The assignment entails an explorative review of a topic of research related to one of the core themes in the course. The chosen topic is the wealth disparity in the upper, middle, and lower class. The topic relates to the theme of economic justice that aims to create equality in opportunities for material possession. The study targets academic peers within the course who can use the outcomes of the research to inform future recommendations on the issue of economic justice. The timing of the draft is related to the upward trend of income disparity, which is causing social conflicts. In academic institutions, income disparity is seen to affect social mobility where students are aligned to form groups based on their social and economic class. Therefore, the study entails a research rationale that highlights the need to address the wealth gap. It then presents credible sources that support the various claims made and finally highlights a short analysis of the matter in the context of material evidence presented.
Research Rationale
Since the Great Recession of 2007-09, the wealth gap existing between the rich and poor in America has been on a trajectory where the highest records have been realized in the current times. As such, the upper-income families have been on a trend of growth in their wealth whereas the middle- and lower-income families have experienced either low or insignificant wealth growth. The problem of the increasing gap between the rich and the poor has attracted global attention since it directly affects the economy of countries. It affects the development levels of country as well as the GDP since the wealth is confined to a few while the greater part of the population languishes in extreme poverty or survival. In view of this, the proposed topic of research is the wealth gap between the upper, middle, and lower class.
This topic relates to the theme of economic justice discussed in the readings. Economic justice refers to moral principles that relate to building economic institutions towards creating opportunities for individuals to create enough material possession that enables them to have dignified, creative, and prolific lives. The existence of the increased wealth gap between the rich and the poor is a barrier to achievement of economic justice. The research is beneficial as it puts to fold the dynamics that bring about the ever-increasing wealth gap between the rich and the poor. Consequently, the research informs the actions to undertake to reduce the wage gap and create economic justice, and by extension create a balanced development in various countries around the globe. Based on this, the research questions to cover are:
What are the statistical representations of the wealth disparity?
What factors contribute to increased wealth gap between the upper- and middle-lower class families?
What are the factors that make the 1% maintain and increase their wealth compared to others?
List of Source Citations with Annotations
Dabla-Norris, Ms Era, et al. Causes and consequences of income inequality: a global perspective. International Monetary Fund, 2015.
The article is a presents an in-depth analysis of the causes and outcomes of income inequality with regard to macroeconomics. The article first outlines the factors that people should be aware of regarding the consequences of wealth inequality and the why people should care. The factors are that inequality impedes social mobility, it shows a lack of income mobility, and has implications on macroeconomic stability and growth. The article brings another dynamic into the discussion by highlighting the consequences of inequality in the context of unequal outcomes and opportunities. The authors then discuss, with evidence, the factors driving the high income inequality, one of which is the squeezing of the middle class. The article has internal and external validity since the discussions can be applicable to any economy in the world. The credibility is shown in the use of statistical evidence to back up the claims.
DiMuzio, Tim, and ROAR Magazine. "The Life And Times Of The 1%." Truthout. N.p., 2016. Web. 25 Oct. 2018.
The article explicitly defines the 1%, explains their accumulation of wealth, and finally explains the extreme income disparity between the 1% and the rest of the people in the economic pyramid. The 1% are “high-net worth individuals” with a minimum of $1 million (USD) invested in assets that generate income, namely, real estates, government bonds and corporate shares. The 1% accumulates wealth by owning multiple income streams and having power (sometimes political). The huge disparity is contributed by the money system that issues loans to those who have amassed wealth as compared those who have not. They, in turn, invest in capital markets and make more wealth at the expense of others. The validity of the market is guaranteed since the evidence presented is applicable to all economies in the globe. The credibility of the article is also guaranteed given the use of evidence that can be confirmed given that the article focuses on economy and labor. The presentation also clearly puts a trail on the life of the 1% in earning their wealth and increasing wealth disparity.
Fry, Richard, and Rakesh Kochhar. "America's Wealth Gap Between Middle-Income And Upper-Income Families Is Widest On Record | Pew Research Center." Pew Research Center. N.p., 2014. Web. 25 Oct. 2018.
The article specifically focuses on the statistical evidence available on the wealth difference between the upper-income and middle-income families in the United States. The purpose aligns with our research question of highlighting the statistical representation of wealth gap. The article presents evidence on the changes that have occurred on the median net worth of upper-income families compared to middle-income families from 1983 to 2013. The statistics shows a gradual increase in the net worth of the upper-income families comparative to middle-income families with a high record from 2004 to 2013. It also shows the proportion of middle-income and upper-income families and the changes that have occurred over years. The article then outlines the statistics on the wealth gains recorded over the years. The statistical figures and charts make the article credible in backing the claims made. However, its external validity is not guaranteed since the data presented is only for the United States.
EXPLORATION STATEMENT
The gap between the upper, middle, and the lower class in the global economy has caught the global attention given the impact it has on the economies of countries globally. The increased disparity is an obstacle in the achievement of economic justice. As at 2013, the upper-income network was $639,400 while the net worth of middle-income families was $96,500. The value put the net worth of the upper-income at a median value 6.6 times more than the middle-income, which had increased 6.2 times in the previous year (Fry and Kochhar 1). In 2013, the upper-income families were 70 times wealthier than lower-income families, the highest record ever attained in the last 3 decades (Fry and Kochhar 1).
The increased wealth gap is brought about by numerous factors. The money system is one factor where upper-income families have access to capital compared to other classes in the economy (DiMuzio and ROAR Magazine 1). The upper-class utilizes the available capital to create more assets that further increases the gap. The gap is also caused by the multiple streams of income that the upper-class have access to. Income inequality from the disparity causes social conflicts arising from the imbalance, financial crises, and global economic imbalances (Dabla-Norris et al. 8). The impact of inequality is felt in healthcare services, financial services, and education sectors. The factors that drive the gap include global trends, technological changes, financial globalization, and changes in labor institutions, education, and redistributive policies (Dabla-Norris et al. 18-24). Further research is need on ways of reducing the wealth gap.
Works Cited
Dabla-Norris, Ms Era, et al. Causes and consequences of income inequality: a global perspective. International Monetary Fund, 2015.
DiMuzio, Tim, and ROAR Magazine. "The Life And Times Of The 1%." Truthout. N.p., 2016. Web. 25 Oct. 2018.
Fry, Richard, and Rakesh Kochhar. "America's Wealth Gap Between Middle-Income And Upper-Income Families Is Widest On Record | Pew Research Center." Pew Research Center. N.p., 2014. Web. 25 Oct. 2018.
