The difference between the lifestyle of the rich versus that of the poor, the inequality that exists in this broad spectrum, all points to the concept of an income gap. A 2008 survey made by the US Department of Commerce revealed that 75.39% of the country earned less than $50,000 per annum, while only 6.24% enjoy over $100,000 of annual revenue. In trying to get a good grasp of what the income gap is and how it comes about in a society, we cannot think of it as a form of a social warfare or a battle of the classes. There are several factors that contribute to the widening of this gap, and the best part is that there are things we can do to reduce it.
The issue of the growing income gap has institutionalized itself in the world’s socio-political scene. It has caused thousands of rallies and protests across the globe for various reasons, mainly pointing out how the rich become richer and the poor are becoming poorer.
One of the many socio-economic factors that we can attribute the income gap to is the inequality of wages in the market today. In the 1970s, the ratio of earnings had been seen at 6:1 in favor of the top 10% of families. This means the richer family was earning 6 times more than poor families. This ratio grew steadily each year and has now reached 10:1 according to the US Census Bureau. This growing trend of income inequality has been the focal point of economists and researchers, as it provides a direct correlation to the widening of the income gap. Thinkers have theorized poor education as the main source of such a trend, as many workers have been stagnated in terms of education. Statistics show that regardless of the inflation rates, the lowest paid workers today are earning less than how they could be earning 25 years ago.
Another interesting angle to look at in understanding the income gap is how globalization and technology has affected the economy in several ways. We cannot but attribute the advancements the society now has to globalization and how it has helped the world become what it is today. Technologically, businesses have definitely benefited from automation systems and the computerization of its processes. These growth factors have also allowed the decrease in the demand for low-skilled workers while ramping up on highly-educated ones. This picture in itself has contributed directly to a typical scenario on income gap.
This calls for everyone’s attention and cooperation. Education plays a vital role in reducing if not eliminating the income gap. To embrace globalization and to keep abreast with the times, one must invest in an education that fits one’s profile, skills and goals. The government also has a lot to do to make things happen. The creation and implementation of a proper tax policy or other redistributive policies as well as opening up job opportunities for the populace are just some of the potential solutions to income gap reduction.
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