More than forty-five million people, or 14. 5% of Americans today are living below the federal poverty line. As we know twenty-two percent of wealth is owned by only one percent of the population. This means that only 78 percent of Americas wealth is distributed throughout the upper middle class, lower middle class, working poor, etc. According to Frank Holmes a person that is apart of the 1% has to earn at least $521, 411. While a family of four that is considered to be living in poverty makes an average of $24,600(Amadeo 1). A way to combat the poverty levels on American soil is by hanging our system of government.
Capitalism has many perks such as: an established free market, consumer growth, little interference from government, and much more (7 Decisive Pros and Cons of Capitalism). Though Capitalism works wonders on our economy and grants certain levels of freedom, it does lack in some areas like: giving a true amount of equal opportunities, and a real care for the middle class and below. Overtime Capitalism creates an economy that it is money-oriented. Instead of providing for the common good, businesses create products or services with only profit in mind (Pettinger).
To put it luntly, services are only available to the people that can afford them. Changing our government from a Capitalist system to a Socialist system would improve wealth distribution between all classes. Socialism is the regulation of production and the handling of money through the government. What capitalism falls short in is what Socialism thrives in. Socialism gives real equality throughout the classes by offering chances of purchasing cheaper land and enforcing healthcare to all peoples (Socialism Pros and Cons List).
Even Karl Marx believed that capitalism would succumb to socialism due to the inequalities etween classes, Freeman and slave, patrician and plebeian, lord and serf, guildmaster and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, that each time ended, either in the revolutionary reconstitution of society at large, or in the common ruin of the contending classes. With all the great benefits of Socialism come significant problems.
The biggest problem with Socialism is that the level of poverty will not necessarily change; the distribution of wealth would result in damaging economic growth to the point of xhausting all wealth until everyone is equally poor. The next big issue about Socialism is the encouragement of becoming lazy. When a person lives under the notion that no matter how hard the work or how much they achieve, they will still receive the same trophy as everyone else, it deteriorates their motivation to try. Socialism works well for a while until everyone starts to cave in under the collapse of the economy.
This solution to helping poverty levels would be short lived (Socialism Pros and Cons List). A different way to decrease the amount of people living in poverty is by increasing minimum wage. Many people today believe that raising the national minimum wage to fifteen dollars an hour would only have a good impact everyone. According Carmen Rios raising the minimum wage is necessary because a person, no matter what they do or how well educated they are, deserve to know what its like to not worry about feeding themselves and live in an adequate shelter (Should the Federal Minimum Wage Be Increased? ).
A recent person who ran for president, Bernie Sanders, gained a lot of support for his ideas about increasing wages as a means to help the lower class. Increasing minimum wage would not be the best solution to elping the poor. A raise in having to paying employees more would force businesses to lay off more workers and this would raise unemployment levels. Another large hole in the idea of increases wages is that as employers are forced into forking over more money to the employees, they will try to make up the differences by increasing the cost of their service and products, thus there would be an overall raise in cost of everything.
Raising the minimum wage to fifteen dollars, contrary to oopular belief, would not increase spending power or help the poor (Should the Federal Minimum Wage Be Increased? ). Another popular solution to fixing poverty levels is creating more social programs. Social programs such as Obamacare, Medicaid, and social security offer a means to help those in need of assistance. Obamacare or the Social Care Act, lowers the overall cost of healthcare, eliminates lifetime and annual coverage limits, and denies insurance companies from raising prices for pre-existing conditions.
Medicaid is very similar to Obamacare in the sense of providing better healthcare (Wpadmin). Social Security is quite different compared to Obamacare and Medicaid. Social Security is available to the disabled and retired eople. People that are a part of Social Security receive monthly checks for food, housing, bills etc. (What Is Social Security? ). Unlike Obamacare, everyone, no matter what social class, pays into his or her own social security. While Obamacare and Medicaid main focus is healthcare, Social Security is about having a retirement plan.
Increasing federal dollars or creating more social programs could potentially help people living below the poverty level. An additional solution that has the potential to reduce poverty is supporting pay equity. Pay equity according to the National Committee is, a means of eliminating sex and race discrimination in the wage-setting system. Many women and people of color are still segregated into a small number of jobs such as clerical, service workers, nurses and teachers.
These jobs have historically been undervalued and continue to be underpaid to a large extent because of the gender and race of the people who hold them. Pay equity means that the criteria employers use to set wages must be sex- and race-neutral. Many believe that for every dollar a man makes a woman make seventy-eight cents, and thus causing a higher rate of women nd people of color living in poverty. Women, on average, earn less than men in nearly every single occupation.
IWPR or Institute of Women’s Policy Research, recently reported that sex and discrimination in the workplace, shows discrimination in pay, hiring, or promotions are huge factors as to why they believe there is a wage gap. The pay equity solution to reducing poverty levels has some flaws. One flaw is that there is probable doubt in the disbelief of the gender wage gap. A distributor to Forbes, Karin Agness, writes that the majority of surveys about the wage gap do not ake things like: sick days, differences in occupation, and the different levels in the workforce.
If pay equality does not exist then there would be no change in poverty levels. For the sake of debating this solution, lets say that the wage gap did exist, but we fixed this problem; paying males and females the same amount for the same job would not get a significant amount of people out of poverty. A person working in a low paying job will still make a small sum of money. The best possible solution that would help reduce poverty levels the most, is the creation of more job and the government aking tax cuts. Using the Expansionary Monetary Policy lowers the federal funds rate to increase money supply.
Expansionary fiscal policy is also a way to creating jobs. Expansionary fiscal policy allows tax cuts or the increase of spending to give more money to the consumer or directly higher more people (Amadeo). The creation of jobs greatly impacts the unemployment rate and the level of income a household earns. None of these solutions can fully get rid of poverty in America. We all would like the social classes to be less unequal with the amount of money power they hold, but do not take the idea hat the poor are responsible for their lack of money (Ariely).
Poverty and drug abuse have an association with each other. Drug or alcohol abuse has a significant cause in changing one social status from middle class to homelessness (Addiction and Poverty Interlinked). There are also people who are carless with their money or are too lazy to care about living inn poverty, to help themselves. Becoming responsible for yourself will not always change your social status, but it will help you live a better financial life. Hopefully our new president and government officials will help the reduction of those living in poverty.