"I ALWAYS THOUGHT MY WHOLE LIFE YOU WORK HARD AND YOU'LL DO OKAY. MAYBE YOU DON'T WORK HARD BY BUSTING YOUR BACK, BUT YOU JUST WORK HARD. THAT'S WHAT YOU DO. I DIDN'T REALIZE THAT SOME PEOPLE WEREN'T WORKING SO HARD AND THEY STILL HAD TONS OF MONEY."

People Like Us: Social Class In America, directed by Louis Alvarez and Andrew Kolker (New York: The Center for New American Media, 2001), DVD.

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I'VE LIVED IN AN APARTMENT PRETTY MUCH SINCE THE DAY I MOVED OUT OF MY PARENTS' TRAILER...

(0:38 min)

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I THINK OF

THE WORD UNDEREDUCATED,

NOT

UNEDUCATED...

(0:54 min)

I'M NOW A

MIDDLE CLASS

PROFESSIONAL AND I HAVE THIS FOUNDATION IN

A WORKING

CLASS ETHOS...

(:58 sec)

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  • THE BELL CURVE

    In a middle-class society, as the United States often defines itself, the bulk of income goes to middle-income groups, forming a bell-shaped distribution curve. A popular way of measuring income inequality, providing an indicator of disparities among households, is to rank households from high to low income, divide them into five groups consisting of 20 percent of the households each, and calculate each group's share of total income.

     Such an analysis, in fact, shows U.S. income distribution as highly skewed, with the top 20 percent of households receiving more than half of total income, and the bottom 20 percent receiving barely over 3 percent. The U.S. not only has the highest inequality among Western industrial countries; it keeps increasing.

  • RISING ECONOMIC INEQUALITY

    Mainstream explanations of rising economic inequality in the U.S. cite advancements in technology, especially in information technology; globalization; de-industrialization and financialization of the economy; de-unionization; immigration; race and gender discrimination; inheritance; and public policy. Marxists, on the other hand, argue that economic inequality inevitably results from unfettered market capitalism, where the social and economic organization of production leads to exploitation and hence to inequality.

     Technological innovations over the last two decades have increased demand for highly skilled labor.  At the same time, low-skilled jobs have dwindled as a result of outsourcing and offshoring, characteristics of economic globalization. As the United States shifted from an industrial to a post-industrial economy, demand for low-skilled workers dropped further, increasing the income gap between these two groups, and de-unionization has contributed further to labor's loss of economic and political power. Along with these macroeconomic structural changes, male-female and white-nonwhite pay inequality reflects continuing race and gender discrimination, which, along with more low-skilled immigrant workers in the labor force and larger shares of wealth passed by inheritance from one generation to the next, has also contributed to rising economic inequality.

    Unlike other Western industrial countries, the United States does not gear public policy to serve the interests of lower income groups. Since the 1980s, individual and corporate tax cuts and tax breaks, along with subsidies, supply-side, trickle-down policies, and reductions in social welfare programs, have systematically favored the wealthy, increasing inequality.

  • THE INCOME INEQUALITY DEBATE

    Rising income inequality has several potential political, social, and economic consequences. Concentration of income in the hands of an economic and political elite endangers democracy by concentrating decision-making power in the hands of those who may wish to perpetuate the status quo, ignoring the needs of the economically disadvantaged.

     High inequality also affects patterns of consumption and production. Since high income groups have overwhelming purchasing power, production may follow their taste patterns and focus on marketing luxury, high tech, capital-intensive goods requiring high-skilled labor.

     Not all see income inequality as undesirable. Some regard a high income as an appropriate reward for personal effort, better education, and risk-taking. At the macroeconomic level, the virtues of inequality are summarized in the debate between promoters of growth and defenders of equity. In mainstream economic theory, economic growth results from savings and investment and the incentives in place to increase them. Under this model, equality disrupts the virtuous savings-investment-growth cycle, acting as a stagnating force. In this view, rather than the creation of actual equity, what matters is preserving "equality of opportunity" as the pillar of the American Dream. Then whether one grabs these opportunities and strikes it rich becomes a matter of individual choice.  But since "equality of opportunity" doesn't involve ensuring equality of means, the American Dream has, for some, turned into an American Nightmare.

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