Forgot your password?

When Dreams are Not Reality: A Look at Wealth Inequality in America

By Edited Jul 10, 2014 7 12
Wealth Inequality in America
Credit: Stevens, Peter. Wealth Inequality in America. 2013. http://www.flickr.com/photos/28435100@N00/8530576430/in/photolist-dZPraY-aT5DEF-dZyTbD-gkUfL1-hKtGAW-bwpn1N-bKja22-83PBW4-e1kvbz-f2AKFi-bzyV1N-gCKigB-7C1DYn-ccaRm3-bDwpV6-aeGuBR-dKsmnn-gkUDbF-gkU7zR-dcu

When we think of a class system in America, we typically associate social standing with income, or more accurately, wealth. And, though almost everyone in America knows of this social stratification, most do not realize just how large of a gap there is between the very poor and the very wealthy. If fact, wealth in America is so unevenly distributed, that “the top 1 percent of households now hold a larger share of overall wealth than the bottom 90 percent does”[6], and that gap is only getting wider.

There are three distinct areas that predict wealth stratification: racial inequality, gender inequality, and inequality of opportunity. In this essay, I will examine each of these areas then discuss what steps may be taken to remedy the problems associated with wealth inequality. 

Racial Wealth Inequality

Though much advancement has been made to promote racial equality since slavery of the 1600’s, minorities have yet to gain equal access to opportunities and resources. In fact, much of the racial segregation and discrimination we still witness today has deep roots in American history, and has been the result of real efforts to keep minorities submissive to the white population. For example, discriminatory lending practices have pigeon-holed minorities into homes located in inner cities where there is little promise for appreciation value as compared to homes in predominantly white neighborhoods[11].

According to the essay “Closing Doors on Americans’ Housing Choices”, “[A]n African-American couple visiting a real estate agent is shown fewer homes in less affluent neighborhoods than a comparable white couple”[1]. Combine this with higher unemployment rates and low wages, and you’ve got a group of people at the mercy of the housing market and thus more vulnerable should it collapse. “Black families…were hit disproportionately by the housing collapse, because heading into the recession housing constituted a higher proportion of their wealth than for white families, leaving them more exposed when the market crashed,” according to Annie Lowrey[6].

Though opportunities to prosper are leveling out between ethnicities at this point, progress is slow. In fact, it is estimated that, if the current rate holds, wealth equality between different ethnic groups will not be reached for another 537 years[9]

Gendered Wealth Inequality

A woman’s place in the workforce is certainly nothing new. Women began taking jobs outside of the home in record numbers during World War II and have maintained their presence ever since.  But given multiple cases of gender discrimination in the workplace including sexual harassment, undervaluing female workers, and occupational segregation[5], women continue to find it difficult to earn a comparable salary to their male counterpart. For this reason, women are more than 50 percent more likely to live in poverty as opposed to men[14], a trend that worsens if she is a minority or born into a lower social status.

Additionally, women must face the challenge of child care in order to work outside of the home, which may end up costing more than half of their income[4]. And, because it is often the mother who is tasked with child-related emergencies – if a child is sick and must stay home, for example – it is she who will be at a disadvantage when it comes to applying for a job or getting a promotion. As journalist Frances McCall Rosenbluth explains it, “[Employers have a] disincentive to hire or promote women whose greater likelihood of interrupting their careers for childrearing and other family work make females a poorer long-term human-capital investment for a company”[12].

Given these trends, it is no wonder that so many single mothers are more likely to find themselves in poverty, or at least close to it. According to the piece “Women Losing Ground” by Ruth Conniff, “mothers were 79 percent less likely to be hired and 100 percent less likely to be promoted because they are held to a higher standard than men.” It is because of this “higher standard” that the work of women continues to be undervalued. “When gender is a major component of structured inequality, the devalued genders have less power, prestige, and economic rewards than the valued genders”[5]. Thus, women will continue to be under the foothold of men for many years to come.

Generational Wealth Inequality

Wealth inequality is not limited to race and gender discrimination. There is a clear line of wealth that is passed down from generation to generation with some –albeit minimum – room for movement between classes. This is because children who are born into wealth are given more opportunities and better access to jobs as a result of their economic status as opposed to those who are not.

Take, for example, Joe who was born into a wealthy family and was therefore offered the best schooling, the best connections, and considerably less stress than Tim, a child born into a middle-class family with few connections and limited resources. These children were each born into a different class which “…determines where they live, who their friends are, how well they are educated, what they do for a living, and what they come to expect from life”[8].

This inequality of opportunity perpetuates generational wealth inequality in that class rank directly affects one’s access to resources. It is also a result, however, of money and wealth being literally passed down throughout generations. For example, higher-class citizens are more likely to be able to help their children purchase a home or pay for schooling whereas those from a lower class standpoint cannot. In other words, “wealth begets wealth, and the lack of wealth perpetuates the same”[11].

Wealth inequality is rampant in our society. And, though most understand the division of wealth to be not only real but necessary (in that it drives a prosperous and motivated economy), the realities of such distribution are far from the perceived -- let alone the ideal -- of what most Americans believe to be true.

So what can we do to lessen the gap? While some efforts are being made – higher taxes for the wealthy or other forms of redistribution – those efforts are often met with hostility. For example, many people oppose higher taxes for the wealthy despite the fact that those tax increases would benefit them. This phenomenon is believed to be due to the average American’s vision of the American Dream: a life full of possibilities where all you have to do is try hard enough, be smart enough, or stand out from the crowd to get your piece of the pie. Hence, many believe that if they agree to tax those who have already achieved their dreams, then they are essentially taxing their own, or their children’s, American Dream. As Rosenbluth explains, “Poorer Americans’ belief in social mobility – despite strong evidence of its rarity – causes negative reactions to policies that would seem to benefit them”[12].


More and more Americans are finding themselves falling off of their own financial cliffs despite efforts to run as fast as they can away from that crumbling ledge. If not remedied, this disappearing middle class effect could likely lead to a great deal of upheaval and possibly a complete overhaul of our entire system. According to Edward Porter, “Once inequality becomes very acute, it breeds resentment and political instability, eroding the legitimacy of democratic institutions”[10]. How ironic that a system which we Americans believe so firmly to be the key to social mobility (capitalism) has actually been leading us straight into the mouth of the beast. 



Mar 28, 2014 2:00pm
Great Article. Have you submitted this to be featured?
Mar 28, 2014 2:58pm
Thank you, Jacob! You just made my day :-)

No, I haven't tried to feature this, or any of my other pieces for that matter. I'll look into it!
Apr 24, 2014 1:20am
Very good article amplifred and you did get it featured too. Well done.
Apr 24, 2014 8:16pm
Great article. Well done!
Apr 24, 2014 9:10pm
Thank you! I really appreciate the kind words.
Apr 26, 2014 3:51pm
Capitalism is not the problem -- the real problem here is the "Crony Capitalism' that has corrupted our political system and polluted our elected officials. The gap continues to widen between the rich and the poor with the middle sinking quickly to the bottom.
May 23, 2014 8:46am
Excellent article, Abby! I've shared this on my social media accounts. You really ought to see if it fits with any of the featured content categories. More people need to read information like this. Too many are blissfully ignorant, and are supporting policies that favour the 1% to their very real disadvantage.
May 23, 2014 8:46am
This comment has been deleted.
May 23, 2014 8:57am
Just realized you did get this one featured. Awesome! (And sorry for the duplicate comments.)
May 23, 2014 9:18am
Thank you so much for your support and kind words, Ruby! And, I agree that this is the type of thing more people should be aware of (and, thanks to the Occupy movement, people are starting to figure it out). Unfortunately, people seem more interested in articles comparing men to dogs than subjects such as this. Perhaps it is because the majority of people would rather read information that supports their beliefs? Contradictory messages can cause stress.

But, I recently read that some 90% of Americans believe big money needs to be removed from politics, so awareness is rising. The issue now is convincing the top 1% that the status quo is insufficient. That will be a bigger challenge, especially considering that "$1 equals 1 vote" in government. Those with the most money to throw at politicians will always have the loudest voice.
May 23, 2014 2:30pm
I never could understand why we let money control politics in countries that are supposed to have given up the feudal class system entirely.

We've had some limited success in Canada rewarding political parties for seats earned in a previous election. The funds given for the next political campaign allowed underdog parties to increase their visibility significantly, and I have reason to believe this contributed greatly to the fact that the NDP is currently the official opposition party.

But when you look at the more than 50% of the popular vote that was for anybody but the Conservatives in our last election, and the fact that our last election took them from a struggling minority government to a majority in Parliament, it's obvious a few extra dollars here and there aren't enough to level the playing field. Big money equates to many more opportunities to ge in the public eye. And even when a politician or party is not trusted, it seems many will vote for the familiar face.
Jul 9, 2014 2:17pm
Great read, amplifred.

Even as a lifelong conservative, growing economic inequality is at, or very near the top of things that worry me. I think more 'wealth tax' (as opposed to income tax) is advisable in the US--at the extreme upper end. Yes, I know, I just got kicked out of the conservative club for saying that, but the enormous influence of 'the few' worries me enough to say it anyway.

I'm not so much in favor of eliminating inequality, as in providing sensible limits on it. Man moves from discomfort towards comfort (Maslow?) and so I don't think inequality is inherently bad, anymore than water or oxygen. But degree matters--it's harder to argue about, and it's fuzzy, but it matters. I know that many will complain, "Who gets to define sensible"? But if it is not defined politically, the masses may someday determine it violently.

Aug 9, 2014 3:09am
As a former public accountant in charge of company division for implementing US Title VII and EEOC for minorities in business; and as a database engineer who designed the database and data acquisition for Fannie Mae and Freddie Mac mortgage foreclosures, I can tell you that you are incorrect. The REAL reason is following hints: Read Dr. Laurence J. Peter, “The Peter Principle” - that in an organizational hierarchy, every employee will rise or get promoted to his or her level of incompetence. The Peter Principle is based on the notion that employees will get promoted as long as they are competent, but at some point will fail to get promoted beyond a certain job because it has become too challenging for them. Employees rise to their level of incompetence and stay there. Over time, every position in the hierarchy will be filled by someone who is not competent enough to carry out his or her new duties. Then read The Bell Curve: Intelligence and Class Structure in American Life, Herrnstein and Murray, this will tell you why. These are just the tip of why there is a full grave yard of economic disasters. It is not the color of a person skin or their gender. It is their ability to produce. You sound like a Marxist, From Each According to Their Abilities, to Each According to Their Needs. Lot of people just don’t have the ability. I know, I have seen it. Now with affirmative action we have equal outcome, regardless of ability. That is reason for failure, not capitalism.
Add a new comment - No HTML
You must be logged in and verified to post a comment. Please log in or sign up to comment.


  1. Austin Turner, M., & Herbig, C. "Closing Doors on Americans' Housing Choices." Race, Class, and Gender in the United States (eighth ed.). 2005.
  2. Carbone, J., & Cahn, N. "Casualty of the One Percent." The New York Times. 1/04/2013 <Web >
  3. Conniff, R. "Women Losing Ground." Race, Class, and Gender in the United States (eighth ed.). N.D..
  4. Hsu, T. "Gender gap: Support working women, boost economy, says oecd." New York Times. 17/12/2012 <Web >
  5. Lorber, J. "Night to His Day." Race, Class, and Gender in the United States (eighth ed.). 1994.
  6. Lowrey, A. "Income Inequality May Take Toll on Growth." New York Times. 16/10/2012 <Web >
  7. Lowrey, A. "Wealth Gap Among Races Has Widened Since Recession." New York Times. 15/12/2012 <Web >
  8. Mantsios, G. "Class in America - 2009." Race, Class, and Gender in the United States (eighth ed.). 2006.
  9. Muhammad, D. "Race and Extreme Inequality." Race, Class, and Gender in the United States (eighth ed.). 2008.
  10. Porter, E. "Inequality Undermines Democracy." New York Times. 20/03/2012 <Web >
  11. Powell, M. "Wealth, Race and the Great Recession." Economix. 17/05/2013 <Web >
  12. Rosenbluth, F. "The Gender Complication." The New York Times. 23/03/2011 <Web >
  13. "The Wage Gap and Its Costs." Race, Class, and Gender in the United States (eighth ed.). N.D..
  14. Williams, C. "Poverty." Institute for Women's Policy Research. 12/03/2013 <Web >

Explore InfoBarrel

Auto Business & Money Entertainment Environment Health History Home & Garden InfoBarrel University Lifestyle Sports Technology Travel & Places
© Copyright 2008 - 2016 by Hinzie Media Inc. Terms of Service Privacy Policy XML Sitemap

Follow IB Lifestyle