Economy

Over 47 Million People Live On Food Stamps... But the Problem of Inequality is Even Bigger Than That

October 27th 2014

By:
Adam Rotstein

Although a couple of years old, we just caught hold of this eye opening video that simplifies wealth distribution in the U.S.A.  It describes a survey that asked people what their ideal distribution of wealth would be, anticipating that this was would differ from the status quo. Just how much it would differ, however, is what this video goes on to elucidate. Representing the incomes of the top 1% with respect to those of the rest of the population results in data points that are literally "off the charts."

As the wealth gap continues to widen, so do the differences between key demographics of people. In the year 2000, households headed by someone with a bachelor's degree were worth 2.4 times as much as those with only a high school diploma. In 2011, that number went up to 3.4. Likewise, the net worth of white households has skyrocketed from 10.6 to 17.5 times to those of black households.

Is College Worth It? Learn more here. 

According to a report released by Standard & Poor's, widening inequality also stymies state tax revenue. Couple this with inflation and you're left with a serious budgeting problem and a shortage of money for crucial social services. 

Right now, 1 in 7 Americans are “food insecure” and approximately 47.4 million are surviving on food stamps, referred to as Supplemental Nutrition Assistance Program (SNAP).

To learn more about the plight of Americans on food stamps, click here.

The huge gap also undermines economic growth by slowing social mobility resulting in a less-educated workforce unable to compete in a global economy. The S&P report adds, "The current level of income inequality in the U.S. is dampening GDP growth, at a time when the world's biggest economy is struggling to recover from the Great Recession and the government is in need of funds to support an aging population."

What can we do, realistically, to combat this problem? S&P notes that helping Americans earn college degrees and raising the minimum wage are measures that could narrow the gap and expand the economy. We need to boost the purchasing power of the middle class and draw people out of poverty. The analysis added a salient metaphor, "A rising tide lifts all boats...but a lifeboat carrying a few surrounded by many treading water, risks capsizing."

Do You Think America Is Becoming A Caste System? Learn more here.