Income Disparity

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The growing income disparity, or gap between rich and poor, is caused by a number of factors, including:

Increased Minimum Wage/Benefits

Increasing the national minimum wage or benefits (e.g. Obamacare) forces U.S. companies to cope with the higher cost of hiring U.S. workers in a variety of ways. Because payroll is typically a company's major expense, the simplest way to increase company profitability and shareholder/investor returns is to pay workers less. This is additionally necessitated by minimum wage hikes and increases in employee benefit costs such as healthcare.


If U.S. workers become too expensive, it becomes an increasingly attractive option for big businesses seeking to remain competitive in a global market to send jobs overseas where work is cheaper, which is why China, which has no national minimum wage, has overpowered the U.S. in terms of trade. Chinese manufacturing workers are paid 1/10th that of their U.S. counterparts, and the U.S. has over a $300 billion trade deficit with China every year. In a global free trade environment, jobs go where labor is cheapest, barring governmental actions to protect domestic labor like tariffs and trade embargoes (thus why they are explicitly authorized under Article 1, Sec. 8), thus resulting in a global income disparity where workers are paid ever less and CEOs reap ever higher salaries. Unless trade is restricted with unscrupulous low minimum wage countries like China, a growing global income disparity and the destruction of westernized, high minimum-wage democracies such as the United States is unavoidable.


There is a perpetual cycle of workers being replaced with machines as technology improves over time. As a result, the world is constantly producing ever more manufacturing input while decreasing the number of manufacturing workers employed--this is in part why the U.S. is increasingly becoming a service-sector economy. As the key manufacturing jobs disappear, either because they are outsourced to countries like China, or because they are replaced with machines, the only jobs remaining are those which can't be outsourced or automated. For example, jobs such as plumbers and doctors currently require a physical person present to perform the service... although at some point, telemedicine may allow foreign doctors to provide a degree of treatment from long-distance, and some healthcare tasks can now be performed via robots and advanced technology that were once performed by human doctors.

Barring legislative intervention, for example requiring that companies which hire more U.S. workers in relation to company earnings get more tax breaks, automation's effects will continue to destroy jobs and result in less and less money going to the poor, and more going to the rich.

Illegal Immigrants

Many unscrupulous employers exploit the United States' weak borders and suspect immigration policies by hiring illegal immigrants. While there has been considerable attention focused on deportation of those immigrants, there has been strikingly little concern for holding employers accountable.

Converting Full-Time Jobs to Part-Time/Temporary

Interestingly, not only private-sector employers, but many state and local governmental agencies have been increasingly going to part-time and temporary employment as a way to avoid the increased overtime and benefits (such as healthcare) mandated by new legislation such as the Affordable Care Act (aka Obamacare). Temporary employees are paid very little, with temp agencies taking their cut even as companies increase their profits.