Causes of wealth inequality in the United States.
Income disparity occurs when the wealthiest people in society earn more money than the
lowest income earning people. Wages, rent, gains from investments, and real estate sales are all
forms of income. Wealth inequality has grown in the U.S during the previous thirty years, as
money has flowed unevenly to wealthy people (Ranaldi & Milanovic, 2021), and very little
reaches the low-income earning people. The main causes of the wealth inequalities in the United
States of America are reduced labor force, trade, and globalization.
The complications of increased labor market disparities contribute to the situation. Labor
market changes in the U. S. include lower workforce participation, unchanged median salaries,
and a falling percentage of labor income. These developments are undeniably linked, but they've
also been investigated via a variety of research methodologies, which can inevitably lead to a
variety of policy consequences. It is vital to understand the intertwined and diverse character of
these arguments in order to establish policy responses that address the root causes of disparity.
A second explanation is trade and globalization. Scholars believe that increases in
commerce and offshore are a driver of wealth disparities. As per this concept, greater trade
between the US and other countries of the world, especially China, has amplified the number of
importation into the United States economy, leading to loss of jobs in businesses that initially
produced these items in the country. Trade between countries has had an impact on both revenue
and employment. These trading patterns have resulted in fewer employees, lower labor force
participation, and slow inflation-adjusted pay growth. Devaluation of the US currency and other
steps to make US exports more competitive are two policy possibilities for reversing this trend.
The role of healthcare disparities in relation to income and wealth disparities.
The degree of economic imbalance in an area is associated with obesity, life expectancy,
and infant mortality. Wealthy people have easier access to healthcare services than the poor or
minorities in society. The wealthy may afford higher-quality services and private life insurance.
Inequity in wealth appears to be associated with lower health outcomes.
Poverty is intimately connected to bad health. Black Americans, with the exception of
Indigenous peoples, have considerably higher death rates than any other racial and ethnic
category. As of March 2, 2021, the coronavirus has killed 256 Indigenous people, 178 Black
Americans, and 147 Latinos, and 175 Pacific people per 100,000 Americans (in their respective
demographics), compared to 150 Whites and 96 Asians (frank et al., 2021).
People with higher incomes are healthier because they eat foods that are of nutritious
benefits. Poverty, as well as the quantity and supply of money, are the main causes of medical
inequalities amongst people. It directly influences their health by affecting the goods and mostly
the foods they purchase, which may either benefit or harm their health. It also has an effect on a
variety of factors that have an indirect effect on health, such as social status and the ability to
cope with unexpected situations.
Estimation of the wealth gap
Wealthy people can easily access private insurance. Private life insurance is only
available to the richer members of society. According to the study undertaken by the Kenan
Institute of Private Enterprise, persons with enough life and property insurance had the
maximum wealth, whether measured in financial assets or housing value (2022). According to
the study, for every 1 dollar gain in financial worth, a person's term life insurance cover limit
rises by 68 cents, and the homeowner's insurance policy coverage limit improved by $2.25.
Wealthier families are better protected against the monetary implications of death or property
damage, not just because they have more money in the bank, but also because their insurance
payments are larger.
With the help of insurance, households are supposed to be able to deal with negative
shocks. The poorest members of society, who have bad dietary habits, are the ones that require
the most insurance. They acquire ailments such as obesity and high blood pressure and require
medical care, but they are unable to do so owing to income inequality. Wealth disparity is
exacerbated by the fact that those who are in need of insurance cover the greatest are not buying
it as they should.
Evaluation of increasing access to affordable or free healthcare
Greater access to low-cost or free healthcare can help to lessen income and wealth
disparities. According to research carried out by Buettgens et al., (2021) Affordable Care Act
reduced income inequality considerably. States that increased medical assistance had an increase
in growth rates. The (ACA) increased healthcare insurance coverage the most in the US
healthcare system, and it may have divided up the money among various populations (Buettgens
et al., 2021). Access to affordable healthcare services helps reduce wealth disparities as people
are able to work better when they are healthier and this improves wealth disparities among
minority people.
Commendation on how to reduce income or wealth inequality
I would reduce wealth inequality by investing in education if I were a federal
policymaker. The wealthy people in the society are also very learned. The poor people are
mostly less learned. The most critical factors leading to persisting disparity across people are
differences in early education and school quality. Investing in education at a young age may help
people move up the economic ladder, boost productivity, and hence increase wealth. People will
be able to afford better healthcare services and also insurance.
References
Buettgens, M., Blavin, F., & Pan, C. (2021). The Affordable Care Act Reduced Income
Inequality In The US. Health Affairs, 40(1), 121-129.
https://doi.org/10.1377/hlthaff.2019.00931
Do, D. P., & Frank, R. (2021). Unequal burdens: assessing the determinants of elevated COVID19 case and death rates in New York City’s racial/ethnic minority neighbourhoods. J
Epidemiol Community Health, 75(4), 321-326.
Ranaldi, M., & Milanović, B. (2021). Capitalist systems and income inequality. Journal of
Comparative Economics.
kenan. (2022). Could Insurance Coverage Disparities be Widening the Wealth Gap?.
kenaninstitute.unc.edu. Retrieved 23 February 2022, from
https://kenaninstitute.unc.edu/kenan-insight/could-insurance-coverage-disparities-bewidening-the-wealth-gap/.