Most revolutions are fueled by inequity and the masses reaching a boiling point.
What compounds this is the looming environmental crisis and how geopolitics plays into this.
It’s coming to us too.
“Essentially, the wealthy possess greater financial opportunities that allow their money to make more
money. Earnings from the stock market or mutual funds are reinvested to produce a larger return. Over time, the sum that is invested becomes progressively more substantial. Those who are not wealthy, however, do not have the resources to enhance their opportunities and improve their economic position. Rather, "after debt payments, poor families are constrained to spend the remaining income on items that will not produce wealth and will depreciate over time."
[60] Scholar David B. Grusky notes that "62 percent of households headed by single parents are without savings or other financial assets."
[61] Net indebtedness generally prevents the poor from having any opportunity to accumulate wealth and thereby better their conditions.
Economic inequality is a result of difference in income. Factors that contribute to this gap in wages are things such as level of education,
labor marketdemand and supply, gender differences, growth in technology, and personal abilities. The quality and level of education that a person has often corresponds to their skill level, which is justified by their income. Wages are also determined by the "market price of a skill" at that current time. Although
gender inequality is a separate social issue, it plays a role in economic inequality. According to the U.S. Census Report, in America the median full-time salary for women is 77 percent of that for men. Also contributing to the wealth inequality in the U.S., both unskilled and skilled workers are being replaced by machinery. The
Seven Pillars Institute for Global Finance and Ethics argues that because of this "technological advance", the income gap between workers and owners has widened.
[62]
Income inequality contributes to wealth inequality. For example, economist
Emmanuel Saez wrote in June 2016 that the top 1% of families captured 52% of the total real income (GDP) growth per family from 2009-2015. From 2009 to 2012, the top 1% captured 91% of the income gains.
[63]
Notably, for both the wealthy and not-wealthy, the process of accumulation or debt is cyclical. The rich use their money to earn larger returns and the poor have no savings with which to produce returns or eliminate debt. Unlike income, both facets are generational. Wealthy families pass down their assets allowing future generations to develop even more wealth. The poor, on the other hand, are less able to leave inheritances to their children leaving the latter with little or no wealth on which to build...This is another reason why wealth inequality is so important. Its accumulation has direct implications for economic inequality among the children of today's families.
[60]
Corresponding to financial resources, the wealthy strategically organize their money so that it will produce profit. Affluent people are more likely to allocate their money to financial assets such as stocks, bonds, and other investments which hold the possibility of capital appreciation. Those who are not wealthy are more likely to have their money in savings accounts and home ownership.
[64] This difference comprises the largest reason for the continuation of wealth inequality in America: the rich are accumulating more assets while the middle and working classes are just getting by. As of 2007, the richest 1% held about 38% of all privately held wealth in the United States.
[21] while the bottom 90% held 73.2% of all debt.
[60] According to
The New York Times, the richest 1 percent in the United States now own more wealth than the bottom 90 percent.
[8]
However, other studies argue that higher average savings rate will contribute to the reduction of the share of wealth owned by the rich. The reason is that the rich in wealth are not necessarily the individuals with the highest income. Therefore, the relative wealth share of poorer quintiles of the population would increase if the savings rate of income is very large, although the absolute difference from the wealthiest will increase.
[65][66][67]
As the price of commodities increases because of inflation, a larger percentage of lower-class people's money is spent on things they need to survive and go to work, such as food and gasoline. Most of the working poor are paid fixed hourly wages that do not keep up with rises in prices, so every year an increasing percentage of their income is consumed until they have to go into debt just to survive.[
citation needed] At this point, their little wealth is owed to lenders and banking institutions.
The nature of tax policies in America has been suggested by economists and politicians such as
Emmanuel Saez,
Thomas Piketty, and
Barack Obama to perpetuate economic inequality in America by steering large sums of wealth into the hands of the wealthiest Americans. The mechanism for this is that when the wealthy avoid paying taxes, wealth concentrates to their coffers and the poor go into debt.
[68]
The economist
Joseph Stiglitz argues that "Strong unions have helped to reduce inequality, whereas weaker unions have made it easier for CEOs, sometimes working with market forces that they have helped shape, to increase it." The long fall in
unionization in the U.S. since WWII has seen a corresponding rise in the inequality of wealth and income.
[69]”