Karissa Hand, Lauren Bizier, Mason Ramos, Brennah Theroux

A Letter from the Editors,Since the USA's founding as an agrarian economy in the

1700s, the country has shifted to an industrial economy and then to a service economy beginning in the 1950s. This shift and the increased rate of globalization have intensified the ever present economic inequalities in the country, specifically surrounding different races, genders, and statuses. Although there is not one perfect, fool proof solution for abolishing these inequalities, they can be significantly decreased through legislation helping the plight of the poor and focusing on decreasing the economic gap. The following pages will go into detail about the history of the US's economy, different ways in which the economy is unequal, and some proposed solutions with the hope that readers will gain a better understanding of why these inequalities exist and what can be done about them.

Sincerely,Karissa, Lauren, Brennah, and Mason

The United States' Start as an Agrarian Economy

As the United States started out , it grew into an Agrarian lifestyle in which the community depended on the cultivation of such products like Tobacco and Cotton. This dependence on agricultural accounted for most of the jobs in the early 1700s. Without machinery to cultivate crops men were forced to do the work single handedly of course during this time for the rich there were slaves to perform these duties but for the less fortunate farmers, they depended solely on their own work. The agrarian economy allowed for the growth of trade within the United States as well as Western European countries. Within the United States the South was able to trade with the North

because of the difference in crops within the colonies. The South traded with cotton, the North traded fish, and the Middle colonies traded tobacco. A major backing to an Agrarian Economy, Thomas Jefferson, pushed for the economy and believed an Agrarian Democracy would be best for the country whose majority was built mostly of farmers. He also believed in advances to the economy, he encouraged technological advances to push farming into the next level. His belief in the value of agriculture was reinforced by democracy as shown in a quote, "Those who labor in the earth are the chosen people of God."

America's Push Towards an Industrialized EconomyAmerica developed into an industrial power through the 1800s and well into the 1900s through the changes in the North in shipbuilding and the growth in manufacturing in all of America with the Civil War, WWI & II, and the Korean and Vietnam wars for war materials which were traded to other countries. Because of the Civil War the South and some Middle states were slower in the industrialization process. Great advances to industrialization came from the Oil, Railroad, Coal, Steel, and Electrical Industries mostly run by the bigwigs, John D. Rockefeller, Andrew Carnegie, and J.P. Morgan. With many growing industries there were many manufacturing jobs open to the United States citizens. However,

during this time immigrants from Europe began pouring in, increasing the workforce, the production and increasing the need for transportation by railroad. During this time of development a lot of the economic concerns were for the middle and upper class. However, during the Great Depression of the 20's, a lot of attention was payed to the lower class through the New Deal policies to help regrow the workforce and stimulate it through the creation of government work jobs. The Industrial Revolution started in the early 18th century in Britain, who tried to discontinue the spreading of the revolution to further countries. However, by early 20th century the US became the leading industrial nation.

Industrial Revolution

Americas change to a Service Economy

Since the 1950's Americas manufacturing bases have moved to other low wage countries to increase profit and production. In the 1980s there were 19.2 million manufacturing jobs in America, in 2010 there were barely 11.6 million manufacturing jobs still in America. American Companies have moved their bases to low wage costs to cut down on export costs to make a bigger profit. Some of these countries include Brazil, China, India and Africa. Within the last 30 years, American cotton exports have

decreased as other poor countries have started their own industrial revolutions to increase their own exports as America did back in the 19th century. Lately the manufacturing jobs have slowly increased as the service jobs like working at McDonalds or a local sandwich shop have increasingly risen. High wage business jobs have not declined of course as these jobs can not be outsourced as easily as manufacturing jobs.

Today's Service Economy

In this particular period of human history, we are undergoing a shift in economic and cultural structure known as globalization. In this system, the economies of the world are increasingly interconnected and dependent on one another. Globalization took hold at the end of the Cold War due to the lack of global division between capitalist and communist nations making it easier to do business, but it accelerated rapidly in the late 1990's with the mainstreaminization of the Internet. With the World Wide Web, information became easier to access and easier to relay to distant locations.

Being in a nation with a postindustrial economy, American businesses found it less expensive to move manufacturing jobs from the States to countries with a largely industrial economy, due to their lower wages. The Internet made it possible to send design information to these foreign factories and have them assembled there. Most of these nations were not industrialized until after the 2nd World War, and many are ex-communist states.

The Impact of Globalization on the Income Gap

This practiced has benefitted countries such as China and Cambodia by increasing the availability of jobs for their workers, but that same outsourcing has created a lack of low-skill, minimum-wage jobs in the United States. The elevated unemployment rate and, in turn, the income gap are in part due to the job movement of big corporations.

One thing that must be considered is the reasons why companies outsource jobs. It's generally done to save money on labor, but ends up having adverse effects on the American workforce.

However, wages in low-wage countries have been increasing as of late, leading us to consider the potential for jobs overseas to become less economically feasible. This could cause an influx of jobs into the US, due to the increased expenses of foreign labor. That would, in turn, cause the unemployment rate to decline.

Technology putting certain jobs out of commission is no new phenomenon. Since the advent of Eli Whitney's cotton gin, technology has been putting people out of work. This process of innovation leading to job loss is called technological unemployment. Usually, this process doesn't permanently erase employment, rather it changes the specific jobs that are available. This happened with the Industrial Revolution, and may be happening today. If so, the technological unemployment rooted in the Digital Age has not eliminated American factory jobs: it just moved them to different locations.

A similar movement occurred during the Industrial Revolution, when manufacturing jobs in the city began to replace the work in the countryside. The work being done changed, but the number of jobs didn't. A similar phenomenon may occur in the distant future, if the economic conditions permit it to.

Technology's Impact on the Job Market

Technological unemployment has had many faces over the years

Affirmative Action, Do We Still Need It?went on to the U.S. Supreme Court for review. The Supreme Court decided that it was constitutional for a state to use race as a factor in the admission process, but that it was unconstitutional to use a quota system.

In 2003, the Supreme Court ruled in the court case Grutter v. Bollinger that "racial diversity is an essential part of higher education's mission." This ruling made it so college admissions offices could use an applicant's ethnicity in their decision of whether or not to admit the student, but affirmed that it was unconstitutional for a quota system to be used. The Supreme Court made this decision with the intention of aiding less represented minority groups in their ventures into higher education.

Affirmative action is the encouragement of increased representation of women and minority group members, especially in employment. It was introduced by President Kennedy in 1961 as part of the battle for civil rights. Affirmative action was originally meant to be temporary, as a way to "level the playing field" for all Americans. Is the playing field leveled now? Do we still need affirmative action?

The case of Regents of the University of California v. Bakke was the first to question the constitutionality of affirmative action, and the policy of using race in the college admissions process. In 1978, Allan Bakke was denied acceptance twice to the University of California at Davis for medical school. The University had set aside 16 out of 100 seats in the incoming class for minorities. Bakke claimed that he had been rejected, while other students, who were less qualified than him, were accepted because they were of a minority. Bakke sued the University in the California Supreme Court, and the case later

There is currently an ongoing case in 2013 dealing with the use of race in the college admissions process.Abigail Fisher, a white applicant at the University of Texas sued the university in 2008 in the court case Fisher v. University of Texas. She sued the school for using race in admissions to increase the amount black and latino students attending. The University of Texas claims that their admissions policies are constitutional based on Grutter v. Bollinger. According to Fisher, the University is in violation of the 14th Amendment's Equal Protection Clause. To rule in Fisher's favor, the Supreme Court would have to overrule Grutter v. Bollinger, which would overturn affirmative action in public universities in the U.S.

Diversity on college campuses is the goal of screening for race, but is this fair to students as a whole? Racial

screening has made its way into the process of obtaining scholarships for college as well. College applicants who are of a minority are far more likely to obtain a scholarship because of how many are available to them. Students who are not a part of a minority are getting the short end of the stick in this situation. College applicants who are of a minority can apply for any scholarship that is restricted to their race or ethnicity and to any other one that is open to all applicants. Scholarship programs such as The Development Fund for Black Students in Science and Technology and the Actuarial Diversity Scholarship Program are available only to those of specific minorities. This is an advantage that a Hispanic or African American applicant would have over a caucasian applicant.There has been a lot of debate over the issue of affirmative action. Many see this as a form of discrimination against whites.

Typically, on college applications students are asked to select their race, in a form like the one below.

Why Aren't Men and Women Equal Yet?

Gender Bias is an unequal treatment in employment opportunity and expectations due to attitudes based on the sex of an employee or group of employees.Women have been making strides over the years, to bring themselves to stand on equal footing when compared to men, and to remove gender bias in education, and in the workplace. But men and women are still not getting the same opportunities. Females are now making 77 cents per every dollar that a male makes doing the same exact job. Per week, women earn 80.9% of what men earn. Haven't we moved past this?

Women also have a more difficult time moving into higher level positions than men do. Women make up 72 percent of Wal-Mart's total workforce, but only 33 percent of its managers. This is evident in the gap in income between men and women, seeing as men get most of the higher level, higher paying jobs.

Some companies are discriminatory in their hiring process, with males sometimes only hiring attractive females for positions that an equally qualified, not as attractive applicant could do, just because they want someone attractive to gawk at.During the hiring process, women are much more likely to be judged based on their appearance(clothes, attractiveness, age, etc) than men are. This form of discrimination, prevents women who are considered too old, or not attractive enough from getting hired. Because of this, women who are just as qualified as another applicant may not get hired, based on appearance. This is a problem that men don't have to worry about as much, having an effect on employment for women, and the wages they earn.

Does Your Race Have an Impact on Whether or Not You Are Hired?

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, or national origin.This is meant to make it fair for all job applicants and give them equal opportunity in their job search. Title VII does not completely prevent discrimination in the hiring process.

Marianne Bertrand of the University of Chicago Graduate School of Business did a study called "Are Emily and Brendan More Employable than Lakisha and Jamal?" This study was done to see if a job applicant with a name that sounds African American is less likely to get called in for job interview than an applicant with a white sounding name. During this experiment, the authors sent resumes for about 5,000 applicants, using typical white names and African American names. They isolated the elements of the resume to give them solid data about who was getting called back for interviews. It was found that

applicants with a white sounding name are 50 percent more likely to be called for an initial interview. The authors also claimed that "discrimination levels were consistent across all the occupations and industries covered in the experiment."

These acts of discrimination, conscious or not, show that America is still much more discriminatory than we would like to admit. This discrimination in the hiring process leaves more African Americans jobless than it whites.

How Big Is the Income Gap Really? In the past half-century, the income

gap between the rich and the poor has increased greatly, but not as much as it has widened between the rich and the middle class. In 1967, those in the lower class made a median $9,300, they are now making about $11,900, an increase of 28%. The middle class, increased 21% in their median earnings in that time, from $40,800 to $49,400. The upper class had an astronomical increase of 62% during that time, from making an median of 85,000 a year, to $138,900.

With the way the economy is going in the U.S., the rich are just going to keep getting richer, and the middle and lower classes are stuck without the ability to advance their economic status and annual income.

The rich get richer, even starting in college. A student in college would

benefit in taking an internship, because it could further their career. This is a luxury that a college student from a wealthy family could afford, but many middle and lower class college students need to work through college and during their summer breaks, making it difficult for them to balance both. This starts the trend of the rich having more opportunities than those of the lower and middle classes.

Wealth Inequality in America

"Inequalities are as old as human history and almost as old is the debate about

them. One thing that is new however is our ability to learn about them, to discuss them, and hopefully to find

solutions for them together as a global community that is better integrated and

more connected than ever before."-John Green, Crash Course

World History

The Link between Education and Economic InequalitiesQuality education is key for anyone to make a good living, but unequal

access to that education adds to the inequalities in the country.One of the most profound causes of economic inequality is the lack of access to quality education in poorer areas. Since public schools rely on taxes, areas that generally house people with high incomes will have better a better public school system because the people in their community are taxed more. This means that schools in areas where the people have low incomes will have fewer resources and less qualified teachers. The low income students who attend these schools are put at a great disadvantage because they do not receive a quality education that would enable them to get into good colleges and go on to get good jobs and move up the economic ladder. Unequal access to education is not in any way a new concept in the US. Following the ruling of Plessy v Ferguson in 1896 which provided for “separate but equal" facilities for blacks and whites, schools were increasingly segregated between races. Since the schools for black children were often in poorer areas, they received less funding and a lower quality education. When the ruling in Brown v Board of Education of Topeka ruled Plessy v Ferguson unconstitutional in 1954, schools were no longer segregated by races but discrepancies in the

quality of the education due to the location of the school continued.

What can be done to end the history of unequal access to education in the US? First of all, state governments have to take a more active role in decreasing the funding gap between low-poverty and high-poverty school districts. States like Massachusetts, which focus on giving more resources to high-poverty areas, tend to have some of the most successful public schools systems. If schools are given more funding, they will be able to afford more qualified teachers and better resources to improve the quality of the education they provide. If students have a more positive and effective early education, they will be more likely to attend college and find a good job, thus decreasing the huge gap between the rich and poor prevalent in today’s society. However, education can help lessen economic inequalities in other ways too. Schools should focus on educating their students about how to make good decisions for their future. Many students just apply to their state colleges, thinking

that they will be cheaper than a private college even though that is not always the case. Many private colleges offer need based aid, which is very generous to low income students. For example, the University of Pennsylvania, an ivy-league institution, meets 100% of its students’ financial need. It also had a “no-loan” policy, meaning all of the aid given to students will be in the form of grants or work study, which prevents students from going into debt. The chart to the right shows that a student can attend UPENN for the same amount as their state school, despite Penn’s tuition being more than twice the amount at the state school. Even better, Penn’s aid does not include loans. A student could get a much better education at a renowned, ivy-league college for the same price as their state university. Many students are not aware that the sticker price of a college is not always when the student will pay. Schools need to take it upon themselves to educate them on that aspect.

Finally, improved education in the form of job training would be extremely effective in decreasing the economic inequalities in the country. Nowadays, many jobs are sent to other countries where the same work can be done more efficiently and cheaply. If American workers receive better training for certain jobs, especially those dealing with technology, they will be more competitive within those fields, thus keeping more jobs inside the US. Of course there is not one perfect, fool-proof method at decreasing economic inequality within the US. However, a stronger emphasis on legislation to provide for equal access to quality education, better

knowledge on paying for college, and improved job training will go a long way on helping the poor improve their economic status.

Pros and Cons of Raising the Minimum WageWhile raising the minimum wage may seem like a clear solution to decreasing

economic inequalities, it is not a perfect solution and still requires some help from the government to be effective

The national minimum wage in the US is currently $7.25 per hour. President Obama announced in the State of the Union Address in February that he plans to raise the minimum wage to $9 per hour by 2015. There are two opposing sides to this argument. Increasing the minimum wage would help stimulate the economy by creating more disposable incomes, leading to more spending. It would also lessen the need for social services paid by taxpayers because those recipients of social services would be able to support themselves more. A higher minimum wage would help to decrease the economic inequalities by building up the poor and giving them a more substantial income.

Clearly $7.25 an hour would not result in an adequate paycheck for someone trying to support a family, but many opponents to

raising the minimum wage say that the majority of those working for minimum wage are students or young adults who do not need to support a family. The charts below reveal the opposite. The majority of those affected by the increase in the minimum wage are actually 20 years or older and are working a full time job. These people rely on these jobs to support themselves and often their families as well. They are not simply high school students trying to pay for a car. The charts also reveal that the family income those affected by the rise in minimum wage is mostly less than $40,000. The raise in minimum wage would directly affect the poorest families in the country and help to lessen the gap between them and the rich.

Unfortunately, there are some drawbacks to raising the minimum wage which make it an imperfect solution. In many cases, companies will increase prices to compensate for the rise in wages. This will in turn most likely affect those who were affected by the rise in the first place. For example, McDonald’s is a company that pays its workers minimum wage and also attracts customers who are low income. The rise in prices at McDonald’s will make people with a low income pay more for their food, which will take away from the raise they just received

While raising the minimum would definitely have its share of positive effects, what can be done about the negative? A less drastic increase in the minimum combined with an expansion

of earned income tax credits would go a long way toward helping the plight of the poor. Earned income tax credit is a payment by the government that supplements wages. Expanding this credit would not only help the poor but wouldn’t hurt business the same way that raising the minimum wage would. It would actually create jobs and better incomes.

Inadequacies in Government Services to the PoorWhile there is government assistance available to help the poor, it is often

inadequate and needs to be expanded if there is to be a significant decrease in poverty.

The Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, proves to be insufficient for providing healthy foods for its beneficiaries. In 2012, the average monthly benefit per household was just $278. For a family of four, this translates to about $2.32 a day per person. The amount of food possible to consume with this budget is less than enough to satisfy hunger, causing children to have difficulty focusing and learning in school. Families are forced to buy cheaper, less healthy food leading to health problems in the future.

The graphs below display the relationship between the poor, diabetes, obesity, and sedentariness. It is clear that those living in poverty are much more likely to have health problems related to poor eating habits as well as less active lifestyles. If the benefits from SNAP are expanded, families will be able to afford better quality food and improve their lifestyles. Some opponents say that SNAP is meant to just be a supplement, but many people of low income become reliant on them to get food due to rising costs of gas, housing, etc.

The health problems created by inadequate benefits for food hurt the poor even more considering many of them do not have quality health care. Many people get health care from their jobs, but often low paying jobs do not offer any or quality health care. This forces people to pay for it by themselves, which many can't and so they go without. This puts them in an even more difficult situation when they do get sick because hospital bills and medicine will not be covered by insurance. However, the recent passing of the Patient Protection and the Affordable Care Act otherwise known as ObamaCare goes a long way in helping the plight of the poor in terms of providing them with free or reduced cost health insurance supported by the government. It was first signed into law in 2010 when 49.9 million

Americans had no health insurance and resulted in a drop to 48.6 million in 2011. ObamaCare also prevents discrimination due to income, so those living in poverty cannot be denied proper health insurance. ObamaCare also has plans to expand Medicaid, the federal and state funded program which provides health care for low income Americans. The map below displays the projected decreases in the amount of uninsured Americans by 2022. ObamaCare has taken strong steps toward helping the plight of the poor while at the same time the top 3% of small businesses and big business are paying more to support it, thus decreasing the large gap between the two groups. With an expansion of government services to the poor such as food stamps and health care, the gap can be decreased even further.

The Issue of TaxesThe debate over whether to raise taxes and for whom to raise them is

everlasting in American society.

One of the most controversial of the proposed solutions to the rising economic inequalities in the United States is to increase taxes on the extremely wealthy. The government can then redistribute this additional revenue to help the poor. The argument for raising taxes is that the wealthy can afford it, while people of lower income would be hit harder by tax increases because they are able to save less. Throughout history there has been a correlation between raising taxes and a surge in the economy,

as seen in the Clinton administration and right after World War Two. Furthermore, there is a relationship between tax cuts and a growth in economic inequalities. Both in the 1920s and the Reagan administration, taxes were cut and the economy surged but at the expense of an increase in the economic gap. In other words, the wealthy benefited from the tax cuts, but the poor were hurt. Raising taxes on the wealthy would be beneficial to the American economy and especially the poor, while not being detrimental to the wealthy.

Opponents of raising taxes for the wealthy claim that it will lead to a “disincentivizing” of risk taking, investment, and work that would harm the economy because the tax raises would discourage economic growth. However, the tax decreases between the 1980s and 2009 produced little increase in job or business creation, so it is illogical to assume there would be a decrease if taxes were then raised.

Another step toward helping decrease economic inequalities is to make sure the wealthy are paying taxes fairly. Nowadays, many will avoid paying taxes by putting their money into investments which are taxed much lower than income. Former presidential candidate Mitt Romney is notorious for this. Regulations need to be put into play to ensure that everyone is paying the right amount of taxes and aren’t just finding loopholes so that the government can use some of that revenue for services to those who desperately need it. Furthermore, taxes needn’t be raised so high as to add an unbearable burden to the wealthy that would in fact hurt them and the economy. Taxes are not the sole answer to ending economic inequalities, but moderate raises for the wealthy could go a long way in helping.

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