Influence of Capitalism on Poverty in America

Categories: PoliticsPoverty

I believe that poverty in the United States is caused by capitalism. Capitalism is an economic system in which the means of production is controlled by a few private wealthy elites for profit. This class of people are called the capitalists. It’s in the interest of the capitalist for there to be poverty because this helps them to maximize their profits. Now I believe the capitalists class causes poverty by:

  • Paying the working class slave wages;
  • Cutting middle class jobs to maximize profit;
  • Denying resources to the extremely impoverished and unemployed.

Capitalism creates poverty because it exploits workers and puts them in a situation of wage slavery. Wage slavery is when a worker is paid a wage so low that they don’t even make enough to live despite working full time. Most people who are poor aren’t poor because they refuse to work. They’re poor because their wages are so low that they can’t even afford to live off their salary.

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It has been determined that the living wage in the United States is $16.07 per hour in 2017 (Nadeau and Glasmeier, 2018). So if you’re making significantly less than $16.07 an hour than you are definitely impoverished. Most poor people work jobs that are paying minimum wage or close to minumum wage. Unfortuantely, the national minimum wage of $7.25 is way below a living wage. Data has shown you have to work 2.5 times the minimum wage in order to live (Hoffower, 2018). These low wages aren’t caused by employers being unable to pay living wages.

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The capitalist class is extremely greedy, and would prefer to keep most of their workers’ production to themslves, and as a result the working class is kept poor. Now worker’s productivity has gone up over the past few decades, but their wages have remained stagnant. Infact, “From 1973 to 2017, net productivity rose 77.0 percent, while the hourly pay of typical workers essentially stagnated—increasing only 12.4 percent over 44 years”. (Economic Policy Institute, 2018). All of the increased productivity has gone to the rich. Had the minimum wage been tied to the workers production it would be over $21 an hour and a lot less people would be poor (Fairchild, 2013). But, in part, because the governemnt has kept the mimumum wage extremely low, the capitalist class has been allowed to exploit the working class and keep them in a desperate situation of wage slavery.

Capitalism also creates poverty not only by enforcing wage slavery but by elimiating jobs that pay living wages and thus creating more unemployed and wage slaves. It’s no secret that in America the middle Class has been shrinking over the past few decades (pwesocialtrends, 2012). Gone are the days when people could get good high paying manufactiring jobs that would pay them a wage they could raise a family on. Again, the greedy capitalist class is driven to maximize profit. They don’t care about the livelihoods of their workers. So starting in the 60s when the capitalist who owned these factories found out they could cut their labor cost by laying off workers and using automation that’s exacty what they did (Gavett, 2016). Furthermore, the capitalist also started outsourcing factories to 3rd world countries where they could find cheaper labor forces. This aso lead to alot of American workers getting laid off. The forces of automation and globalization have all caused poverty because workers that once had good middle class jobs became unemployed and had to accept low pay wage slavery jobs.This again ties back to capitalism. Capitalism encourages big business to maximize profits at the expense of workers. As a result, higher paid middle class workers have lost their jobs and have gotten pushed into poverty.

Now there are also very extreme forms of poverty in the United States where people are homeless and don’t even have enough to eat every day. This isn’t due to a lack of resources. There is a surplus of food, in fact a lot food is thrown out every day instead of being given to the poor. Infact roughly 50% of the food produced is thrown away (Chandler, 2016). There are plenty of vacant homes in the U.S. despite all the homeless. Infact there are 18,600,000 vacant homes in America, while there are 600, 000 people who experience homelessness on any given night (Mintpressnewsdesk, 2015). So esentially, the number of vacant homes outnumber the homeless 6 to 1.

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Influence of Capitalism on Poverty in America. (2021, Sep 20). Retrieved from

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