Alyssa Ahlgren: No, We Don’t Have an Income Inequality Problem

The wealth gap is the bedrock of the Democratic Party platform going into 2020 and the answer is limiting monetary success through increased centralization of federal power.

Wealth Gap

A main driver of left-wing thought, as evident in the policy recommendations by front running Democratic candidates like Bernie Sanders, is income inequality. Income inequality is measured by a gap in wealth; the difference between the wealthiest Americans and the poorest. To the left, not only is this inequity falsely seen as a benchmark for negative economic and fiscal health of a nation’s populace, it’s seen as a moral evil. The wealth gap is the bedrock of the Democratic Party platform going into 2020 and the answer is limiting monetary success through increased centralization of federal power.

Inequality is no longer an objective term. To the left, disparity is the result of discrimination. To the right, disparity is the inevitable result of equal opportunity and meritocracy. Regardless of where you fall on the description, income inequality is not an indicator of a population’s fiscal well-being. Countries with much lower income inequality than the United States are some of the poorest countries in the world. Burundi, Slovenia, Uruguay, Tunisia, and Morocco are some of the many countries that have less income inequality than the United States, yet have a GNI per capita that doesn’t come close to that of the U.S.

Many advocates of socialist redistribution make the argument that wealth inequality is the real problem, not income inequality. Wealth inequality refers to not only income but standard of living as a whole (such as the total assets that make up net worth). The disparity in wealth includes the number of households that hold the most wealth ownership versus those who hold the least.

Let’s go back to the list of countries that have less income inequality than the United States. Those countries also have lesswealth inequality, or in other words, more evenly distributed wealth. According to the left’s logic, because Burundi, Slovenia, Uruguay, Tunisia, and Morocco have higher levels of equality of income and wealth than the United States, they should be better off. However, they are not. Not even close. Why? Because income and wealth inequality are meaningless. I understand this can come off as a harsh statement; many take offense to recognizing a disparity as a neutral fact rather than an injustice. But, looking for solutions to solve for a disparity that does not need to be rectified will only develop actual injustices.

If I average a daily income of $50 and the wealthiest averages $100 a day, there is income inequality. If the average daily income for the wealthy increases to $400 and mine increases to$150, income inequality has increased because the gap has widened. Am I worse off in the second scenario? Of course not. The wealthy got wealthier and so did I. This is a simple example of what is not only happening in the United States, but globally. The rich are getting richer, and the poor are getting richer.

The speed at which people are alleviated from poverty has hit historic rates and continues to do so. And yes, the middle class is shrinking. Because people are moving up in income brackets. The problem with using income inequality to push policy is that the measurement of economic status is a snapshot in time of data that is fluid. Most Americans do not stay in the same socioeconomic class for as long as a decade. Therefore, class warfare tactics become even less rational when we understand there is no fixed one percent or 99%. For at least one year, 73% of Americans will be in the top 20% of income earners in their lifetime and well over half will be in the top 10%. No one denies there is still poverty that should be addressed, however the percentage of people that stay below the poverty line for as long as a decade is 3%, while the percentage of Americans that stay in the top 1% for the same time frame is even lower – only 1.1%.

Our wealth as a population and our standard of living in the United States continues to increase along with the wealth gap. So, is the wealth gap a result of immorally obtained income or a successful, functioning economy?

Jeff Bezos has a net worth of $165.6 billion, Bill Gates has a net worth of $103.8 billion, and Elon Musk has a net worth of $20.1 billion. According to the dogma of total equality, the disparity of monetary value between these men and the people below the poverty line is immoral and is the result of the oppression of the poor. We live in a society where success is shamed and envy is called social justice. Not only is evidence of this claim absent, the opposite can be argued to be true. Jeff Bezos didn’t walk around the Bronx, pickpocketing single mothers on food stamps and all of a sudden become a billionaire. His wealth, like the majority of wealth made in modern America, is self-made off of the mutually beneficial transactions of capitalism.

The idea of wealth redistribution policies presupposes that wealth was distributed in the first place. In reality, the direct income earned from goods and services rendered makes up the vast majority of wealth. The wealth that is distributed would be that of welfare and other government assistance programs.

Without Jeff Bezos, we would not have Amazon. Without Amazon our lives would be extraordinarily less convenient, businesses would not have the profit they make from utilizing the platform, and 647,500 jobs would not exist. The amount of wealth generated for the American people (and people around the world) as a result of the creation of Amazon by Jeff Bezos is virtually immeasurable. The same can be said for Bill Gates, Elon Musk, and all those “evil” one percenters. The one percent created the goods and services for the 99% that was previously exclusive to the wealthy, thus increasing our standard of living.

Income inequality can be evil. It’s evil when it is the result of socialist rule, as we see in Venezuela. Wealth was confiscated from the people for distribution, leaving the people poorer and the bureaucrats richer. Unlike a free market system, there is no choice in wealth distribution. Your talents, skills, decisions, and entrepreneurship hold no merit when a centralized force controls the output in order to foster “wealth equality.” Policy with the goal of income equality puts a ceiling over your head and tells you that you’re not allowed to rise above it. The consumer moves as a collective, not as an individual, in order to maintain an equal level of mediocrity.

Wealth that is generated by the rich was not stolen from you, nor is the wealth generated by you stolen from anyone else. So, why do we act like it was? Our lives are made better by wealth generation and the inevitable disparity that comes with it. Bernie Sanders and the Democratic candidates calling for income equality won’t achieve their desired outcome by lifting us up; they will achieve it by tearing the prosperous down. Measuring our individual economic well-being by the successes of others is the epitome of greed. Analyzing the disparities between us through the lens of injustice and class warfare will require us to solve problems that don’t exist. Yes, in general, the wealthy are getting wealthier, but so is everyone else.


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Alyssa Ahlgren

Alyssa has her Bachelor’s in Business Administration and currently works as an analyst in corporate finance. She grew up in northern Wisconsin and is a former collegiate hockey player. Alyssa is pursuing her passion for current events and politics through writing and being an advocate for the conservative movement.