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Wages, Debt, and Race – The factors that contribute to the increasing wage gap

Wages, Debt, and Race – The factors that contribute to the increasing wage gap

By Jacob Sutherland

 

Turn on the news today, and you will likely hear talk of the top .1% having more wealth than the bottom 90%. While this idea seemed profound two years ago when Bernie Sanders began campaigning on this fact, in 2017 Trump’s America, a majority of us have found ourselves complacent to the statistic.

But this fact is not something that should be taken lightly. According to the Pew Research Center, between 1983 and 2013, the median household net worth income steadily increased from $318,100 to $639,400 in 2013 dollars. This includes the drop off during the late 2000s recession. However, during that same time period, middle-income families have remained stagnant, with a slow increase in net worth from $94,300 in 1983 to $96,500 in 2013. More shockingly, lower income households have faced a decrease in net worth, with a drop from $11,400 in 1983 to $9,300 in 2013.

Why has this occurred? Well, one contributing factor is the stagnation on the minimum wage. Since the minimum wage of $7.25 was enacted in 2009, buying the power of workers earning this has decreased by 9.6%. Likewise, the buying power of a minimum wage worker has decreased $8.96 in the late 1960s to the current $7.25 in 2016 when adjusted for inflation.

It is illogical to think that someone working 40+ hours a week should have to live in poverty. The argument that “the majority of people making minimum wage are teenagers who don’t need more money” is not even grounded in fact. According to the Bureau of Labor and Statistics, only about 45% of minimum wage workers are within the age group of 16-24.

Even so, this population of young Americans actually does need this money. Another contributing factor to the stagnation of household net worths is student debt. Within the past decade, nearly 70% of college graduates graduated with student debt, with the average amount of debt being $37,152, according to education reporter Farran Powell. Student debt is an epidemic on the national scale, so arguments for maintaining the minimum wage and for eliminating any chance of any federal aid for everyone in regards to tuition only serve to increase the gap between the upper class and the middle/lower classes.

A final, more shocking factor that plays a role in the stagnation of the average American household net worth is none other than racism. According to the Pew Research Institute, White people had 13 times more wealth than Black people and 10 times more wealth than Latino people in 2013. This is caused by numerous factors, including prejudices when hiring new employees and a greater push for white supremacy.

The gap between the top 1% and the bottom 99%, the top .1% and the bottom 90%, and even the top 20 families and the bottom 50% clearly holds no room for complacency. By remaining educated and fighting for economic equality in any ability we are able to, we can surely come together to create a greater prosperity for all.

 

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Categories: News, Opinion

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