European nations Essay Example for Free

European nations Essay 1. Analysis of data collected from these sources has led researches to conclusively establish the fact of huge wealth gap existing in US society along with establishing the trends in the wealth distribution over almost past 80 years. Studies indicate that in the period 1915-1925, though the wealth gap was large per se, it was more equally distributed than the gap existing in European nations. Wealth inequality, thereafter, continued to rise from 1930s to 1960s, until reaching its peak in 1962 when top 1 percent of wealth owners owned nearly 35 percent of the total wealth and top 5 percent wealth owner had control over more than 80 percent of the total wealth. Further research suggests that where the total wealth of all the Americans has rom 1960 to 1990s, the gap between mean and median wealth has also increased considerably, indicating towards widening inequality in wealth. The gap appeared to decrease through rest of 60s and 70s due to various social welfare and income generation programs launched by government. In this period the share of top 1 percent of wealth owners declined to 19 percent from previous high of 30 percent. However, by 1980 it again started to climb, reaching to peak in 1990s when the former sharp inequality was restored. Research from Danziger et al 1989, Wolff 1993 and many other economists and social scientists show that from 1983 to 1989, share of top 0.5 percent of wealth holders increased by 5 percent. This rise becomes especially conspicuous in the face of corresponding decline in wealth of poorest 80 percent of population by 2 percentage point in the same period. Further, the bulk of growth in net wealth for the period from 1983 to 1989 took place in top 10 percent of wealth owners, strengthening the idiom that ‘Rich gets richer and poor get poorer’. By 1990s, wealth distribution in US had become much more skewed and in favor of the elite group than European nations. Meanwhile the advent of Information Technology and a dot-com revolution created class of neo-riches that further skewed the wealth map of United states. Wealth distribution from 1989-2001 Implementation of new technology, globalization, and Internet revolution created new set of Internet multi-millionaires, while taking the stock of many existing corporations over many fold. The new model of income generation also had significant on wealth distribution in American society. Following table indicates family wealth generation and distribution for period from 1989-2001. Figure1- Family distribution of wealth As the table shows, for the period between 1989-2001, all families in higher income group has shown significant increase in percentage point. Also, it is evident from table that for the same period, the percentage of poorer families lost out in almost all the segment, registering decline in their wealth holding. An interesting revelation about nature of wealth gap emerges from study of wealth distribution among the lowest 90 percent of wealth holders (Figure 2). It can be seen for this group that the overall pattern of unequal wealth distribution holds true even at macro levels; among the lowest 90 percent population, the lowest 50 percent are allocated mere 3 percent of the total wealth. Reasons of Wealth Gap Economists have tried to definitively ascertain unequal wealth distribution and wealth gap that has almost historically existed in every society. Presently, economists look at the issue of unequal distribution of wealth from macro and micro perspective-the first dealing with implication of wealth at overall national scale, and second looking on personal and family role in wealth distribution. The macro analysis states that it is in nature of wealth to increase itself. Wealthy people possess stocks, bonds, shares, equities and other capital stock whose values tend to increase with time and thus it creates additional wealth for them, by the mere virtue of its presence. The micro analysis states that individual effort, family work abilities and cooperation also increases income and consequently wealth. As wealthy families have already better resources and opportunities to invest them, they stand to gain more even in this process of wealth creation. As a solution, government can take measures to ensure that even though wealth gap may exist, there should be a minimum upgrade in income and wealth possession of people from all the income group, to give society a more equitable appearance and standing. Reference Lisa A. Keister , and Moller, S. 2000. Wealth Inequality in the United States . Journal-Annual Review of Sociology. Chandrika Kaul and Valerie Tomaselli-Moschovitis. Statistical Handbook on Consumption and Wealth in the United States ,; Oryx Press, 1999. 296 pgs. Arthur B. Kennickell. A Rolling Tide. Changes in the distribution of wealth in US. 1989-2001. Survey of Consumer Finances. Available on line on 17. 12. 2007. https://www.federalreserve.gov/pubs/oss/oss2/papers/concentration.2001.10.pdf