Thesis: It might have taken a near-historic recession and a nation-wide protest, but Americans are finally noticing the rapidly growing income gap between the rich and the poor. I. The gap between the rich and poor is widening. a. Wealth is heavily concentrated in the top 1 percent of the U.S. population.
The diagram above shows that real GDP has increased from Y1 to Y2 which means that economic growth has increased. As a result, unemployment falls as we are getting closer to the inelastic part of the AS curve, which is much needed as “unemployment has shot up” in this economic crisis. However, inflation has risen from P1 to P2 which means that our exports become less competitive so our trade deficit gets worse. However, the rise in inflation is needed as inflation is falling below the 2% target. The changes in the government’s macroeconomic objectives depends on where we are on the AS curve as shown below.
International Trade ECO 372 University of Phoenix There are many contributing factors to the stabilization and prosperity of our global market. We, the United States, are living in a time of severe trade deficit, meaning that we are importing many more goods than we are exporting. While it is nice to be able to buy foreign products at a lower price, there is risk in doing so. When we purchase foreign goods over domestic at lower prices it forces our domestic companies to sell their goods at lower prices to remain competitive. These lower prices may lend to making enough profit to sustain the current workforce.
Another influence is what they hold in a current account could be considered a deficit which means the country is spending more on foreign trade than it is receiving. This creates a supply of their own currency than a demand for its products. According to our text, Mankiw, (2007) 1. Consumers are wealthier, which stimulates the demand for consumption goods. 2.
Immigration reform will create an increase in the U.S. GDP and that means an increase in earnings for both native-born and newly legalized immigrants (HinojosaOjeda, 2010). b. IRCA immigrants were able to earn higher wages and in turn, native-born Americans’ wages also increased (Paral et al., 2009). c. In the State of California, they have the highest number of undocumented immigrants and those undocumented immigrant workers earned a lower wage than any other state. The state of California lost out on about $3.2 billion on potential income in 2009 (Pastor
Businesses often pay individuals a wage based on current market standards. Free-market economies usually dictate specific wages for various jobs. Governments attempting to subvert market prices can reduce the demand for new workers due to a high minimum wage. Individuals can face a few negative effects from minimum wage laws. Minimum wage increases an individual annual salary, bumping the employee into a higher marginal tax bracket.
Throughout the centuries, many technologies have been invented that have brought industries and manufactures to the world which creates jobs for everyone. As the world changes, more and more companies are producing a variety of goods and occupations to fulfill the needs for people. The economies of the different countries have grown rapidly especially in the developed countries; however, many developed countries, such as the United States of America, are migrating their companies to other developing countries in order to reduce the labor cost in the financial market. The outsourcing in other countries has giving many benefits to the U.S. economy in the short run as well as in the long run. Should America continue outsourcing because of the
Student Loan Debt Recently, the issue of student loans and the debt often accumulated through the utilization of those loans has come to the forefront. Student loans have become an indispensible means by which families are able to pay for higher education. The cost to attend institutions of higher education has soared over the last decade. In fact, the cost to attend college can amount to more than $50,000 per year at some private colleges and universities. Now that Americans owe more on student loans than on credit cards, the issue of spiraling student debt has moved increasingly higher on the political agenda.
“The most obvious example lies in the education system. Upward mobility is increasingly determined my education” (Meritocracy in America, 3). With the more education you receive there will be more chances a person will make more money at a job. “The education system is increasingly stratified by social class, and poor children have a double disadvantage. They attend school with fewer resources than those of their richer contemporaries” (Meritocracy in America, 3).
The biggest problem in today’s American society is income inequality. We live in a society where the rich are getting richer and poor are getting poorer. The people in the upper-class are making more money, while the middle-wage class is shrinking; becoming almost inexistent and lower-wage class group is just getting bigger over the years. Therefore, Americans must understand the importance of the upcoming election, and to vote for the Right Candidate to fix the income inequality problem. In My opinion, President Obama offers the best solutions for income inequality by bringing new ideas in his 2012 campaign election.