on wealth inequality. As is the American dream, every individual deserves an equal opportunity to become successful. Schooling and education provide Americans this chance for social mobility, despite the surrounding circumstances. Essentially, this means whether an individual is living above or below the poverty line. Though this is an advantageous, new idea, there are countless obstacles in the path. For one thing, there is the basic question of where this funding will come from. It's hard to imagine where the money for investment will come from, as the government has a less gracious budget for education already. Additionally, another proposed solution is to tax the wealthy. The current tax code allows for a larger share of the wealthy's income to escape taxation, rather than the middle class or poor. If the wealthy are taxed higher, this may finance more investments in education and infrastructure, which are necessary aspects of middle-class society. Along with that, if the wealthy are taxed higher, the middle-class will be given lower taxes, which will allow for a basic purchase power to stimulate the economy. However, this is a wary idea to approach, as it may lead to class seperation and discrimination between the wealthy and poor. Finally, the third solution made by Reich was to unionize low-wage workers. The top one-percent of society controls the vast majority of the economy, leaving little to be desired for the poor and middle class. Quite frankly, the lower income workers have little representation in the workplace. Unionizing workers will allow for any individual to voice his/her opinions and concerns, in hopes of bettering the current economy. Similarly to the idea of taxation of the wealthy, unfortunately, the wealthy may begin to feel targeted, as the unionization of low-wage workers is predominantly to the benefit of only the middle class.
ReplyDeleteReich proposed several solutions to help reduce wealth inequality, but the three that stood out to seem as if they would help the most in doing so are: investing in education, making work pay, and getting big money out of politics. Education is the key to success, and education is the key to our future generations. With a strong foundation to education, this ensures us that our future generations will have a stronger work force and quality employees. The goal is to invest in education to provide an this opportunity for a wider population of people for a lower, reasonable cost. With more educated people, the higher quality work we as a country can offer to people everywhere. With more jobs we get more manufacturing, with more production more product, with more product comes more sales, and in result of more sales, we get more money, and higher pay to workers. Although, there may be issues concerning the investments to pay for peoples education to make up for the lowered costs. Moreover, making the work pay will in turn raise the minimum wage to fifteen dollars, and set the levels of this wage and inflation to about the same. With this ideal in hand, minimum wage employees will be able to stay above the poverty line. Living above the poverty line will provide better life quality and generally more comfortable living. However, with great ideas also comes great consequences. Changing wages and making work pay might end up affecting the overall payment and wage scene.If minimum wage is raised, why can’t higher position workers with higher pay get a pay raise as well? Furthermore, what if a company can not compromise with higher working positions and those of minimum wage? There will be a lot of conflict between the employees and in turn, many workers may need to be laid off. Lastly, if we got big money out of politics, the wealth inequality should decrease. Having general population as well as government run on donations would help decrease the tendencies of corruption. Corruption usually starts with big money in politics, and the corrupt politicians tend to be those only looking for their own self benefit. By getting the “big money” and corruption out of the way, justice and fair politicians can step in and help work with the issues of wealth inequality rather than taking more money away from these varying wage groups. Unfortunately, taking big money out of politics also means cutting budgets and losing major funding.
ReplyDeleteIn order to tighten the gap between the wealthy and the poor, the United States should raise minimum wage, invest in education, and unionize low-wage workers. By raising minimum wage to $15 an hour, people who have these jobs will be more willing to spend more money and increase consumerism and capitalism. An obstacle that comes with this suggestion is that the people who employ the minimum wage workers may not be willing to pay all of their employees that amount of money, and that might lead to lay-offs and unemployment (which would be a step in the opposite direction). Investing in education would allow middle-class people to pursue their degree for an affordable price. This would result in more skilled workers being employed at higher paying jobs. However, investing in education would be expensive. For the amount of people that want or need to seek higher education, there most likely is not enough money to make so many affordable colleges and universities. Lastly, creating unions for low wage workers would help prevent big business owners to subject workers to unfair treatment (low wages, poor job benefits, etc.), Business owners, on the other hand, probably would not want their workers to have so much power. All in all, Robert Reich brings up excellent points on how to decrease the gap between the wealthy and the poor, but all of them come with some obstacles.
ReplyDeleteIncome inequality is a major problem in the United States and definitely not an easy fix. I believe two of Reich’s proposed solutions could possibly reduce this problem. They are investing in education and taxing the wealthy more. (1) Investing money into education will hopefully allow all types of Americans to have the opportunity to reach their full potential. However, where is the money going to come from? A good education requires a lot of money to pay for schools, textbooks, and teachers. The government isn’t going to want to put more of their money into education and therefore, tax citizens more. (2) Taxing the wealthy more than the middle class and lower class seems to be the most logical thing to do because we need to get their money out of their safes and circulating in the economy. I believe there should be a system where everyone gets taxed the same percentage on their incomes. However, politicians that support the wealthy aren’t going to agree to a new law where they have to pay more. (3) On the other hand, I believe that simply raising minimum wage from $8.25 to $15 per hour will cause companies to raise prices. If companies are forced to pay their workers more, they are going to have to sell their service or product for more. Otherwise, their profit will decrease. Smaller businesses especially, can go bankrupt if they don’t raise prices. Another option for these companies is to fire more employees so they have less people to pay. The intention of raising minimum wage is good because the middle class needs more money. However, without rules regulating the number of employees you can have or how much you can charge for a product or service (rules that will probably never happen), raising minimum wage is not going to affect the economy positively.
ReplyDeleteI disagree with almost all of Reich's points to some degree, but the ones I disagree with most are unionizing low wage workers, make payroll tax progressive, and give all Americans a share in future economic gains. Now although all of these ideas sound great at first glance each have problems when you look into the economics of it. Low wage workers can already unionize! Many of them do, and the ones that don't do it because unions are historically known to destroy jobs. Reich suggests stock options that are given to everyone at 18. Hmmm I wonder what the average 18 year old would do with this money? I'm sure every single one would use it to pay for there college or take care of their grandma perhaps. None of them would waste this money due to their immaturity and or lack of financial skills. #all18yearoldsareresponsible. Lastly making payroll progressive by investing further into social security is a terrible idea because well, we're investing more into social security. The system that takes away a part of your income (that you could be investing into this growing economy that Reich believes every american should be a part of) and gives you and IOU that the government will pay you back when your old.
ReplyDeleteThere is quite literally nothing democratic about the economic situation of our current time. Can it even be called a situation? It's more of a disaster. Though nobody will outright say it, and FOX News will work to deny it while blaming ISIS, wealth inequality is literally killing the nation, or at least what we all think this nation to be. With the social, economic, and political hierarchy that's emerging from this vast inequality, the system we're moving towards is almost terrifyingly feudal, but with CEOs at the top instead of kings, and accounting ledgers full of embezzlement taking the place of the bible. To combat this rising caste system, it would appear that three things need to get done: Raise the estate tax, constrain Wall Street, and get big money out of politics.
ReplyDeleteAs I mentioned before, we have a system almost akin to a medieval one, a hierarchy of being based only on the money you have. It goes against everything the Braindead Megaphone told us America was, but it's happening. Money is literally becoming power. It's political power, social power, provides a terrifying level of impunity from the law, allows for influence wherever the one holding the money wishes it to go. In addition, wealth won't die. When a person who has amassed great wealth passes away, their money goes to a named heir, usually someone in the family. This adds another aspect to the emerging feudal system, and one that anyone who has watched or read Game of Thrones is sure to be familiar with: Lordships, or continued wealth and power in the hands of a few influential families, with the slimmest of chances that someone on a lower level may join their elite ranks. We can combat this by raising the estate tax, softening the crushing blow to democracy that is inherited wealth.
A thriving economy is magnificently important, but the financial sector on Wall Street passed "thrive" long ago and has moved into "sprawl and overtake". The financial section of our government is massive, unregulated, and wealthy, all steamrolling towards another crash. Some of our banks are too large for the government to have power over, and government regulation of banks is crucial to protecting the people.
Finally, to start to put an end to wealth inequality, Big Money must come out of politics. BIG MONEY MUST COME OUT OF POLITICS. It simply must, there should be literally no room for debate. The idea that money as politics is acceptable, perpetuated by the Citizens United ruling of 2010, is a gun being held to the forehead of our dreams of democracy. To have a true democratic system, races for office must be run without the contribution of the the rising aristocracy, because any government supporting their interests and their interests only is doomed to perpetuate the vicious downfall we're all stick in.
Except the corporations.
They bought out.
The United States is on the brink of losing its founding principles of democracy and equal opportunity. What happened to the American Dream? We must restore the rungs of social mobility to allow all the citizens to climb his/her way upwards!
ReplyDeleteOf Reich’s proposed ideas, I believe that investing in higher education, investing in infrastructure, and making payroll taxes progressive would be most effective in reducing wealth inequality. Investing in higher education will ensure a skilled workforce for the future generation, one that will not be easily replaced by robots and satellites. A college degree will actualize an employee’s earning potential, and secure position that employer’s demand. This will be a daunting task, however, because college tuition has been rising exponentially. Federal grants and merit scholarships can only pay for so many students. Additionally, investing in infrastructure will offer reliable cash flow and help combat inflation. Like higher education, infrastructure requires large investments. The complexity and scale of the projects can cause potential investors to shy away from the risks, impeding our ability to build. Lastly, payroll taxes should be progressive. Currently, regressive taxes account for much of the governments revenues. Thus, the government will have to find another means of generating the same revenue, which may hinder change.
In my opinion, I feel that making work pay, unionizing low-wage workers, and investing in education would be the most useful tactics in reducing wealth inequality. Raising the federal minimum wage to $15 an hour would help many of the workers in fast-growing areas of the job market such as retail, restaurant, hospital, hotel, childcare, etc. live comfortably. Considering many of these Americans are working full time, none deserve to live on the line of poverty. Achieving this boost in work pay for such jobs would be difficult because workers and employees who typically make $15 an hour would demand a raise as well. Arguing with factors such as more experience, better education, etc. As a result, employers might have to let off many workers to manage the income changes. Second, unionizing low-wage workers would allow a voice to be heard in the workforce community. Those who are affected by wealth inequality need to be given the power to secure a fair share of the gains from economic growth. Provided with more bargaining power, more positive changes can be considered and made, accordingly. However, this kind of power is the exact type of development that employers do not want on their hands. Keeping an eye out for workers who might try and "make a difference" with their new voice, employers may simply not hire them. Lastly, an education for all Americans must be invested in. With the opportunity to afford a learning experience from a young age, every American can develop basic life skills and attain equal opportunity in finding jobs in the market. The only issue with this proposal would be the investment in schools, supplies, and seating for a new wave of students. With hundreds and thousands more children enrolled in the system, the government will have to pay a lot to maintain it.
ReplyDeleteI think that the first thing we should do is start investing in education. One of the major obstacles of this is that you will not see its effects for years. If it is done properly then it would start with better education starting in elementary and even pre-school and working its way up to make colleges more affordable. Another obstacle would be making colleges more affordable so every citizen could attend. The next step I think we should take is constraining Wall Street. The major obstacle of this idea is getting the laws passed. A lot of law makers also happen to be people who benefit from keeping Wall Street unregulated, therefore it would be very hard to pass a law limiting its power. The last thing I think we should do is get big money out of politics. The problem with this is the same as the one above; law makers benefit from keeping current laws in place. Another obstacle with this idea is overturning Citizens United. It will take a law or another Supreme Court Decision to reverse it.
ReplyDeleteI believe that the best solutions to this great inequality is found in investing in education, taxing the wealthy, and ultimately by getting big money on politics. Overall, everyone can agree that education is something that truly gives opportunity and is the only thing that removes ignorant actions made by all but one cannot avoid that a great deal of people will not take advantage of what will be given to them and just have the government waste its money. Furthermore, taxing the wealthy is one of the only things that will not greatly impact the overall population. The rich take advantage of the low earning middle class people and get to continue living a life of luxury and it is not fair. Nevertheless, the biggest businesses can move easily and keep america out of the equation completely. Ultimately, if this country wants equality for its majority taxing the rich is possibly the only thing that can work because too many studies have gone by with a continuous answer telling us that the money of the rich is not and probably will not sprinkle enough on the rest of us to help anyone. The thing that might go wrong with getting big money from politics would be the very possible idea of the economy failing and ultimately collapsing.
ReplyDeleteThe first option which is to raise the minimum wage is a very reasonable solution to reduce wealth inequality. This would allow the middle class to have more income as well as more time spent with their families. Not to mention, people may become increasingly motivated to apply for jobs. Those jobs that nobody wants to do may be filled up if the minimum wage increases. Although, every solution comes with some obstacles. If minimum wage were to be increased, smaller stores and restaurants may not have the ability to pay there employees. Therefore, they would be forced to lay them off and thus created less jobs. Another obstacle is companies will be more picky about who they hire because they want to make the most of their money. This may cause unskilled people to lose job opportunities. Conversely, it may push these unskilled people to obtain skills through college or trade schools. The raise of minimum wage can clearly have it's ups and downs.
ReplyDeleteThe second option I believe could be a very valid option is to bring back workers unions. History proves that these unions had major impacts on pay, hours, working conditions and so much more. Currently, with all the news outlets and social networks, the word could be spread even faster and more people could be gathered into the unions. Of course, there are some negative obstacles to overcome for unions. Nowadays, certain companies can fire those who join labor unions because they have high school and college students to replace the adults. Also, certain unions can be extremely uncooperative and create dangerous protest. Although, if labor unions can remain peaceful they would help reduce wealth inequality significantly.
The third option Reich provides is to invest in infrastructure. Those in the rapidly sinking middle class often own infrastructure that costs them thousands if not millions. If we were to invest in infrastructure, this would not be as major of an issue. The middle class needs any help it can get because it is at such a horrific point. There are many obstacles in this. The most overwhelming one being, where does this money come from? The only solution to this question would be to tax the rich. The idea of investing in infrastructure would be great. Although, it will likely not be possible unless he wealthy are taxed.
After reading ten of Reich's proposed solutions, there are three that I especially feel would be the most useful in reducing wealth inequality. The first is that we should raise the federal minimum work pay to at least $15 per hour. There are full time American workers who are or are nearly in poverty just by working off of minimum wage. By bringing the amount of pay up, less people would face this problem and actually be able to support themselves and their families. Although, raising wages sound reasonable enough, there is the problem that some businesses may have to hire less workers or raise prices of their merchandise in order to keep up with pay. The second is that the government should invest more in American education. Many colleges and universities, especially top schools, are nearly impossible for the average middle class student to go to without being put into thousands of dollars in student debt. For this reason, families decide not to send their children to these overpriced schools in order to avoid this problem. Even public schooling before college does not provide enough real world experience for students to get somewhere. Because of these issues, people do not have the proper criteria or knowledge to obtain a well paying job. Although this can improved, there is still the issue of legislation passing a law to lower debt without waiting for years. Lastly, higher taxes should be put on the wealthy to short the gap between it and middle class. While many middle class citizens, struggling to keep up with taxes, plummet deeper and deeper into debt, the top 1% thrives in the millions to billions they make per year without having to pay an equal portion of their earnings towards taxes. Some people reason that this is due to the "trickle down" theory and that it motivates the rich to use their money to start new businesses and hire more people. However, there has not been many recordings of this idea working. Still, there is the obstacle of getting this solution implemented since it would take years for it to finally put into action. Even with the potential downsides to these solutions, I believe that these solutions should actually be used in order to reduce the inequality gap.
ReplyDeleteThe three proposed solutions I find to be the most useful would be to make work pay, unionize workers, and invest more in education. Raising the minimum wage of our workers such as cooks and store managers. He states the no american who works full time should be in poverty and I absolutely agree. If an american has enough gumption to put for most of his time toward providing for a family or just himself then he should not have to worry about not making enough. Unionizing workers has been something that has gone on for quite a long time but has only just recently fallen into the background of things. Lower pay workers need to band together in order to pressure businesses into meeting their demands, so that these workers no longer have to be shoved around/ at the mercy of their employers. Lastly we should invest in more education as one of the most useful ways to fix the debt inequality gap. The smarter our workforce the more work they get done and consequently the more money everyone makes. This also spurs things such as innovation and invention that may not have been as productive with a less educated workforce. These three solutions are the first three mentioned and also the ones that seem like they have the most chance of working to fix the inequality gap.
ReplyDeleteWealth inequality seems to be an issue that seems to be so multifaceted and complex that it either has several fitting solutions or none at all. Out of Reich's ten proposed solutions, are there any that could be useful? Perhaps. Looking beyond the fact that there is no saying how ideas can manifest in real life, I would say that investing infrastructure, education, and unions would be the most effective. These solutions would directly affect the mass population and provide essential resources they need to succeed: education, security, and representation. Even in an imaginative standpoint though, these solutions are easier said than done.
ReplyDeleteInvesting in infrastructure not only requires a lot of money, but it also requires meticulous planning, regulation, and changes that would have to trickle down perfectly to town halls. A widespread investment in infrastructure does not guarantee that it will be as convenient and efficient as people may want it to be, because there is always room for loopholes and errors down to a level of a pencil point on paper. Like a game of telephone, a planned infrastructure overhaul could quickly turn into a huge mess and a waste of money.
One of the most obvious and most important issues for education investment is money, because without the money, education cannot become more widespread and accessible, and the system cannot improve upon itself. Though, besides material aspects, there is also personal losses that are at stake. By making education more universally accessible, private schools who run for their own profit will either oppose the education investment because they are more likely to lose profit, or find some way to work around the profit losses--whether it's firing teachers or budget cuts--which may even decrease the standard of education.
Also, encouraging the formation of worker unions will surely face huge opposition from corporations. One of the biggest obstacles to investing in unions is the social tension that would come with it. The question is how far would the tension go? Worker mistreatment, blackmail, violence, pay cuts and other forms of ruthlessness. Protests and scandalous behind-the-scene schemes... how much corruption would be faced for a certain social equality? It all depends on the people who decide to take action.
(Even if the proposals somehow surface in real-life as flawless as they were in theory, there is a lot of room for countless issues to rear their ugly heads. It may be the ones suggested to a lesser or more extreme degree, or perhaps not at all. Or, the most difficult obstacles would be the ones no one saw coming. It's hard to tell without more sufficient evidence to how exactly everything would be laid down, but then again, life is as clear as puddle of unforeseen circumstances. So, emphasis on the word "uncertainty" here. )
In order to fix the growing issue on wealth inequality, we must may work pay (Solution #1), invest in education (Solution #3), and tax the wealthy (Solution #5). Currently, the middle classes wages are staying the same despite the inflation, so in order to lift them out of poverty they must get more for their work. Most of the middle class works in hotels, restaurants, and as caretakers which are all jobs that receive minimum wage. Therefore the minimum wage should be raised. A strong middle class creates a stable economy because they are the consumers; if they have more money they will spend more money which creates a better economy and more jobs which will help lift others out of poverty and decrease the gap because the middle class and the wealthy. Obstacles to this solution are that if the minimum raise is raised companies and small businesses may begin to lay off more workers because each worker costs more to them. Investing in education would create a more educated work force which would make us one of the "winners" of the globalized economy. Education from pre-school to higher education should be an attainable option for all people, not just the ones who are willing to pay for it. In the end of this decade about 8 in 10 jobs will require higher education, and the countries that are more educated than the United States will become better competitors than the US. A main obstacle would be making colleges and higher-education completely free and accessible to all. Lastly, taxing the wealthy would take away more money from them but this would cause the biggest issue. The rich do not want to be punished for making more money, but at the same time the poor should not be paying the same amount or even more taxes than the wealthy.
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ReplyDeleteEconomic inequality is a major problem right now in the United States. It heavily affects the middle class because they are not receiving a good salary for their jobs and they are not receiving financial benefits, such as cheap health care or free education. This problem is also a huge issue because while the average salaries for middle class workers keep declining, average salaries for higher-ranking workers, such as doctors, lawyers, and business executives, are skyrocketing. There are three solutions that can help clean up this big mess. The three most useful solutions to reducing wealth inequality would be: investing in education,pay for the investments of the people with higher taxes on the wealthy, and to get big money out of politics. Starting from the 1970's, the United States Government began to invest in education for it's own people less and less over time. Because of this, the American people are slowly becoming dumber and they cannot keep up with competing with other nations in such a globalized economy. Therefore, American businesses find no jobs in America and those jobs are provided overseas. This is slowly decomposing America's economy and this must be stopped. Another solution to this mess would also be for the government to make more investments in the people while taxing the wealthy. Most of our "wealthy" Americans make at least $1-$10 million a year. What do they need that money for? Do these wealthy people need a yacht that is the size of a skyscraper? Do they need to have 10 million dollars sitting in their savings account? Of course not! There should be more money taken away from the wealthy so the economic inequality gap will become smaller and smaller and the government will have more money to invest in it's own people towards better education and more coverage of certain costs such as health care, higher education, and social benefits. Another solution would also be to get big money out of politics. American politicians have millions, and some, even billions of dollars in their pockets. That money is just sitting there while many poor and middle-class citizens are suffering from a lack of a good salary and good social benefits! That money must be taken away from them and again, it must be incorporated to the middle class and poor people for their own benefits. The politicians must also be on the same level as average, middle-class people in order to achieve maximum economic equality.
After reading Reich’s proposed solutions, I feel that it would be most useful to take the solutions make work pay (#1), invest in education (#3), and pay for these investments with higher taxes on the wealthy (#5).
ReplyDeleteThe first solution of make work pay would help people working full time for minimum wage be able to live comfortably. If they work 40 hours a week and only earn around $8, give or take a few quarters, they are making about $320 a week. Therefore, roughly $16,000 a year. That is well below the poverty line when these people are hard working. Raising the minimum wage to $15 would produce full time workers with an annual estimate of $31,000. This is living in middle class standings, lower middle class, but still middle class. The problem with raising minimum wage is employers may either have to hire less people, increase prices on goods, or even buy machines to do the jobs of humans creating an even bigger problem.
Then, his third solution of invest in education would provide those with a lower income to receive the same education as everyone else. Higher education would not be a privilege anymore to those that could afford loans and debt, it would be an offer most people would choose not to refuse. The issue with this solution is the question of where would the money come from to fund equal education for all? Only so many people can fit into one lecture hall or dorm in one building.
Finally, the fifth solution of paying for investments by placing higher taxes on the wealthy would solve the issue stated above. The government would have more money to give to universities to fund higher education for all. One factor to consider if putting this solution in effect would be that if we take more from the wealthy, or try, they will fear having nothing and put their money elsewhere and invest it in other countries and have nothing left to spend here or nothing for us to tax them with. This would also jeopardize the, disproved, "trickle down" method.
The three most useful solutions for reducing wealth inequality are investing in infrastructure, paying for these investments with higher taxes on the wealthy, and getting big money out of politics.
ReplyDeleteBy investing in infrastructure, people of all classes will be able to be more productive, and will jump start the “Virtuous Cycle.” The major obstacle behind doing this is the funding.
Therefore, we should pay for these investments by taxing the wealthy more. It only makes sense for the wealthiest of Americans to pay their fair share back into the economy, especially since some tend to hoard their wealth and not spend it, hurting the economy. The major obstacle to this would be lobbying, as the corporations influencing lawmakers are owned by the very same wealthy americans new legislation would effect.
THEREFORE, we should eliminate big money from politics. If this conflict of interest can be eliminated, lawmakers will be able to pass the legislation necessary to end severe inequality. The major obstacle here is that private funding of candidates is so prominent, and shifting to publicly funded candidates making it into office could take a long time and a lot of public support.
America is one of the leading nations in the world when it comes to economic inequality. Robert Reich, former Secretary of Labor under Bill Clinton, proposes ten methods that could be used in order to lessen the inequality this nation faces. Out of his ten, I find the three proposals numbered 1 (make work pay), 2 (unionize low-wage workers), and 3 (invest in education). Reich’s idea to to raise minimum wage will allow the country to lower it’s poverty index and help those working in lower-paying industries, like food service and child care, to live a comfortable life in the middle class instead of in poverty. Additionally, unionizing low-wage workers will give that lower-middle class the bargaining power it needs in order to secure gains and ultimately gain the support needed in order to make those bargains. Finally, it is crucial for the American society to invest in education. Far too many people are unable to get affordable, quality education, simply because there isn’t enough invested into it. Once Americans invest their time and money into a quality education that’s affordable, the middle class will thrive and the virtuous cycle of the American economy will be able to run smoothly again. If this inequality of wealth is not soon fixed, the American economy will continue to suffer until it very well plummets into an unrecoverable abyss.
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ReplyDeleteAmerica is one of the leading nations in the world when it comes to economic inequality. Robert Reich, former Secretary of Labor under Bill Clinton, proposes ten methods that could be used in order to lessen the inequality this nation faces. Out of his ten, I find the three proposals numbered 1 (make work pay), 2 (unionize low-wage workers), and 3 (invest in education) the most compelling and effective ways in helping the nation. Reich’s idea to to raise minimum wage will allow the country to lower it’s poverty index and help those working in lower-paying industries, like food service and child care, to live a comfortable life in the middle class instead of in poverty. Additionally, unionizing low-wage workers will give that lower-middle class the bargaining power it needs in order to secure gains and ultimately gain the support needed in order to make those bargains. Finally, it is crucial for the American society to invest in education. Far too many people are unable to get affordable, quality education, simply because there is not enough invested into it. Once Americans invest their time and money into a quality education that’s affordable, the middle class will thrive and the virtuous cycle of the American economy will be able to run smoothly again. If this inequality of wealth is not soon fixed, the American economy will continue to suffer until it very well plummets into an unrecoverable abyss.
The three of Reich's proposed solutions that I feel would be most useful to reducing wealth inequality are number 1 (Make work pay), number 5 (Pay for these investments with higher taxes on the wealthy), and number 7 (Raise the estate tax and eliminate the “stepped-up basis” for determining capital gains at death).
ReplyDeleteFor number 1, to achieve this goal would be to raise the federal minimum wage to $15 an hour, abolishing the tipped minimum wage, and expanding the Earned Income Tax Credit. Although this may seem easy, there are a few obstacles that would cause this solution that would not allow Americans to receive their new income. Theses obstacles include the questioning of people's qualifications. Once the minimum wages rises, companies might start looking for people with better qualifications. This could make a negative affect on the people already working in the companies because there will be a better chance of them being let go from their job. Other problem is that there might be less jobs because employers need money for other things in their company.
For number 5, to achieve this goal would be to raise the top marginal tax rate and close tax loopholes that disproportionately favor the wealthy. In a perfect world, a solution like this could easily go into effect. The problem is we do not live in a perfect world, moreover, there would be some obstacles that could interfere with the payment of these investments by making the taxes higher on the wealthy. These obstacles include the huge class divisions. In this, a problem could occur because the margin between middle class and the 1% is so gigantic. Distaste may arise between these classes considering how different they live their lives. This could cause people believing in unfair taxing of certain groups of Americans.
For number 7, to achieve this goal would be to raise the estate tax and eliminate the “stepped-up basis” for determining capital gains at death. With this solution in effect, the lower classes and the middle class would be able to gain more money because this solution would partially remove inherited money from the 1% back into the system. The only obstacle that may occur in this situation would be large protests from the wealthy. This could happen because some people may believe that it is unfair for their family to lose money that they have gained by themselves.
The three solution Reich presents above that would be the most effective at reducing the gap of wealth inequality are to “Make work pay”, “Unionize low-wage workers”, and “Give all Americans a share in future economic gains”.
ReplyDeleteMany people are desperately searching for a job to provide for themselves and their families. However, those same people are often finding themselves having to settle for lower paying jobs. People laboring for hours should be able to earn the money needed to get by. One woman in the movie Inequality for All stated that she had about $25 dollars in her bank account and that she couldn’t afford to feed her family. Despite this, she was working every day to try to earn enough to provide for her family. By raising the minimum wage, everyone, no matter their job, will be able to earn the money needed to live without the stress of not being able to put food on the table.
Additionally, aside from raising the minimum wage, low-wage workers should be unionized. Unfortunately, one person is going to have little effect on the labor industry. Unions give workers the power to make themselves heard. Labor unions give the bargaining power to the workers rather than their employers. By giving workers the ability to barter for a better way of working, more and more low-wage workers will be able to work in better conditions for wages that will support their families and themselves.
Finally, by giving all Americans an equal share in future economic gains, poorer people are not left out of chances to rise above their current status. Many Americans born into poverty have little opportunity to rise out of poverty. Not everyone should be born rich, but everyone should have the chance to improve his status through hard work and determination. However, for many, no matter how hard they work, this is not the case. By giving everyone a share in the economic future, they are also given a chance to better their standards of living.
These three reasons are likely to help the lower middle class who are living in poverty rise up to meet “middle-class standards”.
Out of Reich's 10 possible solutions for reversing widening wealth inequality, the three most useful are to make pay, invest in education, and to tax the wealthy. Retail, restaurant, and hotel jobs are paid the least. If minimum wage was raised, even these menial jobs would be paid more, and the poor and middle class would be getting more income. The obstacle in the way of this plan is that employers would not want to pay all their employees this much. Instead, they will replace people with machines and that would cut jobs and the gap of wealth inequality would grow rather than shrink. Investing in education would give many more people a chance to get an education. More people will have the knowledge they need to get by in life and in work. Also, higher public education, such as colleges, will be more affordable. Unfortunately, money is still the problem. Where will we get the money to invest in education? How many people would be willing to support this project? Lastly, taxing the wealthy will close the gap more; the wealthy will have less money. This will also solve the problem of funding for education. This extra money can go towards investing in higher quality education. The only problem with this is that the wealthy are the so-called "job creators", so others will oppose. If the wealthy are taxed, it is believed they will not create jobs anymore. The only thing we know for sure is that this large gap between the 1% and everyone else needs to be shrunk.
ReplyDeleteOut of the ten offered solutions, the three that would help America escape the growing income inequality would be number 3 invest in education, number 5 pay for investments with higher taxes on the wealthy, and number 9 give all Americans a share in future economic gains. In order to follow through with equality for all, everyone deserves the potential of achieving higher education. For some, that is out of consideration because higher education is too expensive, and they therefore are unable to have an equal chance at getting a job with reasonable or high pay. Investing in higher education would make it more affordable, and truly make higher education an option for everyone, creating qualified workers, to become employed in skilled jobs. An obstacle for this solution would be higher education becoming affordable, but people not taking advantage of the opportunity for higher education, or being ineligible to attend a now affordable higher education program. Currently, there are several tax loopholes that favor the wealthy, while the middle class is already suffering from low wages, and high taxes. The purpose for giving the wealthy tax cuts, was that the money would trickle down to the middle and lower class, which has proven to not work. Therefore, these policies should come to an end, and the wealthy should pay taxes which would then fund repairs to the income inequality by supporting infrastructure and higher education. This could become an obstacle however, because there could be other loopholes, or tax breaks for those wealthy people who are already avoiding paying certain taxes, and infrastructure and higher education funds could not receive a sufficient amount of money to really repair any income inequality. Finally, all Americans should receive a share in future economic gain, because that would allow people to affordable comfortable lifestyles, without completely struggling, even if they are born into poverty. This would assist some to climb the income ladder by receiving a higher education with the money they had received. This solution could backfire because the recipient of the money could not spend it wisely, and still be stuck in a financially dangerous situation with no solution in sight.
ReplyDeleteOut of Reich's 10 solutions to reducing wealth inequality, the 3 most useful would be make work pay, invest in education and pay for these investments with higher taxes on the wealthy. America's economy depends on the middle class. They account for 70% of consumer spending. If the working american is given a higher minimum wage, they will have more money to spend, putting more money back into the economy. People who work hard should not have to live with less than others who do not work as hard. A major obstacle to this though would be that if a employer has to pay his/her workers more they could lay more people off to account for the difference or they would find a alternate and cheaper work source. Technology could replace a job for someone. Continuing, investing in education would decrease the gap between the rich and poor because when people have a degree they can attain better jobs. Also, technical schooling already prepares a person for work because they graduate with the skills they need to enter a job. The obstacle for this solution however is that as employees become smarter and more skilled at their jobs, the work force would become more competitive and finding a job could be harder. If everyone has a degree, there isn't much to distinguish between potential employees. Finally, having higher taxes on the wealthy would continue to decrease the wealth inequality because people with the money and who can afford to lose more of it would lessen the burden of taxes on the middle class. Once again, the middle class would have more money to spend, ultimately helping the economy. The problem with this though is that their would be heavy opposition from the 1% who believe in the trickle down theory. The money they earn is theirs and by having more of it to spend would eventually find its way back into the hands of the middle class. Taxing the 1% could also be seen as unfair or unequal because a single class of people are being targeted. Although Reich's solutions could lesser the gap between the middle and upper class, they would have to be implemented in the right way in order to lessen the chance of opposition.
ReplyDeleteOut of Reich's ten proposed solutions to fixing economic inequality, I believe most strongly in making work pay, investing in education, and investing in infrastructure. Better education and better infrastructure that offer more opportunities to those who would not normally have them would create smarter and more capable workers. And if we make the amount a person gets paid worth the time they spend at their job by raising the minimum wage, it may make it easier for people to live their lives comfortably and independently, which I believe is important. None of Reich's ideas come without pitfalls, however. One of the major obstacles of "making work pay" is that some companies may not be able to sustain a $15 minimum wage and keep the same number of employees that they had at the current minimum wage. This would mean that they may have to cut jobs in order to pay their employees what they are due. When it comes to investing in education and infrastructure, the biggest problem would be finding the money to fund it all; it would take some rearranging of the budget before we could effectively invest in these ideas.
ReplyDeleteEquality is an impossible goal. It is a mirage that is nowhere in the near future. Despite this, Robert Reich does have a few things that can lessen the gap between the rich and poor. One that stood out to me was to make work pay. Buy raising the minimum wage, a person who puts in the effort and logs the hours would not be in poverty. This makes sense but it does have drawbacks. If companies cannot afford a $15 minimum pay, they would lay people off, causing many people to become unemployed. In the long run a raise in wages would work out but another solution Reich proposed that I cannot find a single downside too is investing in education. What a splendid idea! Education is one of the most important things for every person to have. By making quality schooling available to all, the playing fields will level. Suddenly hard work and dedication are needed to be ahead instead of the amount you can pay. The last idea of Reich’s that would work to close the gap between rich and poor is to pay for these investments by taxing the rich. It would anger them, but if they got passed the greed wouldn’t they see how much better this would be for everyone. They still have plenty of money, and children in poverty are able to go to college. It seems like a no brainer to me.
ReplyDeleteRobert Reich presents ten solutions to solve the ever-expanding problem of income inequality; however, of his ten only three solutions have the ability to succeed. In Post World War II America, the economy flourished thanks to investments in education, a growing American infrastructure, and high tax rates on the wealthy. (3, 4, and 5)
ReplyDeleteFirstly, investments must be made in education if the United States is to grow and flourish as it once did. In the fifties, America had one of the smartest work forces in the world. Our workers were the best in what they did and we were proud of such a fact. The only way this was possible for Americans was to attend college at an affordable rate and receive a high-quality education. In our current situation, American face insurmountable college costs. Due to this, the percent of Americans who have attended and graduated college has remained nearly constant for the past twenty years. If more people can become educated to a higher degree, American can recapture their intelligent workforce, and lower the effects of income inequality. In order to close a portion of the gap that is income inequality, a high-quality education for all must be established.
Secondly, Americans lack the infrastructure required to live a cost-effective life. Taking a step back, the picture comes into view: structural growth in American utilities, architecture, and transportation has stagnated along with income and college graduation rates. This old, antiquated, infrastructure is not suited for the twenty first century. The infrastructure currently found in many areas of America, was built decades ago, for technology that existed decades ago. Although, some citizens are lucky enough to have every piece of cutting-edge technology at their disposal, most people are not afforded that luxury. Investment in infrastructure will ensure every American receives an equal opportunity with equal infrastructure. Additionally, to build this new network of infrastructure, people will need to be hired, thus creating more jobs in America. Investment in infrastructure is a necessary stepping stone for America to cross over the river of income inequality it faces.]
Finally, how will all of these investment be paid for? An obscenely high tax must be imposed on the rich to both pay for these investments and reduce income inequality. In the 1960's, taxes on those making over $400,000 exceeded ninety percent. Perhaps such numbers may be too much, however, it remains a fact that without high income taxes on the wealthy, income inequality will persist to be a problem for all. These high income taxes on the rich are a necessity that cannot be avoided.
The combination of investments in education and infrastructure with high incomes taxes on those who already make too much will hopefully, bring the gap in income inequality to a tolerable level.
After seven years of supposed recovery from the recession that swept American in 2007, the gap between the wealthy and poor has yet again widened to a substantial amount. Reich recognizes this gap, and out of the ten solutions he proposed, three stood out to me. The first was to invest in education, something I strongly believe in. Being a junior in high school, a lot of us know the struggle of paying tuition fees. Many colleges ask $50,000 per year, which is what many middle class households make in a year. In the video, Reich talked about top countries having their statuses due to a skilled workforce, and these skills are only acquired through knowledge. America needs to invest in education to move forward, and as Reich said, “give every American an equal chance to make the most of himself/herself.” The second proposal that stood out to me was his idea to make work pay. It took me quite a while to decide my stance on this, but I have come to an agreement with myself, and that is that I’m neutral. The pros of raising minimum wage include increased consumer spending because of the higher prices on products, and more spending creates more jobs; living standards will improve, as well as mobility due to more income, and motivation to work and acquire skills due to a higher paycheck. However, there also cons. An increased minimum wage can reduce jobs because employers’, specifically small businesses, lack of willingness to pay more; it can also lead to large corporations turning to machines, and salary increases may disappear for people not affected by minimum wage. My stance is still neutral, though, because I feel like though minimum wage is a contributing factor to reducing economic inequality, there are still other ways to remove people working full time out of poverty. The last idea that stood out to me was to tax the rich more. I agree with this because in the video, it was mentioned the most of the rich don’t spend their money—they invest it. Therefore, taxes on the rich wouldn’t reduce consumer spending or effect employment as well, because so much of the rich’s money goes to investing in other things, and they are not the job creators.
ReplyDeleteReich suggested ten different possible solutions to bridge the gap in wealth inequality, and I believe that investing in higher education, higher taxes on the wealthy (with some revision on his description), and unionize low-wage workers are the best solutions. Investing in higher education is a good solution for wealth inequality is because majority of Americans cannot pay for higher education and heavily rely on loans, causing young adults going into the work force with debt overhead. When young adults are basically starting their lives with huge college debt and trying to pay rent and the everyday bills, it just causes the gap to expand. The students born into wealthy families do not need to worry about starting with debt, and therefore can profit from their earnings at the first job(s), yet the middle class or poorer families don't have the luxury of starting out with a financially clean slate.
ReplyDeleteAdditionally, higher taxes for the wealthy would help close the wealth inequality gap, although an unpopular choice for the most influential people. No one wants higher taxes, the thought of the government taking money from every well earned paycheck makes people cringe. However, it may be deemed necessary because the working class ends up paying more than the wealthy and more fortunate. It is understandable that the wealthy work hard for their money to and deserve it as well, but the idea that the wealthy will spend enough in the consumer market to give back to the economy is just not working, or not working well enough. Even the wealth man in the documentary explains that there is a limit to how much he can buy for himself and his family. He mentions that no matter what no person need to buy more than two pillows or 5 pairs of jeans, he's only human. There is just not enough return to the market from the wealthy to compensate for their excessive and successful revenue, and it is time for tax increase on the wealthy. However, I would like to remind the general public what should qualify as wealthy: If a family makes 90,000 dollars a year (before taxes), which is a little above the middle class by government standards, the government must consider circumstances within the household. For instance if this family has 1 or 2 kids, they could still be barely getting by. The government likes to forget the fact that when children are in the mix, it's not just the are essentials that are necessary like shelter, food, and clothing, but also the healthcare like braces, an activity or two for each kid, and belonging to a place of worship for instance. Although these are not considered necessary, it has become necessary in a society's social culture, something no parent would ever try to hold their children back from. I am not saying not add taxes to families under those conditions, but the families living comfortably to excessively with the bare essentials and the "social essentials."
Lastly, unionizing low-wage workers would be a possible solution to wealth inequality because wealth inequality grew when unions were declining, and it makes sense to make the opposite happen, to do the converse. In the late 1970's unions were declining, giving the workers less say, and the wealthy owners more power to "pushover" the working class. By unionizing low-wage workers, the bargaining power of the working class is gained. This helps give the working class get fair wages for their work, employee benefits, and advocacy for their employee rights. Fair pay rates for low-wage workers would help close the wealth inequality gap.
The United States is entering a time of economic decline with inequality and a large income gap separating the social classes. It is apparent that these inequalities can pose a threat to the idea of social classes, involving our economy and equal opportunity for all. The gap has widened, while the rich have only gotten richer, the middle class and poor have suffered tremendously. Our economy is dependent on consumers spending money, which accounts for seventy percent of economic activity. The rich spend only a small amount of their income compared to the middle class and poor, so a larger share of income goes to the top one percent. Middle class society is forced to borrow to subsidize the lack of income. Inequality also leads to less or no equal opportunity in the climbing of the social ladder. The middle class has fewer opportunities today than in the past for upward mobility on the ladder. The economy will never equalize, but to have a successful society is to allow the opportunity of rising the ladder.
ReplyDeleteRobert Reich has proposed a series of solutions as to what we must do to reverse the widening inequality in our society. He believes that there is no single solution to reverse it, but our future is not set in stone. There are ways to achieve social and economic equality, in the sense of everyone having the same opportunities. The first, and arguably most important, would be to invest in education. Education should be thought of as a public service, rather than a public investment. Every American deserves the equal chance to be the best person they can, especially due to an often unequal education system. From the first steps in early childhood education to graduating from a four-year public university, education should be funded by the government for its citizens. A major obstacle would be to get every state in the country to implement its own education system. However, it has the ability to unify a shifting social class gap by creating equal jobs and opportunities. As well, Reich believes in making work pay. By this, he means that raising the minimum wage will allow full-time workers to live outside of the poverty line or the barely making it. Workers in fields such as retail, restaurants, hospitals, hotels, and care facilities tend to be paid very little for the amount of work that is done. Raising the minimum will give these workers a chance to help rebuild the strong middle class and close part of the gap. Raising the minimum will also raise the prices of goods and services if more money is being distributed. A final way to reverse the gap is by taxing those who are at the heart of the cause, known as the 1%. Tax cuts in the early 2000s as well as the 1980s have led taxes once imposed upon top incomes to be slashed. The wealthy were then able to find tax loopholes, which ultimately would help trickle down to the lower classes. Taxes are known to favor the rich, with the after-tax incomes rising and the middle class income slowly falling. Raising taxes and cutting the loopholes will open up money to be used in investments to achieve equality. Despite it helping the general public, the rich will always oppose the argument. Reich states that the United States will reverse the trend of widening inequality eventually, as there is no choice. The nation first has to spread the word for the gap to be shut.