The Social Welfare History Project defines economic inequality as the unequal distribution of income (earnings) or wealth (net worth or savings) across individuals and groups in a society.¹ It is often characterized by society members remaining stuck in the economic situation they were born into and can become a vicious cycle. Additionally, in a society where having money is a prerequisite to necessities like healthcare, housing, and education, economic inequality is a complex intersectional topic that influences most other pressing social issues.
Despite slavery and the Civil War ending in 1865, formerly enslaved people faced even more economic exploitation through the sharecropping system during the Reconstruction Era.
Sharecropping replaced the plantation system, which heavily relied on the stolen labor of enslaved people, effectively creating a new bondage system.⁸ This new system allowed a landlord or planter to grant a tenant use of a plot of their land in exchange for a share of the harvested crop. The South quickly began to suffer from the abolishment of slavery because formerly enslaved people were no longer providing plantation owners with free labor. Sharecropping was introduced to alleviate the economic tensions that had taken a toll on the Southern economy because the South’s GDP relied heavily on slave ownership and trade.¹¹
African American workers became trapped in a cycle of poverty through the legal practice of sharecropping, where white landowners hoarded the profits of their agricultural labor.¹² This cycle continued for generations.
Another element of this exploitation began when landowners created “plantation stores". These stores prevented sharecroppers from reaching economic freedom as farmers mandated that all sharecroppers use their stores for personal shopping or buying farming equipment.¹¹
These stores often inflated their prices which caused issues for sharecroppers who did not make sufficient income to purchase necessary items. Being in constant debt to the stores created a cycle of financial stress for the Black sharecroppers, and legal protections in Southern courts were minimal as they would not typically rule in favor of Black sharecroppers against white landowners.¹¹ With the mechanization of farming spreading throughout the United States, along with the Great Depression in the 1930s, sharecropping gradually faded out as World War II began in the 1940s.
World War II brought economic inequality for Japanese Americans after their release from internment camps. Following the attack on Pearl Harbor in 1941, President Franklin D. Roosevelt issued Executive Order 9066 on February 19, 1942.³
This order ultimately authorized the forced relocation and incarceration of Japanese Americans from the West Coast into “relocation centers” further inland.
The United States government established these camps because the U.S. War Department believed that Japanese Americans might act as saboteurs or espionage agents, despite a lack of hard evidence to support that view.¹⁵
Japanese Americans were forced to vacate their homes and property and live in these camps throughout World War II. Nearly 120,000 Japanese Americans were incarcerated and were stripped of their rights, freedoms, and identity until the last camp closed in March 1946.
The relocation process for Japanese Americans was an agonizing one as they were given just one week to register with the authorities, gather whatever possessions they could carry, and report to an assembly center nearby.² Evacuees had just a few days to sell their homes and leave their businesses, farms, jobs, and restaurants behind. Many were sent to camps in impoverished areas, where the economic consequences of incarceration persisted even 50 years post-WWII and varied depending on where internees were relocated.
Economic mobility was hard to achieve for not only internees but also their descendants. Those who were placed in more rural areas without contact with cultural centers lived in poor housing, earned less money, and received less education.⁹
Conversely, for Japanese Americans sent to camps in more affluent regions where they had a better chance of taking advantage of resources and opportunities upon release, they were more likely to finish college, work in higher-status careers, and earn more money.⁹
With the assassination of President John F. Kennedy in 1963, his successor Lyndon B. Johnson vowed to extend economic growth and prosperity to all American people by building a “Great Society”, which was a political slogan coined by Johnson to describe his various plans for social reform which remained at the forefront of his presidency.¹⁴
America’s economy was thriving, and Johnson hoped to further this trend through a series of government-launched programs, initiatives, and legislation. He sought to help end poverty and decrease inequalities through social welfare legislation that was collectively known as the “War on Poverty”, which was part of his plan under the "Great Society".¹⁴
In March of 1964, Johnson introduced the Office of Economic Opportunity and the Economic Opportunity Act (EOA), which was officially signed into law in August of 1964.¹³ This legislation worked to help Americans in poverty through the creation of diverse social programs geared towards furthering health, employment, education, and general welfare. Examples of notable programs include the Job Corps,¹⁹ Volunteers in Service to America (VISTA),¹⁸ and Neighborhood Youth Corps.
While there were many successful developments under the "Great Society", controversy arose surrounding how equal these policies and initiatives were. Problems that critics have widely discussed include Johnson’s presidential aides believing that introducing qualitative measures to food security, education, and healthcare would guarantee that every American would have an equal and fair chance at success in receiving opportunities.²⁰ However, this vision was not entirely recognized, as many marginalized groups felt the downsides of Johnson’s programs. For instance, African Americans were dissatisfied with Johnson’s programs as not much had changed for issues such as inner-city poverty, economic disparities, and police brutality.⁶
Civil rights leaders like Martin Luther King Jr. also heavily criticized Johnson and the inadequate role of the programs in empowering low-income individuals. In wanting to address the discrepancies of the programs, King planned to tackle the structural causes of joblessness and economic injustice by launching the Poor People's Campaign.⁵ This campaign wanted to highlight the plight of society’s less fortunate and to push the country's lawmakers to pass federal legislation to improve the economic and social conditions of the impoverished.¹⁰
The consequences of the economic crisis that started in late 2007, along with the impact of it until 2009, is known as the Great Recession. With economic activity quickly declining after the bursting of the U.S. housing bubble, real estate, banking industries, and financial markets were in severe distress resulting in many Americans losing their homes, jobs, and savings.¹⁶ As a result, the unemployment rate during the Recession jumped from 5% in 2007 to 10% in 2009, with Black households seeing a 15% unemployment rate and Hispanic households seeing a 12% unemployment rate.⁴ Disproportionate unemployment rates were not the only economic development impacting minority groups. Mean wealth loss percentages were especially damaging as the range for African American families was 31-34 percent, and the range for Hispanic families was 44-50 percent.⁷
Housing issues date back to the 1640s when houseless individuals in Colonial America were looked down upon and ostracized. However, it is important to note that America’s housing issue was not just a colonial issue.
Before (and during) colonization, Native Americans across the country were forcefully removed from their lands and often killed. The interconnection of racial inequality and housing injustice has a long history.³⁴ For example, after the abolishment of slavery, Jim Crow laws made it extremely difficult for Black people to own property or find proper housing. Additionally, as more ethnic groups, such as the Chinese and Japanese, began immigrating to the United States for work, discriminatory legislation denied them access to proper housing and living conditions.²⁹
Houselessness is also a reflection of the economy and environment. Events such as the Great Depression led to unprecedented rates of unemployment and houselessness, while natural disasters destroyed homes and housing.²⁷
Although the U.S. is a relatively well-developed and wealthy nation, many citizens still face food insecurity. Hunger and access to nutritious food have always been a concern, but it became a political issue in the 1930s when the Great Depression sparked widespread food insecurity. The government intervened, creating a temporary food stamp program in 1939 and the National School Lunch Program in 1946.²²
Healthcare access has been a longstanding issue throughout U.S. history, as debates on whether or not healthcare should be free for everyone or privatized have created rifts in the healthcare system. This issue's turning point came in 1912 when President Theodore Roosevelt endorsed health insurance as part of his campaign.³⁹ Shortly after, in 1915, the American Association of Labor Legislation proposed a bill on health insurance guidelines and compulsory health insurance.³⁹
After the Great Depression, President Franklin D. Roosevelt saw the need for more inclusive health insurance, resulting in the Social Security Act of 1935, which ensured federal benefits for senior citizens.³⁷ In 1945, President Harry Truman advocated for extending national health insurance to all Americans, but his plans were rejected by Congress. Following decades of dispute between presidents and Congress, the Social Security Act of 1965 passed under President Lyndon B. Johnson, which is responsible for what is now known as Medicare and Medicaid.³¹
In the following years, the U.S. would continue to see strides in publicized healthcare with the Affordable Care Act in 2010. The Affordable Care Act (ACA), or Obamacare, significantly changed the healthcare system in the U.S. by reducing the amount individuals and families paid for uncompensated care and expanding Medicaid. The ACA requires every American to have health insurance and assists those who cannot afford a plan.²⁵ In a 2021 report by the U.S. Department of Health and Human Services, 31 million Americans have health coverage through the Affordable Care Act.³³
However, the Act has proved to be a divisive issue. In 2012, the Supreme Court struck down a case claiming the Affordable Care Act was unconstitutional.³²
During the Trump administration, there were numerous Congressional efforts to repeal the Act, and funding for outreach and marketing was cut. In 2021, the Supreme Court, once again, upheld the ACA, and President Joe Biden has promised to build on the Act and expand affordable healthcare coverage. Still, over 30 million Americans do not have access to insurance, meaning there is much work needed toward closing this gap.²⁴
Since the 1980s, the total income of the bottom 90 percent of Americans has steadily decreased, and most of the income gains have gone to the top 1 percent. With this, the educational achievement gap grew; the gap between the reading and math skills of the wealthiest 10 percent of kids and the poorest 10 percent was about 90 points on an 800-point SAT-type scale.³⁵
Studies have shown that this gap starts as early as kindergarten.²¹ Children in higher-income households usually score higher on reading, math, and cognitive skills tests than low-income children. This may be because of rising income inequality, with wealthier parents able to dedicate more time and money to their child’s education, while low-income parents can’t, leading to their children falling behind their wealthier classmates.²⁶
Some school districts have attempted to solve the problem by adopting a “whole-child” approach to education by providing affordable, high-quality early education and after-school and summer programs.²³ These programs have been proven to make a difference, helping children not just in their early years but providing long-term benefits for both children and their families.