Equitable Distribution of Wealth and Income

Hello, welcome to the second and final action project for my STEAM course Economy: Risking Value. In this unit, we read Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth. The book is about how traditional economics is broken and how its outdated theories allow for the super-wealthy to continue to become super-wealthy while they are people living in poverty. It also covers the dangerous policies that threaten our future. We were split into seven different groups (one group per chapter). My group was assigned to read chapter 7 which is Be Agnostic About Growth. The other chapters were: 1. Change the goal, 2. See the big picture, 3. Nurture Human Nature, 4. Get Savvy with Systems, 5. Design to distribute, and 6. Create to Regenerate. Our task for this action project was to create our own economic perspective as the 8th chapter Following the guiding question, How do you view the economic world, keep scrolling to view my project.

                                             GR. Equitable Distribution of Wealth and Income. (2020)

                                 

Economic Principle: Equitable Distribution of Wealth and Income

In Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, one of the underlying themes presented was ethics and how to create a sustainable economy that benefits everyone. This theme intrigued me the most, so I wanted to further expand this idea into chapter 8. Economic inequality is a prominent concern in economics and public policy. Government officials have an easier time implementing policies regarding economics if people are satisfied. The benefits of equitable distribution of income are that it would help accelerate growth and economic development. I chose the word 'equitable' and not 'equal' because it would refer to the distribution as 'fair', but 'fair' is subjective. Equitable distribution of wealth and income would allow all citizens to become successful and break the gap of income disparities. The solutions to these issues that my economic principle presents are a new economic system that would transfer payments in areas like unemployment benefits and disability benefits. This tax system would tax higher-income individuals and corporations at a larger percentage than lower-income groups. The other solution would be to implement policies that would improve the education system (primarily in lower-income neighborhoods), and make healthcare accessible to all. The last solution is to create more jobs and lower corruption by raising the federal minimum wage. Below is my visual.

Discussion

According to Kate Raworth, “Inequality features only as a peripheral concern in the world of equilibrium economics. Given that markets are efficient at rewarding people, goes the theory, then those with broadly similar talents, preferences, and initial endowments will end up equally rewarded: any remaining differences must be due to differences in effort, and that provides a spur for innovation and hard work. But in the disequilibrium world that we inhabit – where powerful reinforcing feedbacks are in play – virtuous cycles of wealth and vicious cycles of poverty can send otherwise similar people spiraling to opposite ends of the income-distribution spectrum. It’s due to what systems experts have come to call the ‘Success to the Successful’ trap, which kicks off when the winners in one round of a game reap rewards that raise their chances of winning again in the next.” (chapter 4: Get Savvy With Systems). This quotes best summarizes the current traditional economy on which America relies on. Capitalism only benefits the already ultra-rich 1% while the rest of the majority country suffers to get by. 

The economic gap in America has widened tremendously. According to equitablegrowth.org, "Wealth disparities have widened over time. In 1989, the bottom 90 percent of the U.S. population held 33 percent of all wealth. By 2016, the bottom 90 percent of the population held only 23 percent of the wealth. The wealth share of the top 1 percent increased from about 30 percent to about 40 percent over the same period."  It is evident that the rich are getting richer while the poor are getting poorer. People often believe that things need to get worse bad before they can get good; However, we can not afford for things to get worse in this instance. "Widening inequality also challenges the nation’s core ideal of equal opportunity, because it hampers upward mobility. High inequality correlates with low upward mobility." As stated by The Christian Science Monitor.  This system needs major reform. If the gap continues to widen, the majority of America will live in poverty and that will harm the economy. 

To conclude, I enjoyed this project! I included some policy elements to it, which made it more enjoyable for me. It made me reflect on the reality of this country and the economic inequalities that prevent a large population of the country to live financially secure. 

Works cited:

Gould, Elise. “Decades of Rising Economic Inequality in the U.S.: Testimony before the U.S. House of Representatives Ways and Means Committee.” Economic Policy Institute, Mar. 2017, www.epi.org/publication/decades-of-rising-economic-inequality-in-the-u-s-testimony-before-the-u-s-house-of-representatives-ways-and-means-committee/. 

Raworth, Kate. Doughnut Economics. Random House UK, 2018.

Reich, Robert. “What America Can Do to Stop Income Inequality.” The Christian Science Monitor, The Christian Science Monitor, 13 May 2014, www.csmonitor.com/Business/Robert-Reich/2014/0513/What-America-can-do-to-stop-income-inequality.