U.S. Economic Inequality Threatens American Dream, Report States

U.S. economic inequality

A damning report claims that U.S. economic inequality is so vast that it undermines American democracy, with the freshly passed Republican tax bill likely to exacerbate the problem.

The report was written by Philip Alston, the special rapporteur to the United Nations Human Rights Council. Alston wrote that, “The American Dream is rapidly becoming the American Illusion” following his study of the U.S., citing that America has, “the lowest rate of social mobility of any of the rich countries.” This information came out as part of his preliminary conclusions of his investigation.

Alston also referred to the latest World Inequality Report to make his case that the growing divide was reaching unbearable levels. He cites research that shows the top one percent of income earners hording 20% of all income in 2016, which amounts to double the share of what the ultra-rich amassed in 1980.

“By comparison, the average annual wage of the bottom 50 percent has stagnated since 1980,” Alston wrote in a preliminary release from his report, which was the result of a two-week tour.


The vast disparity in wealth was the focus of the investigation. Alston traveled far and wide across the U.S., inspecting urban poverty on continental America, as well as making a stop in Puerto Rico.

Alston was led to believe that U.S. economic inequality has led to 41 million people living in poverty, while the top one percent and wealthier individuals more broadly exercise an outsized influence on the political process of the country.

He later goes on to criticize the Republican tax plan as exemplary of a legislative coup for the rich, where the country’s deficit will balloon by over $1.0-trillion while social safety net will be reduced as a result in order to pay for the loss of revenue.

Conservative supporters of the Republican tax plan, conversely, believe that economic growth will largely offset the increase in the deficit, although many studies believe that even with optimistic GDP growth, the deficit is still likely to add several hundred billion dollars in the next decade.

One of the prime features of the Republican tax bill is the reduction of the corporate tax rate from 35% to 21%.

“While most other nations, and all of the major international institutions…have acknowledged that extreme inequalities in wealth and income are economically inefficient and socially damaging, the tax reform package is essentially a bid to make the U.S. the world champion of extreme inequality,” Alston writes.

“The dramatic cuts in welfare, foreshadowed by the President and Speaker Ryan, and already beginning to be implemented by the administration, will essentially shred crucial dimensions of a safety net that is already full of holes. ”

Alston toured the U.S. to experience firsthand the levels of poverty across the U.S. His last stop was Puerto Rico, where the island and U.S. territory is still reeling from the devastation wrought by Hurricanes Irma and Maria. Before the natural disasters, roughly 45% of Puerto Ricans lived in poverty, but that number has since jumped to 52%, according to the University of Puerto Rico in Cayey.

A third of the island still lacks electricity, while thousands struggle to find access to clean water.

This led Alston to condemn the way the U.S. treats Puerto Rico as similar to a colony.

The overall picture that Alston paints in his report is extreme U.S. economic inequality to the point that it can no longer maintain its core values.

Alston believes that U.S. economic inequality is also being reflected in the democratic proceedings in the country, where many are disenfranchised due to incarceration or via other means, often stripping poor people of the vote.

Meanwhile, the rich are able to exercise outsized influence as donors and influencers of policy.



Republican Tax Bill Will Turn The U.S. Into The ‘World Champion Of Extreme Inequality,’ UN Poverty Investigator Says,” Newsweek, December 18, 2017.


Categories: Economic Report, News