Sociology, one of the biggest areas that are receiving continuous amounts of focus is the inequalities that exist. Recently, disparities in income levels have become much larger. This is because the top 1% (who controls the majority of the wealth) is earning more at the expense of the other 99%. These are individuals that have to work every day (often controlling little to no amounts of personal assets). Throughout history, this conflict has often been the focus of different labor disputes and social revolutions. (Winship)
However, globalization is having a dramatic impact with these divisions becoming even larger. In the article that was written by Winiship (2012), he is talking about how these disparities are evolving. Evidence of this can be seen with statistics that were uncovered from the Congressional Budget Office. They found that the income levels of the ultra-wealthy increased from 8% in 1979 to 18% in 2007. While the bottom four categories of income, saw a decrease by similar amounts. These figures are illustrating how there are social divisions that are becoming severe. To fully understand what is happening requires comparing the ideas presented in the article with sociological concepts. This will be accomplished by focusing on: the existence of the problem, what sustains it, the non-sociological explanations, how this is connected to other problems in the world and possible solutions. Together, these elements will provide insights as to the long-term impact of these issues on society and what steps must be taken to rectify the situation. (Winship)
What explains the existence of this problem?
On the surface, the problem with income equality is a situation that has been continually dealt with throughout history. This has an impact on socialist and Marxist philosophies with both focused on addressing these challenges (through introducing new economic philosophies). However, in the last several decades, these disparities have become more severe. This is because the downfall of the Soviet Union and the focus on globalization has given employers greater amounts of flexibility. Over the course of time, this has resulted in more jobs going overseas (with many employees forced to work longer hours for less money). (Mandel)
To make matters worse any kind of assistance that is being received from international institutions (i.e. The World Bank and the IMF) requires that nations are embracing structural changes to their economy. At the heart of this approach, is for a country to reduce trade barriers and liberalize its markets. This has made the situation dire in many regions, with corporations locating to an area to increase their profit margins. The problem is they are not contributing a lot of support to local economies. Moreover, there are large layoffs in regions that have higher labor costs. This creates a situation where workers are exploited in both developed and developing countries (as they are receiving less income). This savings is used to help increase the earnings per share of the company and the wealth of the shareholders. ("The ABCs of the Global Economy")
These areas are showing how the income disparities have become worse. This is because the executives of corporations have the ability to increase their profit margins exponentially. Over the course of time, this will make anyone who owns the common stock wealthier. Most of these individuals include: astute / ordinary investors, employees of the company, directors and family members. Any kind of increase in the price of the common stock (through lowering labor costs) will translate into large increases in personal net worth. This is when these individuals will have more income available to make other purchases in the future. ("The ABCs of the Global Economy")
At the same time, communities will see lower standards of living and decreasing employment opportunities. This will cause these individuals to realize declining income levels and personal net worth. As a result, the existence of this problem is a historical trend that has been made worse by globalization and international institutions. ("The ABCs of the Global Economy")
What sustains it?
The basic philosophy that sustains the current system is consumerism. This is when corporations are focused on providing the public with the products and services they demand. However, to entice them to make even more purchases, there is often an emphasis on providing everyone some kind of added value. This will encourage them to spend more in the economy (which will help to increase the profit margins of corporations). (Schor)
At the heart of this philosophy, is a focus on living the good life. This has caused many people to spend beyond their income levels in order to obtain this social status. From a Marxist point-of-view, this is a classic illustration of how the economic system is buying off the middle class over the short-term. However, during longer periods of time is when there is a transformation in the way everyone is interacting with each other. In this case, many corporations are using globalization as a tool to increase their profit margins exponentially. The tradeoffs are a decrease in the standard of living for many areas and the depletion of natural resources in different regions of the world. (Schor)
These kinds of issues have created situations where corporations are engaging in immoral tactics in order to increase their bottom line results. A good example of this can be seen by looking no further than the civil war in the Democratic Republic of the Congo. What was happening is Sony was facing tremendous demand for the Play Station from consumers in 1999. The problem was the shortages in coltan. This is a raw material that is used the production of cell phones, computers, game consoles and other electronic devices. One area that has large reserves of this substance is West Africa (i.e. The Congo). (Silverman)
Sony decided to directly buy this compound from intermediaries (who were forcing prisoners and children to wok the mines in these regions at gunpoint). This helped to provide war lords with the weapons and financing they need to commit a host of atrocities (including: genocide and mass rapes). After these practices were revealed, is when Sony changed their suppliers. They now have a policy that prohibits these kinds of activities. However, any violations will more than likely be overlooked, when the firm is facing challenges that can impact their profit margins. (Silverman)
This is illustrating how the consumer orientated culture has led to situations that are fueling civil wars and atrocities that are committed against humanity. These problems are compounded by the demand for natural resources to satisfy the needs of consumers. As a result, the capitalist system has failed to regulate itself and address these issues. Instead, most firms are focused on increasing their overall bottom line results at all costs. Globalization has made the problem much worse by allowing large corporations to locate to regions that have little to no regulation. This is when they can begin to maximize their profits and address the demands of customers. The situation in the Democratic Republic of the Congo is just one of many examples that are illustrating this lack of morals. (Silverman)
What are some "non-sociological" or "individual" explanations given for why this problem exists and what should be done about it?
From an individual perspective, the differences in economic equality can be seen on a daily basis. In many cases, this is resulting in the majority of people not receiving the same kind of services or treatment. As everyone is forced to work longer and they are receiving lower forms of compensation. One such area where this can be seen is inside the field of health care, as the affluent have access to the best doctors and treatment options. While many individuals who are middle class will be forced to struggle with rising insurance premiums and declining amounts of coverage. This can have an adverse impact on kinds of services and treatment options that are provided. (Davis 242 -- 249) (Scott) (Baurerline)
To deal with these challenges, many Marxists and socialists will argue that some form of wealth redistribution must take place. This will prevent the affluent from taking advantage of different loopholes in the system by utilizing their resources. Instead, these areas are eliminated in order to ensure that the needs of the people have been met. This idea is a good starting point for dealing with some of these challenges. However, sudden changes have resulted in negative impacts on the economy. (Davis 242 -- 249)
To prevent this, the government can begin implementing their own programs and regulations that will limit these activities. This will address these disparities by preventing the wealthy from continuing to exploit different loop holes. Instead, the new laws will force corporations to take into account the interests of the public. From an individual perspective, this will ensure that everyone is treated fairly by forcing corporations not to take advantage of consumers. (Davis 242 -- 249)
How is this problem connected to other problems in the world?