The American Dream is grounded in the idea that if you work hard enough and exercise grit you can achieve success. For the purposes of this curriculum unit, success is defined as upward mobility or an individual climbing the economic ladder. Traditionally, education has been the path to success.
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However, economic inequality is making it harder for people of low-economic status to access educational opportunities. The United States is caught in a cycle: rising inequality leads to inequality of educational opportunity which leads to inequality of educational attainment.
All of this results in continuing economic inequality for generations.
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On the surface, inequality may seem like a simple word to define. However, depending on your point of view, inequality means different things to different people.
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And economists not only struggle to define the word but also how to measure it.
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There are three metrics used to illustrate economic inequality: income, consumption, and wealth. Typically, wealth is the most unequally distributed and consumption the least.
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While the three measures are distinct, inequality across all three areas is trending upward. The United States has the most wealth inequality in the world and is one of the most unequal nations regarding income. Using the Gini coefficient as the measurement, where 0 is perfect equality and 1 is perfect inequality, the United States scores a .80 for wealth inequality
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and a .48 in income inequality.
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As illustrated in the figure below, one can see that the families with the highest incomes are exclusively making wealth gains.
Figure 2. This graph illustrates the change in wealth overtime. Upper income families are shown to be the only group making gains in wealth.
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In the United States, we are seeing a positive correlation between wealth and income across generations. The more wealth and income you have, the more likely it is that you will be able to grow and save your money to pass it on to future generations.
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