The great Recession of 2008 left many middle-class families reeling, and still recovering from lost jobs and foreclosed homes. In December 2013, President Obama called the growing income gap a “defining challenge of our time.” Considering the challenges such as global warming, terrorism, cyber-security and national security threats, healthcare, and so many other seemingly impossible issues facing the country, and the world, why is the growing income gap so important? The middle-class has been the lifeblood of many modern advanced economies and with the widening gap between the elite and everyone else, the future of the nation is uncertain. The consumer oriented American society however will continue to function the way it has until the number of homeless and strife become unbearable. In the meantime, the businesses have to continue to cater to the shareholders, even as the executives receive handsome salaries, bonuses, stocks, and golden parachutes.
These economic forces shaping the country have the power to redefine the consumer habits of tomorrow, and have an impact on the social structure. A study conducted by Pew Research found that 36 percent of the Millennial generation were living in with their parents. Declining employment, rising college enrollment, and declining marriage were all reported as key factors in this growing trend. While this can be considered a lifeline to these Millennials, it cannot sustain them for the rest of their lives. How long this lifeline will stay open, and what the Millennials do with their time while living under their parent’s roof could determine their future once their parents have departed.
Rising cost of education and weak job market coming out of college may have a deterring effect on many, leaving a generation burdened with insufficient education, difficult to find job experience, and continually changing global landscape. Additionally, the new healthcare system implemented as Obamacare, relies on the income and contributions from the younger generation to support the elder. This could cause further strife if the medical care system cannot stay solvent.
Cost of living in general has gone up significantly in the last couple of decades, and continuing on its upward trend. With the large section of the middle-class families sustaining themselves on lower wages, the classic American dream of home ownership appears uncertain in the future. This could flood the market with too many unsold properties, causing further deterioration of the housing market, and the economy. With the earning power reduced, families will need to meet the basic needs of food and shelter. The number of part-time workers who would rather have full-time jobs is abnormally large for an economy with a 6.7 percent unemployment rate. This discrepancy is likely to become even greater in the coming years, because the longer this segment of the population is out of full-time job, the lower their hiring desirability. Therefore, many of these part-time workers may end up becoming full-time part-time workers. This can put real strain on family cohesion.
Social inequality comes in many different forms, and humans appear to have a knack for finding all such avenues easily. Throughout American history, the citizens have taken charge when conditions became unbearable, and a lot of bloodshed has taken place during those times. The social inequality created through this income gap, if continued to let go unchecked, is likely to lead to future civil unrest. The future of the middle-class and that of the country go hand-in-hand, and right now, it appears uncertain.
Opinion by Amit Singh