Is income inequality a problem in the US?

The article, “Is income inequality a problem in the US?,” discusses the underlying reasons for income inequality in today’s economy. Tyler Cowen, an economist at George Mason University, and Matthew Yglesias, an economics writer, discuss the issue of the widening income gap between the rich and poor. Cowen’s view is that the underlying reason for this income gap is that there isn’t enough mobility due to education inconsistencies throughout society. He elaborates saying that children of parents that went to good schools tend to go to good schools themselves, whereas children with parents that didn’t, do not go to schools. A solution to this would be to improve the quality of education for K-12 and informational resources to more equally equip students to have an opportunity to attend a competitive institution regardless of their financial background. Yglesias agrees with the identification of education as a factor that leads to income inequality but adds that a lack of geographical mobility also deepens the problem. He argues that housing tends to be more expensive where better schools are located making it less accessible for poorer people. Another interesting point that was brought up was that many individuals don’t realize hard work and discipline pays off with better wages. US policy has very little reciprocal altruism policy despite it being the leader of income inequality relative to the developed world. The US social safety net is not as large as it would need to result in substantial redistribution because the US doesn’t want to give too many incentives to people to be more lazy, therefore increasing moral hazard. In conclusion, government policy is going to have to take a proactive commitment to solving these underlying factors to improve this widening income gap.

http://www.npr.org/2011/11/29/142883180/how-to-solve-wealth-inequality