Shocking Facts About Economic Inequality In America

By Victoria Simpson on June 29 2020 in Economics

Image credit: Prazis Images/Shutterstock.com
Image credit: Prazis Images/Shutterstock.com
  • Women are still paid less than men, even though the Equal Pay Act was signed in 1963 prohibiting employers from paying women less for doing the same job as men.
  • School districts in areas with the most poverty in the US get the least funding, even though their students are often in need of the most extra support.
  • White people continue to earn thousands more than black people in the US.

You may have heard people come back at you with this statement numerous times: life isn’t fair. It may be true, but it is a bitter pill to swallow. When you are a seven-year-old whose favorite ice cream just plopped off the cone into the park fountain, you do not want fair, you want more ice cream. 

As it turns out, not everyone loses their ice cream and never gets it back. In fact, some people get multiple cones, double decker stacks, rum ripple two thousand times twelve, two extra freezers to store it all, and a maid to serve them any flavour they want at 2:30 am, should they still be awake at that hour and have a hankering for something sweet and cold. That is just the way life is: it is unfair. 

Why is life unfair? That is a large question to answer. A lot of the inequality present now in the US hinges on money, race, and access to opportunities. Here are ten facts to mull over with your morning coffee, when it comes to unfair differences alive and well in America. 

Economic Inequalities In America

African American people represent a majority of inmates in jail, but a minority of the general adult population

According to Pew Research Center, in 2017, African Americans represented just 12% of the adult population in the US, and Hispanics, 16%. In this same year, however, African Americans represented 33% of the sentenced prison population, and Hispanics 23%. In contrast, white people represented 64% of the overall adult population in the country, but just 30% of the prison population. 

Many immigrants have a college education, but more drop out of highschool

Immigrants to the US are almost just as likely as people born in the US to hold a bachelor’s degree or higher. In 2016, it was found that 30% of immigrants aged 25 and older had a college degree or higher, and 31.6% of those born in the US had earned the same. When looking at who finishes highschool however, 10% of immigrant youth in 2016 dropped out of highschool compared with just 6% of non-immigrant youth. There seems to be a problem inspiring these youth when it comes to education. 

The wealth gap between rich and poor has more than doubled in recent years

Yes, the wealthy keep getting wealthier, and the poor, poorer. From 1989 to 2016, the wealth gap between the rich and poor in the US has grown tremendously. In 1989 the richest 5% of families in the country had 114 times as much wealth as families that were one tier above the poorest in the country. In contrast, come 2016, the top 5% had gone on to hold 248 times as much wealth as this same group.  

Upper-tier incomes have grown faster than middle-class incomes in the past 50 years

An unidentified participant in the Occupy Minnesota protest on October 29, 2011 in Minneapolis. Occupy protests are a worldwide movement against corporate greed. Image credit: Miker/Shutterstock.com

There is a reason the average couple getting married today may have a hard time buying a home. They are just too darn expensive. From 1970 to 2018, the median middle-class income grew by 49% to reach $86,600. People in the upper-income tier however, enjoyed a 64% increase in their income in that time, however, reaching $207,400. 

White people continue to earn more than black people

Los Angeles, California, USA, January 19, 2015, 30th annual Martin Luther King Jr. Kingdom Day Parade, women hold sign "Black Lives Matter" Image credit: Joseph Sohm/Shutterstock.com

There has long been a gap between the median income of white people in the US and that of African Americans. In 2018, the median household income for whites was $84,600, but for blacks it was $51,600. Not only is there a persistence difference in what these two groups earn, but the gap has grown in recent years, as well. The difference between the two incomes has grown from a $23,800 difference in 1970 to a $33,000 difference in 2018. 

The US has the highest income inequality of all the G7 nations

 This seems like it would be something that is difficult to measure, and it likely is. The Organization for Economic Cooperation and Development compared income inequality across countries using something called the Gini coefficient, in 2017. In that year, all other G7 nations had a Gini coefficient ranging from 0.326 in France to 0.392 in the UK, while the US had one of 0.434. (Gini coefficients are a measure that ranges from 0, which indicates perfect equality, to 1, which represents complete inequality. 

Women complete more unpaid work than men

Image credit: Hyejin Kang/Shutterstock.com

Like many of the inequalities presented in this list, this one has persisted for time immemorial. It is getting better, and men are doing more household chores as women hold higher paying jobs outside the home, and responsibilities at home need to be divided up in order to get done. It is a fact, however, that women complete about four hours of unpaid work each day, and men do about 2.5 hours. 

School districts with higher rates of poverty get less funding

This is likely one of the drivers of inequality at all levels in the US. According to a report released by The Education Trust in 2018, the poorest school districts in the US receive less funding per student than those with the lowest rates of poverty in the country. In fact, the difference is so large that areas with the highest rates of poverty were actually found to receive $1000 less per student in state and local funding, compared with areas lowest in poverty. 

Women are paid less than men

Historically, women have earned less than men for the same work. In 1963, President Kennedy signed the Equal Pay Act which was an amendment to the Fair Labor Standards Act, which sought to address the differences between what women and men were paid for their work. This law mandates that employers cannot pay men and women different wages or benefits for doing jobs that require the same skills and have the same responsibilities. It took a long time for the law to be put in place. By the early 20th century, women made up about 25% of the workforce. They were not compensated equally for their labour, however. When World War II came along, women began taking men’s vacant jobs in factories, but in many cases were still paid less. By 1945, the US Congress introduced the Women’s Equal Pay Act, but the measure failed to pass. It was not until the 1950s and 60s that real wage equity progress was made.

The gender pay gap is growing smaller, but it persists. According to Payscale.com, in 2020 women in the US earned 81 cents for every dollar a man earned. 

Black Americans are more likely to be pulled over by police

A study done by Stanford University found that black drivers in America are 20% more likely to be pulled over, compared with their white counterparts. 

Researchers did extensive work to come up with these findings. Between 2001 and 2017, they analyzed  93 million traffic stops from 21 state patrol agencies and 29 municipal police departments. There were some hurdles for researchers to overcome in interpreting the data they obtained. States and municipalities do not have one standardized way of reporting traffic stops, and so some locations have extensive records, while others have little. Some places like Michigan recorded “unknown race” for 50% of the people they stopped, providing for data that was not useable by researchers. 

Overall, however, the study did reveal some general trends. 

Protester holding a 'Capitalism Thrives on Inequality' sign at the Black Lives Matter Los Angeles protest again District Attorney Jackie Lacey. Image credit: GrandAve/Shutterstock.com

The Fight For Justice

What is being done to address the inequalities that exist in the world? People continue to fight for justice. The death of George Floyd for example, an African American man who was killed when police in Minneapolis, Minnesota kneeled on his neck while he was being arrested for allegedly using a counterfeit $20 bill, has sparked thousands, if not millions of protestors to hit the streets in his name, asking for the end to police brutality, and for police departments to be defunded in the US. Through education, protest, and voicing your opinion with your dollar and by voting, change is possible.

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