Poverty Imbalance The Gap In America's Distribution Thesis

Length: 6 pages Sources: 4 Subject: Economics Type: Thesis Paper: #16831564 Related Topics: Poverty, Wealth, Child Poverty, Bank Of America
Excerpt from Thesis :

Poverty Imbalance

The Gap in America's Distribution of Wealth and the Socioeconomic Consequences

The United States often characterizes itself in the context of political rhetoric and public displays of patriotrism as the wealthiest and greatest nation in the world. Unfortunately, the wide variance of living standards represented in this plurality suggests that this is an experience reserved only for those with the means. Quite to the point, the poverty that a substantial percentage of Americans live with everyday indicates that this apparent enormity of wealth is not accessible to all. Indeed, the discussion here centers on the understanding that 50% of all of America's vast wealth is possessed by no more than 1% of Americans. This means that the wealthiest individuals in America on their own control more wealth than entire communities and regions. And as the discussion hereafter will show, this is a trend with serious and negative consequences for the people of the United States and, increasingly under the terms of globalization, the people of the world.


That such a substantial amount of wealth is controlled by so few is responsible or the array of economic crises faced by Americans today, suggesting that a failure to distribute wealth effectively to broad swaths of the consuming public, to infrastructural maintenance, to small business development and to public administration and aid have all contributed to a collective decline in the American standard of living.


At the center of this discussion is the understanding that economic growth is wasted when not properly paired with effective ways of equal wealth distribution. Certain entrenched inequalities permeating domestic and global culture tend to reinforce the intolerable conditions facing the poor. Among them, the orientation of our nation and, increasingly, the global community, toward market capitalism has had the tendency of reinforcing some of its most problematic normative realities. Socioeconomic inequality and the persistence of poverty amongst demographics distinguished by features such as race, ethnicity and geography are a natural byproduct of this system. This accounts for the relative failure of 'economic growth' to address the issues of poverty. As the discussion here denotes, there is an absolute connection between these two conditions, but that this connection may not be defined as simply as it often is in the arena of policy development.

To the contrary, as the text by Rodrik (2000) remarks, understanding this correlation is muddled "to the extent that measures of income distribution vary, the changes do not seem to bear any systematic relationship to economic growth. In some countries (such as Taiwan, Bangladesh, and Egypt) growth has been accompanied with an improvement in Gini coefficients; in others (such as Chile, China, and Poland), Gini coefficients have gone the other way." (Rodrik, 1) This challenge is underscored by a detectably modest, if not inverse, relationship across the global community between the proliferation of private growth strategies and the continued and deepened plight of the poor. These help to transfer already meager wealth from the hands of the world's poor to the hands of the wealthiest few.

Today, certain measures suggest that economic growth does have the impact of reducing poverty but that studies also tend to indicate that this correlation is not as strong as it had been historically. Evidence abounds that economic growth as an initial strategy in developing contexts did have a detectable improvement on distribution of wealth. The globalization of free market capitalism appears as less sensitive to domestic realities though, taking a universal approach to market systems. According to the study by Stevans & Sessions (2005), "the effect of economic growth on changes in poverty has either diminished or remained unchanged over time, e.g., the 1980s economic expansion in the U.S. had no affect on poverty. Using a formal error-correction model, we find that increases in economic growth are significantly related to reductions in the poverty rate for all families. However, growth was found to have a more pronounced effect on poverty during the expansionary periods of the 1960s, 1970s, 1980s, and 1990s." (Stevans & Sessions, 1)

This may suggest that certain...


As further research tends to suggest, this is because this growth may be increasingly effected by policy orientation which disregards the public agencies designed to level said distribution.

To this end, Galbraith (1998) makes the argument that, as an insular crisis, poverty is primarily informed by the presence of a population's collective isolation from the opportunities abounding in other parts of the community. According to this categorization of the majority of our poor, the problem is almost entirely a demographic one. However, this logic falls short of a reality in which very specific social conditions omnipresent in a diversity of regional and structural settings can be shown to present a myriad of explanations for the persistence of suffering.

There is more rationality to the dismissed category of case poverty, in which the condition can be attributed to "some quality peculiar to the individual or family involved." (Galbraith, 236) Galbraith describes these as being any number of variable factors such mental deficiency, alcoholism, working class immobility or discrimination. In this explanation, it can be seen that poverty is a problem which, whether caused by internal or societal conditions, cannot be drawn to a single origin. Instead, the explanations for poverty are numerous and nuanced. This condition alone is sufficient to make the case that a single solution such as an emphasis on broader economic growth roundly misconstrues the complexity of the problem of poverty. We may be capable of recognizing a tangled web of causes for poverty that are unique for every individual or family. A common factor for all should be the potential to earn, though. And to the point, this is the area in which so many demographics are inherently disadvantaged regardless of the scale of economic growth precipitated by government policy and market behavior.

In the Glabraith text, this entrenched failure of capitalist systems to truly aspire toward collective wealth or equal opportunity is a defining force as we venture toward addressing poverty. Galbraith indicates that to the perspective of some theorists, poverty, "as general affliction, . . . was ended by increased output which, however imperfectly it may have been distributed, nevertheless accrued in substantial amount to those who worked for a living." (Galbraith, 235) This is a concept that the author will go on to refute though. In building his case for the endorsement of a collective investment focused on the public sector instead of into the further privatization of resources implied by 'economic growth', Galbraith makes the contention that it could not be considered a balanced measure to the epidemic problem to allow individuals afflicted by poverty greater access to financial opportunity. The author asserts that the absence of the public sector in the process of uprooting the foundational causes of poverty creates a circumstance in which the impoverished are unable to properly channel opportunities for advancement allegedly stimulated by economic growth. He contends that "poverty is not remedied because the specific individual adequacy precludes employment and participation in the general advance. Insular poverty is not directly alleviated because the advance does not remove the specific frustrations of environment to which the people of these areas are subject." (Galbraith, 238) In many ways, those 'specific frustrations' are rooted in a lack of resources and opportunities, both blocked by the persistence of America's wealth imbalance.

Counter-Thesis and Counter-Argument:

Those who would differ from the assertions made above might be inclined instead to argue that the current distribution of wealth is a product of 'supply-side economics' in which benefits to the wealthy will ultimately 'trickle down' to lower rungs of the socioeconomic ladder. Federal priorities over the course of the Bush Administration…

Sources Used in Documents:

Works Cited:

Cutter, W.B. IV; Federman, M.; Garner, T.I. Kiely, J. & Levine, D et al. (1996). What Does It

Mean to Be Poor in America? Monthly Labor Review, 119.

Galbraith, J.K. (1998). The Affluent Society. 40th Anniversary Edition. Mariner Books.

Rodrik, D. (2000). Growth and Poverty Reduction: What are the Real Questions? Finance & Development.

Cite this Document:

"Poverty Imbalance The Gap In America's Distribution" (2011, August 24) Retrieved June 25, 2021, from

"Poverty Imbalance The Gap In America's Distribution" 24 August 2011. Web.25 June. 2021. <

"Poverty Imbalance The Gap In America's Distribution", 24 August 2011, Accessed.25 June. 2021,

Related Documents
Child Welfare Rev America's Child
Words: 2430 Length: 5 Pages Topic: Children Paper #: 20681501

A consequence has been the increasingly common act by states and cities of slashing budgets which either eliminate child welfare agency resources or even the agencies themselves. Today, in the anticipated aftermath of the rash of scandals pockmarking the Bush Administration's oversight in this area, many agencies are simply fighting to stay alive. And today, in so many state venues, there is a justified fear of the budget axe.

Miguel Sahagun Mexico: Regional Leader
Words: 7688 Length: 20 Pages Topic: Economics Paper #: 67853101

Mexico's Trade Strategy Mexico has pursued a three-dimensional trade strategy perhaps more diligently than even the United States according to Schott (Studer & Wise, 2007). Mexico has been an active participant in multilateral talks since its GATT accession in 1986 and was the host country for the special Summit of the Americas in Monterrey and for the hemispheric trade talks in Puebla. Mexico is perhaps most famous as the instigator of

Economics and Inequality
Words: 2553 Length: 8 Pages Topic: Economics Paper #: 56088017

Economic Inequality There are certain specific factors associated with the rich. As along as one can afford decent shelter, sumptuous meals; better education and access better health care then such a person cannot be said to be poor. It is so natural for the rich to remain healthy and live longer than the poor. They lead an easy life, for instance, it is unheard of for a business executive to go

Educational Intervention on the Balance
Words: 9613 Length: 25 Pages Topic: Business - Miscellaneous Paper #: 34346457

Literature Review 1. The dilemma of Obesity Mokdad et al., (1999) in his study found that the issue of unhealthy weight, overweight and obesity are perhaps one of the rising concerns for the Americans in the 21st century as more and more U.S. citizens become vulnerable to the circumstantial risks and dangers of the phenomenon (Mokdad et al., 1999). It is usually the body mass indexes (BMI) that indicate whether a person

Water in the Middle East
Words: 22307 Length: 75 Pages Topic: History - Israel Paper #: 58217118

While on one hand, the Nile gets the highest discharge from rainfall on the highlands of Ethiopia and upland plateau of East Africa, located well outside the Middle East region; on the other hand, discharge points of the other two rivers, Euphrates and Tigris, are positioned well within the Middle East region, prevailing mostly in Turkey, Syria along with Iraq. In other areas, recurrent river systems are restricted to

Affirmative Action the Impact of
Words: 4251 Length: 15 Pages Topic: Race Paper #: 83831345

In addition to changes in admission policies at universities, new workshops in education are beginning to address this issue head on, with teaching participants being taught that American history and education are both "written from the perspective of whites and that laws and policies benefit whites while putting minorities at an immediate disadvantage." (Fernandez, 1) This has helped to redirect the perspective on Affirmative Action within the profession, where