by Joey Lorigan
One of the largest factors in a person’s life is how much income their family brings in per year. Income undeniably can open up more doors to lead people to greater success. The wealth gap is a topic that divides America into two and can put a wall between people and their success. The wealth gap is playing a big, “road block” because the wealthy are acquiring a majority of the money. According to the Federal Reserve’s Survey of Consumer finances, the top three percent now hold over double the wealth of America’s poorest ninety percent of families. A socioeconomic class ranking is something that someone attains through their income and their total assets. Whichever social class a person belongs to can also dictate a number of things that they deal with in their daily lives. Who someone hangs out with, how they spend their money and even a first impression someone gives off can directly be reflected on what socioeconomic class that particular person belongs to. The alarming thing is, how distant the upper class and middle class are from each other. The burning question is, How can a social class like the middle class and the upper class be so close in reputation, yet so far financially?
This brings us to the question, what exactly defines each socioeconomic class and where can that information be found? The answer is the social class hierarchy, or commonly known as, the social class pyramid.
As stated earlier, each American is associated with one socioeconomic class or in simpler term, social class. Income is the only factor that decides one’s socioeconomic class.The social class pyramid that is needed breaks social classes into three level, the lower-class, the middle-class, and the upper-class. The two classes where the wealth gap is the most alarming is the gap between the middle-class and the upper-class.
The middle-class makes up the largest percentage of the total social population. The group named the “middle-class” obviously falls in the middle, above the lower-class, but below the upper-class. They maintain their economic status by working for the various firms. There are two sides to the middle-class, the lower bound, and the upper bound. According to the Christian Science Monitor, forty-six percent of families fell in the middle-class category in 2013 making at least $42,000.
The upper-class belongs to the people who are wealthy and hold the greatest political power. The members of the upper-class are born wealthy and the wealth passes from generation to generation in the form of estates. A small percentage of the society belongs to the upper-class. The members of the upper-class have their own business ventures and they own various financial organizations. They employ the middle-class and lower-class people for a substantial wage. An upper-income family of four (about twenty-one percent of families) made about $132,000 according to Christian Science Monitor
A piece of the reason for the gap comes from how the upper class and lower class accumulate their wealth differently.
That issue that is still growing has a lot to do with the way the economy recovered over the past five years. The stock market to care of many losses that occurred during the “Great Recession” in 2008. The more wealthy Americans seem to have their earnings tied up in the stock exchange more often.
Middle-class Americans have more of their wealth tied up in their homes and personal thing as opposed to the investors. The housing market collapse really hurt a lot of middle-class families because the value of their house dropped. If one were to compare the stock market to the housing market, the housing market would be labeled weak.
Upper-income families have regained their footing financially while the middle-class lags. The middle-class has seen very little to no gain. The majority of Americans in 2013 did not feel the impact of the economic recovery.
While the wealth gap has widened since the Great Recession, many people tend to forget that it has been growing at an exponential rate for almost thirty years. Ever since the Federal Reserve started keeping track, the upper-class has nearly doubled its income while the middle class has only increased their money by about two percent.
Many do not believe there is an issue with the wealth gap between the upper-class and middle-class. Many have a belief that the wealth gap, also known as wealth inequality, is a healthy and necessary component of a growing economy. A component of society believes that without a wealth gap, the economy will wither anddie which would leave widespread poverty behind. Those who come from this school of thought do not see a problem in the wealth gap because they believe the “right” size wealth gap is needed to fuel creative ambition that is needed to lead people to want to pursue a better financial future.
There is a problem regarding the upper-class hoarding a majority of the wealth. This leaves the middle-class with little to work with and virtually leaves the lower-class in the dust. A plan must be found to help spread the wealth between all classes, especially between the upper-class and the middle-class. It does not seem right that two socioeconomic classes that are so close together can in reality be so far apart from each other. The income statistics are all that need to be seen in order to realize that there is a problem in the United States regarding the very large (and continually growing) wealth gap. The wealth gap between the upper class and middle class needs to be slimmed down immediately.