U.S. ECONOMIC INEQUALITY is Rising. What Can We Do About It?

By Julie Weiss

 

To the Teacher:

In July 2011, the Pew Research Center released a report showing that Americans' household wealth dropped dramatically from 2005 to 2009. Perhaps the report's most disturbing finding was that the drop was extreme for Hispanic and African American households, and significantly less so for white households. The data show that the disparity in wealth in the United States is partly defined by race and ethnicity.

Inequality is growing in the US across the board. In the last 30 years, American wealth has "trickled up," with the rich getting richer and the rest of us - white, black, and Latino - losing ground. A tiny percentage of Americans controls the lion's share of the country's wealth.

In this lesson, students will look at the Pew Research report's findings, as well as data that show overall economic inequality in the United States. They will then read about some of the systemic factors that contribute to economic inequality, and discuss what they and others can do to bring about a more just system.

Goals:

  • read and analyze graphs that show data about economic inequality
  • identify systemic factors that maintain and further economic inequality
  • explain strategies to combat economic inequality

     


Part I:

Economic Inequality Among Racial and Ethnic Groups

Explain to students that an analysis of data from a government survey revealed that Americans' household worth has fallen in the past few years - and that Latino and African American families saw their net worth fall more than white families.

1. Median Net Worth of Households

Display the chart of Median Net Worth of Households, 2005 and 2009, or give students a copy of it to look at. (See pdf charts.) Begin by explaining that to understand the graph, they'll need to know a few terms.

Median: Explain that "median" means midpoint. When we talk about the "median income" for a particular population, we mean that half the people in the group have more than the median, and half have less. Ask students to discuss why they think a group's median income might be useful to know. How is it different from the average income?

Net worth: Explain that net worth refers to the total of what you have minus the total of what you owe. For a household, that means the total income of the people who live in the household, plus the total value of what they own (the house, car, etc.) minus what they owe (mortgage, car payments, etc.) Economists might put it this way: Net worth = total assets - total liabilities

Have students break into groups of 3 or 4. Ask the groups to look closely at the graphs, starting with 2005. Have them write answers to these questions:

  • What was the median household income for whites in 2005?
  • What was the median household income for Hispanics in 2005?
  • What was the median household income for Blacks in 2005?
  • What do you notice about the numbers?

Ask students to discuss briefly: Do the numbers surprise you? Why or why not?

Then have the groups look at the 2009 graphs, and write answers to these questions:

  • What was the median household income for whites in 2009?
  • What was the median household income for Hispanics in 2009?
  • What was the median household income for Blacks in 2009?
  • How does that data from 2009 differ from the data from 2005? Although median household income dropped for all three groups, what group appears to have suffered most? How did you reach that conclusion?

2. Change in Median Net Worth

Tell students that they will now look at a graph that will help them see how much each group's median income changed. Display or distribute copies of Percentage Change in Median Net Worth of Households, 2005 to 2009.

 

Ask each student to write a sentence or two that translates the data in this graph into words. Then have them discuss in their groups how this graph is related to the 2005 and 2009 graphs that they looked at before.

Reconvene the full class, and work with students to come up with a summary of what the data in the three graphs has shown them. Suggest that students use the word "disparity" in their summary, looking it up, if necessary, to find out what it means. 

Discuss with students what they've learned. You might note that while there is clearly wealth disparity overall based on race and ethnicity, many white families are poor, and many African American and Latino families are middle or upper income. 

 


Part 2: 

A snapshot of US economic inequality

This part of the lesson puts the data students have just studied into a different context. Rather than showing the disparity of wealth according to racial and ethnic groups, it shows how unequally wealth is distributed in general in the United States.

Help students see that economic inequality is rampant in the United States, and that while some groups suffer more than others, a large percentage of all Americans suffer from the unequal distribution of wealth.

If there were just 100 Americans...

Display or distribute this graphic, which shows the overall distribution of wealth in the US: "If there were just 100 Americans …"

Explain to students that this graphic looks at economic inequality in a different way. Help the class analyze the graphic, using these questions as guides.

  • What is useful about thinking about if there were just 100 Americans? What is useful about thinking about the country's wealth as $100?
     
  • Look at the horizontal line with the images of the little people. Which people are on the left? Which are on the right? What progression do you see along the line?
     
  • What does the graphic show about the 50 people on the left? How much of the nation's wealth do they control? How much does that mean each person has?
     
  • What about the next 40 people?
     
  • The next 9 people?
     
  • The last person?

Have students discuss what the graphic reveals about who has how much wealth in this country. When it's clear that they understand the message, ask them what they think about this information. How does it make them feel? Tell students that in the next part of the lesson they will discuss one proposal for how to address this inequality.

'A Tax Policy for the Common Good'

Help students see that there are systemic reasons for economic inequality, and that alleviating that inequality requires systemic changes. There are many ways to address inequality, from jobs programs to raising the minimum wage to changing the law so that it's easier for workers to organize. Another way is through tax policy.

You might also point out that looking back at US history, there were many moments when people working together were able to change policies to make society more fair and equitable. For instance, labor and community organizing in the 1930s led to radically better pay and also broader social benefits; the civil rights rovement led to huge gains for African Americans and others; and the women's movement made great strides in achieving greater equality for women.

Have students read Warren Buffett's op-ed in the New York Times, "Stop Coddling the Super Rich." Tell students that Warren Buffett is an American businessperson and investor--and also one of the richest people in the world. Then discuss the piece, using the following questions as a guide.

1. What does Warren Buffett mean when he says: "While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks." What government structure is Buffett pointing to as one way that the rich get richer?

2. Buffett says that one source of the disparity in wealth in the United States is "the privileged treatment of income from wealth over income from work and wages." What is the difference between the two sources of income? What group benefits most from the different way the tax code treats each source?

3. What role can the wealthy pay in creating a more just tax system? What role can everyone else play? What are some ways that we can influence government policy and make our society more fair?

 

This lesson was written by Julie Weiss for TeachableMoment.Org, a project of Morningside Center for Teaching Social Responsibility. We welcome your comments. Please email them to Morningside Center at: lmcclure@morningsidecenter.org.