Research Paper: Societal Disparities Motivated by Income Inequality

Colten Robertson
Jun 19, 2020 · 9 min read

The United States is the largest economy in the world and the prevalence of economic inequality is the highest among developed nations. There are many definitions for economic inequality, but Bapuji defines economic inequality as “an uneven dispersion in resource endowments, access to productive resources, and rewards for labour in a social collective that limits the fulfillment of human functions” (Elmes, 2018). This concept is widely seen in the United States and persists in wealthy nations for a number of reasons. One of the reasons inequalities still persists is that as technology becomes more advanced the income gap grows larger. Low skilled jobs such as packaging and manufacturing are increasingly being performed my machinery (Leung, 2015). Tax laws and work requirements can also be attributed to the growth of economic inequality because tax cuts do not always pave the way for economic success. They are susceptible to causing deficits and the consequences that they make are left up to the most vulnerable citizens to bear the failure (Fogg, 2013). Tax policy is important because it plays an important role for funding social programs, health and education. Without the proper funding infrastructure becomes eroded and businesses are unlikely to invest in those areas. Work requirements for receiving social programs limit those who can receive benefits and with less disposable incomes, these individuals have to go without food and dive further into poverty and food deprivation.

Disposable incomes are shrinking in the United States because of rising costs in every system. As this decreases a prevalence of food insecurity emerges leaving thousands of families reliant of food kitchens and social programs. Food insecurity is growing at an alarming rate and hunger impacts human well-being and development, affecting attention and cognition, ethical decision making, and even strategic, risk-taking behavior (Elmes, 2018). This impacts African Americans and Hispanics well above the national average (Dickman, Himmelstein, and Woolhandler, 2017). Rural areas face greater food insecurities than cities for they have less resources. Since this has an impact on behavior, kids in households that suffer from food insecurity are more likely to fall asleep in class and have trouble in school due to their poor diet (Kearney, 2016). These children are labeled as lazy, but since their parents can’t afford their kids’ wants they use unhealthy food as a way to show their love. This practice leads to more sickness among the poor, but also a large medical bill. Food assistance programs have improved, but those improvements have been focused on the high and medium socioeconomic brackets. Programs such as The Supplemental Nutritional Assistance Program (SNAP) “has repeatedly been shown to reduce food insecurity for low-income families,” but congress and the Department of Agriculture have rejected proposals to establish nutritional requirements for SNAP (Granados, 2018). Without the proper amount of money to buy nutritional foods, which is more expensive, impoverished people may also not have the knowledge of a healthy diet and SNAP is rendered ineffective on fighting diseases such as obesity in the lower class. While children who live in poverty have a worse diet it is also apparent that they receive lower test scores.

The Washington Center for Equitable Growth released a study highlighting the widening educational achievement gap between wealthy children and lower-class children. Before children enter kindergarten, poor children are already at a disadvantage because in terms of time and money rich children have more resources to prepare for school (Reardon, 2014). The socioeconomic education gap in elementary school is an early indication to disparities in college enrollment. Harvard University political scientist, Robert Putnam, contributed to Reardon’s study citing a correlation between wealth and income to school leadership, participation, volunteer work, and extracurricular activities among students. Of those low-income students who applied to highly selective colleges or universities only two percent were admitted compared to fifteen percent of high-income students (Reardon, 2014). Students in cities and states with higher income inequality have higher high school drop-out rates. Brookings Papers on Economic Activity cites that “children from lower socioeconomic backgrounds perceive a lower return to staying enrolled in school” (Kearney and Levine, 2016). Their research highlights a correlation between a mother’s education level and wage gains. In states with high inequality households see much lower rewards, in terms of wages, from each additional year in school (Kearney, 2016). States like Alabama are labeled as high-income inequality and the dropout rate is twenty-five percent, compared to a state like Nebraska whose drop-out rate is only seven percent and they have low income inequality. The American Dream is becoming further out of reach for those in lower income communities.

A student’s lack of resources in their community and school contributes to the disproportionate representation of minorities in prison. However, research has found that this disparity is not because of the stereotypical assumption that minority groups are lazy. According to the World Economic Forum economic disparities do lead to more crime (Winkler, 2014). This is supported because when increased economic inequality is present social tensions escalate. “Income inequality alone explained 74% of the variance in murder rates and half of the aggravated assaults. However, social capital had an even stranger association and, by itself, accounted for 82% of homicides and 81% of assaults” (Winkler, 2014). Social capitol is lacking for the impoverished leading them internalizing fewer social norms and believing that crime can be acceptable. Federalism also limits the authority of the federal government and under the United States constitution there are gray areas when it comes to responsibility in areas such as social programs, health, and safety (Leung, 2015). The decision is left up to the state government and the allocation of resources is not done properly. The division between the state and the national government gave the states a lot of authority with traditional police powers. That police power is supposed to address a wide range of citizens’ concerns including health, safety, and morals. This great power has not been handled well by some states starting with slavery to Jim Crow and now entrenched in drug laws as an attempt to “reinforce existing racially stratified access to power by balkanizing mobilization efforts among urban minority groups that would be natural allies, diffusing political pressure about poverty across a wide range of political and legal venues, and limiting the scope and tenor of central government’s power to address social problems” (Miller, 2010). The current system of federalism in America has allowed the federal government to escape pressure and responsibility for the continuous racial and economic inequality. Federalism has also led to The United States becoming “the worst in terms of income gap growth. (Miller, 2010).

Lower-class individuals are already unlikely to have insurance or have a policy that has insufficient coverage, so the likelihood of them seeking medical help is decreasing. With medical costs for women being more expensive lower-class women are even less likely to seek medical attention. Women with employer-based insurance have higher out of pocket costs too (Dickman et all, 2017). Due to high health care costs, medical expenses put pressure on families causing “34% of insured Americans with difficulty paying medical bills [being] unable to pay for food, heat, or housing. 15% took out high interest Payday loans, and 42% took on extra jobs or worked additional hours” (Dickman, 2017). Among those lower-class people who can financially risk seeking medical attention they cannot see physicians in a well-funded, high quality hospitals. They are forced to seek treatment in lower grade hospitals even though minorities, primarily African Americans, tend to live closer to high-quality hospitals (Owens, 2015). Before a person living in poverty is able to think about healthcare, they also must think about housing.

Home ownership has its own disparities because of four things: realtor bias, redlining, and systematic steering as well as predatory lending. Systematic steering involves influencing a buyer’s choice of communities based upon the buyer’s race, color, religion, gender, disability, familial status, or national origin (Kang, 2014). This unfair practice also plays into realtor bias. This bias limits a buyer’s options because of characterizations such as a school with low test scores or a community with declining schools could really mean that there are different races or ethnicities prevalent in that neighborhood (Hero and Levy, 2014). Neighborhoods then become race based and if people do not move there the funding for infrastructure is cut and buildings start to become dilapidated. Economic inequality also contributes to predatory lending practices, such as financing someone for a sub-prime loan when they are eligible for a prime loan. Wells Fargo is a bank known for using predatory lending practices. Recently Wells Fargo was sued for discriminating against black and Latino homeowners in California, by pushing them into more expensive mortgages than white borrowers (Egan, 2018). This act on minorities and low-income communities has reduced the values of homes, increased foreclosures, and limited property tax revenue. Finally, redlining refuses a form of loan or insurance to someone because of the area that they live in. Redlining hurts majority minority neighborhoods. They are often deemed undesirable (Kang, 2014). Since homeownership is the number-one method of accumulating wealth, the loans for citizens living in the redlines are more likely to be unavailable or very expensive. Leaving the borrower unable to pay.

Economic inequality in the United States reaches across every system and has a major impact on communities that are majority minority. These practices keep the lower-class poor and leave them sicker than any other class. Economic inequality leads to food insecurities and the need for assistance has grown, but applying work requirements to programs would only hurt the lower class. More funding for infrastructure would create a cleaner environment and enable more people to invest their businesses in those areas. That would help lead to a decrease in systematic steering since those communities are no longer in an “incline” and more educational opportunities would be present. Expanding quality healthcare access would lead to a decrease in mass sickness among the poor and gaining Medicaid coverage reduces rates of clinical depression, financial problems due to illness, and mortality (Owens, 2015). With the financial burden lifted less people would go into bankruptcy due to medical bills and could enable them to see qualified physicians in good hospitals. More disposable income would also allow for lower-class individuals to afford more healthy food and shrink the amount of food insecurity. This would also lead to less sickness among the poor because they are able to eat more nutritional foods. Their children would be rewarded with less sugar and fat filled food, which would cause a decline in obesity. Economic inequality causes many disparities, however, if people rallied as one and demanded change in greater numbers, everyone will be heard and progress can be made to reverse these abhorrent practices.

References

Dickman, S. L., Himmelstein, D. U., & Woolhandler, S. (2017). Series: Inequality and the health-care system in the USA. The Lancet, 389, 1431–1441.

Egan, M. (2018, February 27). Wells fargo accused of preying on black and latino homebuyers in California. Retrieved November 14, 2018, from https://money.cnn.com/2018/02/27/investing/wells-fargo-sacramento-lawsuit-discriminatory-lending/index.html

Elmes, M. B. (2018). Economic inequality, food insecurity, and the erosion of equality of capabilities in the United States. Business & Society, 57(6), 1045–1074.

Fogg, R. (2013, September 16). Income inequality persists. Retrieved from https://emorywheel.com/income-inequality-persists/

Granados, S. D. (2018, March 17). The Food gap: income inequality and disease disparity. Retrieved November 10, 2018, from http://harvardpolitics.com/culture/food-gap/

Hero, R. E., & Levy, M. E. (2016). The racial structure of economic inequality in the United States: Understanding change and continuity in an Era of “Great Divergence.” Social Science Quarterly (Wiley-Blackwell), 97(3), 491–505.

Kang, S. (2016). Inequality and crime revisited: effects of local inequality and economic segregation on crime. Journal of Population Economics, 29(2), 593–626.

Kearney, M. S., & Levine, P. (2016, July 29). Inequality undermines the value of education for the poor. Retrieved November 10, 2018, from https://www.brookings.edu/blog/social-mobility-memos/2016/03/16/inequality-undermines-the-value-of-education-for-the-poor/

Leung, M. (2015, January 22). The causes of economic inequality. Retrieved from https://sevenpillarsinstitute.org/causes-economic-inequality/

Lisa L. Miller. (2010). The invisible black victim: How American Federalism perpetuates racial inequality in criminal justice. Law & Society Review, 3(4), 805–839.

Owens, A. (2015). Housing policy and urban inequality: Did the transformation of assisted housing reduce poverty concentration? Social Forces, 94(1), 325–348.

Reardon, S. F. (2018, April 18). Income inequality affects our children’s educational opportunities. Retrieved from https://equitablegrowth.org/income-inequality-affects-our-childrens-educational-opportunities/

Winkler, H. (2014, August 25). Does inequality increase crime? Retrieved October 29, 2018, from https://www.weforum.org/agenda/2014/08/mexico-study-income-inequality-crime/

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Colten Robertson

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Writing about my passions — politics, policy, and government. On a pursuit to form a more equitable and inclusive society.

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A group of independent thinkers holding elected officials accountable, challenging social norms, and bridging divides by speaking truth to power.

Colten Robertson

Written by

Writing about my passions — politics, policy, and government. On a pursuit to form a more equitable and inclusive society.

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A group of independent thinkers holding elected officials accountable, challenging social norms, and bridging divides by speaking truth to power.

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