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.