The Gap Between the Rich and the Poor in America Essay

The era of volatility has created a shift from America being the middle-class society to simply rich or poor (Sachs, 2011). A gap this large has not been experienced since the 1920’s (Sachs). â€Å"The top 1% of households takes almost a quarter of all household income† but an economy this top heavy will not be able to succeed (Sachs, 2011, p. 30). The working classes are struggling with housing, wage, and employment issues. Rich individuals are ignoring these troubles, shipping their business operations out of the country, thus furthering the downward spiral of the economy (Sachs). To make matters worse, this has become in a large part a political issue, because the rich can influence candidates with funding, where the poor and working†¦show more content†¦At that time though tax rates were 70% higher; presently the United States has the lowest tax rate of the leading economies (Sachs). The economy at that time was an effective mix of big business and activism in government, this combination worked to reduce the gap between rich and poor (Sachs). Then the 1970’s hit and things began to fall apart in the face of new challenges. It was in the 1970’s that globalization first hit with the introduction of Japanese cars to compete with the three major car dealers in America, inflation began to rise (Sachs). Rather than examining ways to become more competitive in the face of globalization, government looked inward and decided that is was the problem and not the solution to a problem (Sachs). The government failed to recognize the key role it played in correcting the economy before. Failure to recognize the Feds role in the economy and to adjust to globalization characterized the 80’s (Sachs, 2011). The long-term effects have been a â€Å"hollowing out† of American industries and the middle class have suffered the most, loosing employment as well as their homes (Sachs, p. 30). Manufacturing, textile, auto, and appare l jobs have all been lost to globalization, save for the highly skilled level positions (Sachs). For many years, construction filled the employment gap that manufacturing left in the American economy (Sachs). While it can be noted that Americans have benefited from low costShow MoreRelatedThe Context Of Growing Economic Interdependence1672 Words   |  7 Pages(globalisation); inequality is both growing within and between nations. In turn, analysing the following the following statement that â€Å"Inequality can undermine economic, social and perhaps even political stability. It can tear the very fabric that holds society together. We now have firm evidence that a severely skewed income distribution harms the pace and sustainability of growth over the longer term. 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