The claim above is strengthened through the fact that the free market economy leads to the natural production of incentives and the wealthy open up more opportunities for jobs. For the defense of these claims and to shed light upon the other side of this debate, even the slightest attempt of maintaining an income equilibrium would be suddenly destroyed due to the uncertainties of the proclivities of citizens, yet the chaos is still confused with other aspects of the economy, such as the skyrocketing prices for homes and college tuition.
Firstly, in a free market economy, the 99% should actually be grateful to the top 1%. This is due to the fact that those entities that were once considered luxuries are now nothing but common appliances in our home. Such advancement would not have been possible if individuals who already obtained a large sum of money were to buy the first product, thus opening a stream of further production, therefore making it easier for the rest of the population to afford it. Additionally, if we were to suppose that an entrepreneur somehow creates a million-dollar business, he or she would be automatically creating multiple more jobs for the people, thus providing them with income.
We observe that we live in a free-market economy, which follows the natural production of incentives through a system of rewards based on hard work and risk along with investment. Subsequently, even if the government were to decide that all citizens were to be given an equal amount of annual income, what are the actual chances that their income will stay at an equilibrium? Those individuals living in a four-person or more family would be in need of a greater amount of appliances, hence increased expenditure, while those individuals who live by themselves would be in need of fewer entities along with the fact that they might live in small apartments, therefore, lead to those people accumulating a greater amount of wealth solely due to savings.
Despite such solid evidence, why is income inequality still confused? This is due to multiple economic changes that have occurred in a period of a few years that were too fast and impactful on multiple individuals, hence the sudden shock. For example, home prices are higher today than in the 1970s along with the fact that the cost for a college education has skyrocketed and the median price of a home in the US has climbed to a record-high of $266,000 in the second quarter. On the same note, that’s up from 6.4% from a year ago. In addition to this “compensation”, wages have increased by 67% since 1970, and along with it, college tuition. This is proven as since the years 1987–1988 we observed average college tuition for a private non-profit 4-year college as $15.2K, but now the latest data shows that for the years 2017–2018, the tuition costs an average of $34.7K. Furthermore, the cost difference for the same exact range of time for a public 4-year college is a $6.8K increase.
In denouement, we observe that it’s quite clear to conclude income inequality if we are even to consider it as a factual entity, can amount to merely as an aspect of society blurred and forcibly beaten down into the minds of the public as a supposedly “incriminating” ideal reinforced by the “powerful” in (quite ironic) an economy where the market itself is run by the same people. Perhaps we need to start rethinking our definition of “inequality” and try not to confuse it with “inequity”.
Geurin, Jessica. “Median Home Price Climbs to All-Time High.” HousingWire, 20 Dec. 2019, www.housingwire.com/articles/49576-median-home-price-climbs-to-all-time-high/.
“U.S. Median Home Prices Reach A New Peak In Q2 2019.” ATTOM Data Solutions, 24 Oct. 2019, www.attomdata.com/news/market-trends/q2-2019-u-s-home-sales-report/.
Hoffower, Hillary. “College Is More Expensive than It’s Ever Been, and the 5 Reasons Why Suggest It’s Only Going to Get Worse.” Business Insider, Business Insider, 26 June 2019, www.businessinsider.com/why-is-college-so-expensive-2018-4.
Link To Article: https://youth-journal.org/income-inequality-or-income-inequity