IndexSummaryIncome InequalityConclusionSummaryThis paper examines the trend and causes of income inequality in the United States over time and explains how universal basic income can be used as an effective policy to solve the income inequality. Compare the United States' steadily rising Gini coefficient value to that of other economically developed countries and further investigate how the gap between rich and poor has been reversed throughout history. On a deeper level, the paper shows how factors such as sexual and racial discrimination play a role in exacerbating the income gap. The main causes of such a huge gap are technological change and globalization. As a result of the technological change that occurred with the fourth industrial revolution, people are experiencing mass unemployment, which leaves universal basic income as a promising solution to help revitalize the economy and reduce income inequality. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay For 40 years, the global economy led by the United States has produced enormous improvements in human well-being. Since 1981, the percentage of the world's population living in extreme poverty on less than $1.90 a day has shrunk from 42% to 10% in 2015. However, in countries with advanced economies, income and wealth inequality has increased , and nowhere has the increase been greater than in the United States, where the dependence on free market forces has been stronger. This amplifies the rewards for those at the top and leaves most others behind. This trend helps those with higher levels of education and hurts those who are less educated. It lifts up residents of big cities while leaving those of small towns behind. For a growing number of Americans, it is more difficult to move forward. The purpose of this article is to explain why the income inequality gap is widening and why previous measures aimed at overcoming economic downturns, such as publicly funding people to get employed, are not feasible in the times we live in. enter the phase of the fourth industrial revolution. This paper aims to demonstrate how universal basic income can alleviate poverty and increase the number of middle class workers by stabilizing the unequal distribution of income. Income Inequality As the United States is in the midst of its longest economic expansion, nine states have seen spikes in inequality from 2017 to 2018: Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas and Virginia (Telford, 2019). Worsening income inequality has been a huge economic problem in the United States, influencing the political sphere by becoming a central topic in the 2020 presidential race, in which candidates have proposed different policies to reduce income inequality. While income inequality is a universal problem that many countries suffer from, the United States is notoriously known for its severe income inequality. For example, according to the OECD, the United States has the highest Gini coefficient level among G7 countries, peaking at 41.5 in 2016 (Schaeffer, 2020). The Gini index measures the distribution of wealth within a population, where zero represents total equality and 1 represents total inequality, where all wealth is concentrated in a single household (Telford, 2019). The Gini coefficient of the United States has been steadily increasing for several decades, startingfrom 0.397 in 1967 to finally reach 0.485 in 2018 (Telford, 2019). Income inequality has always existed in the United States, but the gap between rich and poor has not narrowed. it has always been as broad as it is today. At mid-century, a time of economic stability, the richest 1 percent earned 13 percent of all U.S. income, while the poorest half earned 20 percent of income. In the 1960s, Americans were still enjoying the postwar job boom. In the 1970s, the lowest-paid Americans benefited from a steadily rising minimum wage. Sky-high salaries weren't as typical as they were today. The 1980s were when that changed. The minimum wage remained stagnant, factory outsourcing employment was used as a major economic strategy, and President Ronald Reagan passed huge tax cuts for the very wealthy. By the mid-1990s, the earnings of the top 1 percent collectively exceeded those of the bottom half. The rich were on a tear, and not even the 2008 financial crisis slowed them down. Today, the share of income claimed by those at the top and those at the bottom is completely reversed compared to that of the 1960s. While in 1980 the poorest 50% received 20% of the national income, this figure has steadily fallen to 13% in 2016. In contrast, the richest 1% have steadily increased their demand for national income, from 10% to 20% in less than two generations. (Niemuth, 2017). Additionally, the average annual income for the poorest half of the US population, adjusted for inflation, has remained at $16,500 for the past 40 years, while the top 1% has seen their average income triple from $430,000 to $1. .3 million dollars (Niemuth, 2017). This is very worrying when you consider how higher social mobility is extremely challenging for those at the bottom. The rich tend to stay rich and the poor tend to stay poor. In fact, only 8% of American men rose from the bottom of the rankings to fifth place, compared to 12% of British men and 14% of Danes (Deparle, 2012). There are various reasons why the inequality gap is widening. One of the forces is technological change brought to the digital world. The digital revolution creates an enormous amount of wealth for those who acquire it with the right skills and preparation. Such skills include abstract problem solving, interpersonal communication, or organizational skills, which are things that highly educated workers tend to be highly capable of. At the same time, it eliminates middle-skill jobs by devaluing many repetitive tasks in offices and production lines, hollowing out the set of work tasks available to non-university workers. Instead of human labor, software and industrial machines now fill roles ranging from clerical tasks to routine manufacturing that once produced middle-class incomes for workers without college degrees. This has pushed workers without higher education to engage in personal services, security, transportation, and repairs, where their skills are more substitutable with those of other workers. As a result, this has created a large and inviting world, with economic security for highly educated people, leaving behind people who do not have high levels of education (Harwood, 2019). Another cause is the globalization of world economies, particularly affected by the rise of China. Competition from emerging economies such as China, combined with reduced trade barriers, has further reduced the prospects for workers without advanced skills, with devastating consequences in sectors such as textiles, furniture andof leather goods. China is transforming from a poor country in perpetual political and economic crisis to a frontier producer with a fairly educated and highly available skilled workforce using modern technology at an incredible pace. China's decision to allow free labor mobility to adopt Western technology and foreign direct investment and to begin trading with the world has had a huge effect on the United States since the 1990s. The rate has further accelerated since China joined the WTO in 2001, entering the manufactured goods market, which has led to a huge decline in US manufacturing employment. For example, over the course of just seven years, approximately 20% of all U.S. manufacturing jobs disappeared, only to decline another 11 percentage points during the Great Recession. As a result, one in three manufacturing jobs no longer existed compared to the 2000s (Harwood, 2019). Behind the unequal numbers in income distribution, hide several factors that contribute to the widening of the inequality gap, such as sexual and racial discrimination. The richest 1% in the United States is primarily made up of men. Female-dominated fields, such as teaching and waitressing, are lower paid. In fact, the federal minimum wage for restaurant servers and other tipped workers has been frozen at just $2.13 an hour since 1991 (Allegretto, 2014). Women are promoted less often than men. They earn 82 cents for every dollar men earn (US Census Bureau, 2019). The upper level is also very white. Minority groups face systemic racism that has contributed to gaps in education, housing and employment opportunities. African Americans earn only 78 cents for every dollar earned by whites (US Census Bureau, 2019). This phenomenon is also evident in regional economies. Southern states, which are generally more racially diverse, tend to be more unequal in terms of wage levels, while pockets of the West that are more white-dominated tend to be more equal. Economic policies have been adopted to solve the problem of income inequality. distribution. Some lawmakers have proposed curbing runaway wealth by raising top income tax rates. Many states have recently raised the minimum wage, and some states are closing the education gap by expanding access to early learning programs. However, as the world enters the fourth industrial revolution where automation and the Internet of Things prevail, previous policies have become not so effective. There has been a huge change brought about in the job market. People engaged in repetitive jobs such as data collection, lawyers, engineers and clerks are experiencing massive unemployment, while jobs involving human interaction such as therapists, emergency management and social workers are not automated. This has further increased the wage gap between rich and poor, generating further inequalities. In this process, the middle class disappears, which means that most people are poor. This is a state of recession, where supply exceeds demand in an economy. Supply has increased due to the high productivity generated by innovation, however, because people are poor, they spend less money, thus leading to decreased demand. In Keynesian economics, what can be done in an economic recession is for the government to pay people by giving them jobs to support their lives, as in the case of the Great.