Obama in his speech regarding inequality initiated a national debate about the gap that has widened between the rich and poor of America and how such differences could be eradicated. Since 1979, the overall production of the U.S. escalated rapidly by more than 90 percent but on the other hand the income of a typical family only rose by 8 percent that is considered to be quite less. The President argued that the differences that had mushroomed between the rich and the poor was not because of the fact that the rich had worked hard but it was due to several factors including greater competition, slashed taxes on the rich, limited investment in public goods, a lagging minimum wage and weaker unions.
The reasons stated by the U.S. president also follow the same trend as in the income distribution worldwide therefore steps must be taken to abolish such differences globally and not in the U.S. alone as this is becoming an alarming issue in the whole world.
Compared to the incomes in the United States, there is positive news regarding the fact that the largest proportional increases have been enjoyed by those in the middle. Global income expert Branko Milanovic estimates (PDF) that worldwide, consumption for the median inhabitant increased about 80 percent over the 1998-2008 period, compared to around a 60 percent increase for the world’s highest-spending 1 percent.
In order to eradicate this globally alarming issue we need to first analyze where the gap between the rich and the poor started surging. No evidence has been found that countries with high income levels worked really hard or they saved a lot of money which made them superior to those countries with a low income level. The vast majority of the global rich got their outsized portion of increases in planetary consumption because they started off rich in 1990. Many of these were aided by a reduction in the tax rates. The biggest factor may well be that of globalization which created opportunities for the rich to make money by investing in developing countries. There is no harm in such intensive investments but the distribution of benefits is the major factor that has created divide among these 2 classes because these are not acts of God. It’s a decision of man— and it can be changed.