An Introduction to the Issue of Unique Inequality in the United States

Categories: Inequality

Americans and foreigners alike have deemed the United States as a “global superpower” time and time again. The notion of “American exceptionalism”, the belief that America is qualitatively different in comparison to other nations, dates back to Alexis de Tocqueville who concluded in 1840 in his comparative work titled Democracy in America that “The position of the Americans is therefore quite exceptional, and it may be believed that no other democratic people will ever be placed in a similar one.” Although Tocqueville’s statement was in regards of his comparison of the United States to his home, France, his claim of “American exceptionalism” is further confirmed through even earlier words of an American, John Winthrop, when he exclaimed, “For we must consider that we shall be as a city upon a hill.

The eyes of all people are upon us.”?

Even today, this sense of American superiority, leadership, and exceptionalism remains alive and held dear to Americans and foreigners. However, it can be seen through Alberto Alesina and Edward Glaeser’s Fighting Poverty in the US and Europe, Timothy Smeeding’s Poor People in Rich Nations, and through Global Post’s comparison of Bridgeport, CT to Bangkok, Thailand that these descriptive measures of the United States no longer remain true.

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Economic and social inequality in the United States is nearly the highest among all other developed nations. An in-depth look into these comparative works help make apparent the troubling situation that the United States has fallen into.

In Alberto Alesina and Edward Glaeser’s Fighting Poverty in the US and Europe, it is made clear that fundamental structural problems of the United States government may explain much of the difference between income inequalities in the United States compared to that of their European counterparts.

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Firstly, Alesina and Glaeser say, “…the lack of a strong socialist party is the United States explains the small welfare state of the country.” It is known that the presence of a socialist party leads to more generous welfare benefits spending through a great emphasis on taxation, such as that of numerous exemplary Scandinavian countries’ pasts. Additionally, the United States lacks unions who are trusting in and supportive of the government, and need to understand in today’s day and age the government is an important ally to have in making labor market negotiations with public or private companies.

This would only be possible if the governmental system in the United States was more socialist-based. Europe’s socialistic countries also provide an example of how right-wing parties are prevented from cutting welfare spending through higher general support for welfare and due to the high cost of cutting back already implemented programs. Secondly, Alesina and Glaeser argue that “…the nature of the electoral system; in particular, proportional representation, is more likely to produce larger redistributive policies than a majoritarian system or a district system like in the United State.”

It is made clear that higher proportionality is correlated with higher degrees of government transfer and welfare spending. Additionally, proportional representation would allow for more parties to have a voice and cause greater fragmentation of legislatures, which ultimately makes it more difficult for the government to cut spending programs. Thirdly, Alesina and Glaeser argue that “…the degree of decentralization and the federal system of the government in the United States” is vastly larger when compared to European countries’ degree of centralization.

In shot, decentralization depresses the size of the government and consequentially, as a side effect, reduces the amount of public benefits. Tax competition between localities, with a decentralized government, leads to lower taxation rates compared to that of centralized governments, and therefore public spending will be kept to a minimum. This competition is also effected by the fact that wealthy American’s are able to mobilized to lower taxed properties in certain states, meaning that states tend to keep taxes low in order to remain more appealing. Less mobilization is seen in Europe, as the citizens have proven to be less attracted to economic incentives.

Lastly, Alesina and Glaeser claim that “…the separation of powers embodied in the American constitution prevented the introduction of radical welfare policies.” More often than not, one party has the presidency and the other has one or both branches of the legislature, which leads to a divided government. This translates into a “butting of heads” on many policy decisions, which result in a low number of implemented public programs. Additionally, the senate and other organizations are used as means to protect property rights, and the large amount of courts play a role that tends to reject many welfare programs.

The constitution clearly gives to much authority in the form of “checking and balancing” to governmental institutions, especially compared to such powers granted to similar organization in most European countries. Alesina and Glaeser go on to explain the rest of the story that has caused such a drastic difference in the inequality levels of the United States when compared to Europe. In summary, the national identity of Europe has been characterized with homogenous countries, making it harder for welfare programs to be opposed by opponents.

In contrast, the United States is largely diversified and a highly heterogeneous society, leading to often opposition of welfare programs based on racial and ethnic attacks. Either a new identity needs to be created for the United States or the citizens must come together as one people, regardless of their divided backgrounds, and realize that they all share the same home, America. In Timothy Smeeding’s Poor People in Rich Nations, a cross-national comparison is made between rich countries, namely the United States and the United Kingdom, to other less affluent nations, and the differences in inequality and poverty among them. Smeeding also does a comparison of antipoverty policies of the United States and 11 other relatively rich and developed nations.

In using the Luxembourg Income Study database, Smeeding concludes that the United States has poverty rates that are higher than almost all of the other countries in comparison. It is also clear that the rates of poverty for single parents and their children, along with elderly people, are the most severe. Smeeding contrasts these statistics with that of Europe by saying “The lowest poverty rates are more common in smaller, well-developed, and high spending welfare states like Sweden and Finland.” He also makes an important conclusion about lacking benefit programs in the United States, as poor single parents, who are working more hours compared to similar people of other nations, are also receiving less in transfer benefits. Additionally, a correlation is made between antipoverty efforts of the government and poverty rates, as low levels of spending on social transfers to middle-aged people is correlated with a high level of poverty rates.

With this data, Smeeding argues that the United States must increase their governmental efforts on balancing a capitalistic society, where incentives to improve the general working population are well and present, with an increase in benefits targeted to low wage and low-skilled workers who live in low-income families. I agree with Smeedings that in doing so would dramatically reduce the rate of poverty in the United States while persevering a competitive free-market economy, at least to a certain extent. Patrick Winn’s article Global Post article titled Glitz and Desperation in a Bangkok Divided by Income also does a good job in comparing the current economic inequity of the United States with that of another nation, Bangkok, Thailand. He finds that the wealthiest 20 percent of in the United States have more than half of the national income, and World Bank has reported that the same is true in Thailand. Similarly, the poorest 20 percent in the United States take in roughly 3 percent of the national income, and Thailand’s bottom 20 percent take in just 4 percent.

Finally, and even more troubling, Winn says that “The world’s premier measure of income disparity, the Gini coefficient, suggests that Thailand’s nationwide wealth disparity is equivalent to that of Bridgeport, Connecticut, or Washington, DC.” A matter of only a few miles separate the slums of Bangkok and the “ghetto” of Bridgeport, CT from Thailand’s high-society and one of the United States wealthiest suburbs, Greenwich, CT. Both in America and in Thailand, the conversation about inequity is prevalent and uprisings similar to Occupy Wall Street have also taken place in Bangkok. Fortunately, Winn makes a necessary and clear difference between such similar situations in the US and abroad by explaining how the type of poverty in Thailand is far more “raw” due to the high and low income brackets being much lower in Thailand, when compared to Connecticut. However, regardless of these varying levels of poverty in the United States when compared to places aboard, it is primarily important to realize that the poverty is still present, and that the wealth gaps and other residual inequalities still exist on a global basis.

In conclusion, it is clear that the United States has drifted far from the statements of foreign visitors and American citizens alike about the “exeptionalism”, and superiority, of the nation. The comparisons of the United States to other nations around the world, of which are presented in this essay, provide enough evidence about the inequality that truly exists in today’s America. The people and government of the United States will have to take some of what Alberto Alesina and Edward Glaeser claim to be the keys of a more stable nation, namely a more socialistic government which supports higher welfare spending, centralized governmental institutions, a different role of the courts, and a renovated Constitution.

The actual statistics that Timothy Smeeding presents should be kept in mind and his claim that a more balanced incentive to work ideology with increased benefits should be taken seriously and implemented as much as possible into our policies. And Patrick Winn’s article should remind us all that the United States is not alone on this battle against poverty, but that if we don’t take action and stay aware of how serious the problem is, you may find it in your backyard or even under your feet.

Works Cited

  1. Alesina, Alberto, and Edward L. Glaeser. “Chapter 4 and 6.” Fighting Poverty in the US and Europe: A World of Difference. Oxford: Oxford UP, 2004. 76+. Print.
  2. Smeeding, Timothy. “Poor People in Rich Nations: The United States in Comparative Perspective.” Journal of Economic Perspectives 20.1 (2006): 69-90. Print.
  3. Tocqueville, Alexis De, Phillips Bradley, and Francis Bowen. Democracy in America,. Trans. Henry Reeve. New York: A. A. Knopf, 1945. 518.
  4. Penn State. Web. Winn, Patrick. “Glitz and Desperation in a Bangkok Divided by Income.” Weblog post. Global Post. Global Post, 16 Jan. 1013. Web. 10 Nov. 2013. <Glitz and desperation in a Bangkok divided by income>.
  5. Winthrop, John. “A Model of Christian Charity — by Gov. John Winthrop, 1630.” A Model of Christian Charity — by Gov. John Winthrop, 1630. Http://religiousfreedom.lib.virginia.edu/sacred/charity.html, n.d. Web. 10 Nov. 2013.

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An Introduction to the Issue of Unique Inequality in the United States. (2021, Sep 21). Retrieved from https://studymoose.com/an-introduction-to-the-issue-of-unique-inequality-in-the-united-states-essay

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