The wealth gap in America can be defined as the difference in the measurement of income and wealth inequality between different classes in society. Hoffmann et al. (2020, p.52) state that “the change in US income inequality over the last 40 years is one of the most extensively studied topics in economics.” A report by the National Fund for Workforce Solutions indicates some of the defining traits of the wealth gap, including the fact that white workers are less likely to be displaced from their current jobs by automation compared to workers of color and are about 50% more likely to hold good jobs (Langston et al., 2020). The widening wealth gap adversely affects the working class, middle class, and underclass.
Over the past 30-year period, the median wealth for high-income households exceeds that of families in other groups by considerable amounts. The most significant consequence of the widening wealth gap is that the rich are getting richer while those in lower-income households struggle to meet their needs. “For most Americans, obtaining the needed resources to achieve this goal requires delayed gratification, personal and family sacrifice, and frugality” (Barnes & Jaret, 2003, p.219). Higher wealth inequality is also closely linked to increased crime rates and limited access to education for middle-class workers, the working poor, and the underclass.
The American Dream is slowly slipping away from middle-class Americans, signifying a failure in the promise of upward mobility, which represents the middle and underclass movement to a higher social class. National trends indicate that over 90% of children born in the 1940s recorded higher earnings than their parents. However, “over the past fifty years, this measure of the American Dream has been in decline” (Opportunity Insights, 2021). Today, less than half of the children can earn more than their parents.
Structural economic changes have also impacted the workplace concurrent with the widening wealth gap. Over the past 40 years, a shifting economic landscape has been driving significant changes in the American workspace. Some of the most noticeable changes include employment opportunities that increasingly lie in jobs that demand employees to possess higher analytical or social skills. Consequently, modern employment opportunities are drastically increasing for positions that demand greater preparation, whether through training, education, or experience. However, manual and physically demanding labor, often common among the underclasses and working class, is fading in importance.
Different factors have played a role in these changes in the American workplace. For instance, a decline in worker bargaining power and unions greatly impacts employees’ various opportunities and working conditions. Unions are meant to safeguard the well-being of employees, whereby a vast majority are categorized as either middle-class workers, the working class, or the underclass. A union decline directly corresponds to increased workplace inequality that hinders the American Dream. Automation and technology also contribute to workplace changes by reducing demand for middle-skill jobs. Globalization and outsourcing of jobs have also changed the composition of companies within the US workplace employment (Eisenbarth & Chen, 2022). The consequences of these changes to low-income earners include widening disparities between low and high-wage sectors, lack of benefits for lower-skilled workers, income volatility, and reduced bargaining power for the working class.
The wealth gap differences are partly due to the middle, working, and underclass needing higher education to afford a high-paying and convenient job. While postsecondary education remains a critical turning point for income growth for low-income households, higher education no longer provides upward mobility assurances and is becoming less attainable. Emerging technologies and modern business practices have raised the bar on educational minimums. Consequently, the cost of higher education is rising faster than incomes earned by the middle class, working class, and underclass, putting college out of reach to many in the group. The few who manage to join reputable postsecondary institutions are only further challenged by significant records of student debt burdens, while most graduates end up employed in low-wage jobs. Therefore, though higher education still correlates to better income earnings, systemic barriers around affordability and access mean the approach fails to guarantee upward mobility.
In conclusion, to most people, the American Dream represents an excellent opportunity to achieve their personal and career goals or dreams. However, the American dream has gradually drifted away across society as a dream rather than a reality.
References
Barnes, S. L., & Jaret, C. (2003). The “American Dream” in Poor Urban Neighborhoods: An Analysis of Home Ownership Attitudes and Behavior and Financial Saving Behavior. Sociological Focus, 36(3), 219–239. https://doi.org/10.1080/00380237.2003.10570725
Eisenbarth, A., & Chen, Z. F. (2022). The evolution of wage inequality within local US labor markets. Journal for Labour Market Research, 56(1). https://doi.org/10.1186/s12651-022-00307-6
Hoffmann, F., Lee, D., & Lemieux, T. (2020). Growing income inequality in the United States and other advanced economies on JSTOR. www.jstor.org, 34(4). https://www.jstor.org/stable/26940890
Langston, A., Scoggins, J., & Walsh, M. (2020, November 20). Race and the Work of the Future: Advancing workforce equity in the United States | National Fund for Workforce Solutions. National Fund for Workforce Solutions. https://nationalfund.org/our-resources/publications/race-and-the-work-of-the-future/?gad_source=1&gclid=CjwKCAiA_aGuBhACEiwAly57MRXmjmWSPZUccNTTjanyKCKAakMPiwK3nJifGGkVPy0J6rv5RjIRdRoCZLsQAvD_BwE
Opportunity Insights. (2021, December 14). National Trends | The American dream is fading. Only half of children today grow up to earn more than their parents. https://opportunityinsights.org/national_trends/#:~:text=We%20find%20that%20more%20than,earn%20more%20than%20their%20parents.
write