Policy Solutions Paper

(Institutional Affiliation)

Addressing Income Inequality

For decades now, the wealth gap among United States citizens has increasingly become high. This has contributed to various social and economic problems such as inadequate employment, poverty, crime, and health issues (Dabla-Norris et al., 2015). Because of the wide array of challenges attributed to Income Inequality there is need for the society to come up with some solutions to address this issue. Even though there are many ways through which the society can narrow down this wealth gap, the policies chosen need to follow a multifaceted approach in order to come up with a permanent solution. Below are some of the policy alternatives that can be used to address the issue.

According to Breen & Chung (2015), education is one of the major factors that accounts for income inequality among the people. The people who are well educated are more likely to earn better incomes than the people who are not educated. This is due to the fact that educated people have some skills which they can use to acquire full time employment with good salaries. Because of this reason education is arguably one of the best tools that can be used to eradicate income inequality in United States.

Lack of education among some citizen in the United States is closely attributed to poverty. Statistics show that more than 1 out of every 5 children are living in poverty (Childfund, 2013). This means that a similar number of children don’t get good education because their parents can afford. Even if they access education it will likely be the basic primary and secondary education and they will never have the opportunity to get post-secondary education. Since most of the good jobs currently demand at least one to have post-secondary education it is important that we invest in providing access to affordable and quality education and encourage young people to go school.

To provide affordable, and quality education the government should:

· Build enough schools in all parts of the country that can accommodate everyone who needs education.

· Ensure that the schools have enough resources needed to provide quality education. This include qualified teachers and learning materials

· Subsidize the cost of education to ensure that the citizens can afford

· Provide scholarships to low-income students to help them access higher education in-order to acquire the skills needed to secure jobs in the competitive market.

Issues facing education in United States

One of the greatest issue currently facing education in the us is the criticism of public schools. This has consequently led to decrease of funding of the schools. As these are the schools which most of the low-class people can afford, most of the students end up not getting quality education because the schools are not well funded and lack resources needed to provide good education. Other people assume that public schools have incompetent teachers. Due to this reason graduates from these schools face a hard time getting employment since most employers assume they are a product of poor training programs (Breen & Chung, 2015). Maintaining these perceptions will continue hurting the education and young generation who have potential to learn hence maintaining the income inequality.

Taxing the rich

The tax system is a very essential tool in wealth redistribution. A country which has a big percentage of its wealth belonging to the hands of only a few people is likely to face challenges in growing its economy. Over the years income taxes have been seen as another tool of curbing income inequality. Even though increasing taxes for higher income earners can affect the economic growth of a country it can significantly lead to declines in the income inequality. However, the increase in the top-bracket tax rate need to be accompanied with some sensible tax polies so that it does aggravate problems in the tax system (Kumhof et al., 2015).

How to ensure that the rich are fairly taxed

Even though most of the times rich people most of the times find legal and illegals ways to avoid paying taxes, a progressive tax system is likely to reduce the wealth gap between the rich and the poor. To ensure that families don’t remain wealthy for generations, a country should impose high estate taxes so that rich people don’t pass their wealth to their children. Another way to ensure that the inheritances are fairly taxed is make sure that rich people don’t own their assets until they die.

Increasing the minimum wage

But how can how can it reduce income inequality?

Currently, the gap between low-wage and the middle-wage workers wages is quite big. In this case if the minimum wage is raised it will make some progress in reducing the gap. If the current minimum wage is raised it can increase the pay of more than 1.6 million and many more who currently earn less than the minimum wage. Most of the low-income families end up attending low income schools because they cannot afford to pay the private ones. This puts students from such families at first risk because the low-income schools don’t have enough funding to provide the facilities needed to give quality education. Evidently, the minimum wage is an important matter that need to be addressed not only to appease income inequality but also to improve the people standards of living (Sabia & Burkhauser, 2010).

The people who oppose increase of the minimum wage argue that increasing it will place a burden to employers especially the ones with small companies which will in return lead to slower growth rates of their business due to low returns. They add to say that if the companies make small returns they are likely to retrench their employees leading to unemployment. On the other hand, the ones who advocate for its increase say that the current minimum wage doesn’t match the rate of inflation. Opinions from both sides have some economical implications but the later carries the day since studies have shown that increase in minimum wage have little impact on unemployment(Schmitt,2013).

References

Brainerd, J. (2018, February 1). STATE MINIMUM WAGES | 2018 MINIMUM WAGE BY STATE. Retrieved February 14, 2018, from http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

Breen, R., & Chung, I. (2015). Income Inequality and Education. Sociological Science, 2.