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The Rise of Income Inequality

by Blake Williams and Mayra Lopez


As Daniel Saldaña drives up to the CVS parking lot, he prepares himself for the customers he’ll face throughout the day.

When he steps inside the store, he immediately sees customers not following COVID-19 protocols. A woman who wears her mask halfway only covering her mouth and a man standing less than six feet behind her are waiting in line for check out. Saldaña, a 21-year-old CSUN student, sometimes witnesses customers coming in without a mask and refusing to put one on when a clerk offers them one.

“I will have customers in the store that I will encounter without a mask and I'll ask them, ‘Hey, do you have a mask’ and they'll be like, ‘Oh no, I don't,’” Saldaña said. “And I'm just like, why are you here if you don’t have a mask? Go to the front and ask us for a mask and we'll be happy to give you one.”

As an essential worker during the COVID-19 pandemic, Saldaña gets paid $20 an hour thanks to the $5 hazard pay that L.A. City Council mandated early this year. This increase helps him save more money for his living expenses that he estimates costs him about $700 per month.

However, the extra pay will only last for 120 days after receiving the first bonus. He’s been trying to work more hours to take advantage of the hazard pay and has been working around 25 to 30 hours per week. After the bonus pay runs out, he will return to his normal salary.

“It really took them a whole year to increase our salaries under a pandemic,” Saldaña said. “It's not even a permanent thing.”

Saldaña, like many other workers in the U.S., feels underappreciated and underpaid while risking his health at work. Low salaries can take a mental health toll on workers and keeps people living from paycheck to paycheck. The result is an income inequality gap that is unparalleled throughout history.

Income inequality in the United States has been steadily growing since 1979 and has accelerated due to the COVID-19 pandemic. 

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“It really took them a whole year to increase our salaries under a pandemic,” Saldaña said. “It's not even a permanent thing.”

Wages have not kept up with increased productivity from workers. Between 1948-1979, the growth in wages and productivity increased at a similar rate of 108% and 93% respectively. However, between 1979-2019, net productivity has grown by 70% while hourly compensation has increased less than 15%, according to the World Economic Forum.

If wages rose at a constant rate with worker productivity, the minimum wage today would be more than $24 per hour, according to the Center for Economic and Policy Research. However, the federal minimum wage has not risen since 2009 when it was increased from $6.55 to $7.25. 

In March, Congress voted against raising the minimum wage to $15 an hour, which was considered the compromise amount by advocates. Every Republican senator, plus seven Democratic senators and one independent who caucuses with the Democrats, voted to reject the bill proposed by Sen. Bernie Sanders (I-Vt.).

One of the Democrats who voted against the bill was Rep. Krysten Sinema (D-Az.) who previously supported raising the minimum wage to $15. She was heavily criticized for appearing to vote no in a playful manner, which was deemed insensitive by activists and politicians, including Rep. Rashida Tlaib (D-Mi.).

When the video of Sinema’s vote went viral, Tlaib quote tweeted it saying, “No one should ever be this happy to vote against uplifting people out of poverty. This is Senator Sinema voting no on $15 minimum wage.”

President Joe Biden and Vice President Kamala Harris have also continued to say they support increasing the minimum wage. However, they declined to pass the minimum wage increase through reconciliation because they did not want to overrule the Senate Parliamentarian, an unelected advisor with no official power. 

While critics argue raising the minimum wage would kill businesses and put inflation out of control, this hasn’t been the case in Seattle, which already passed a bill to increase their minimum wage to $15 by 2021. There is no consensus among economists over the results of the bill, but Washington state’s Office of Financial Management found Seattle’s job growth outpaced the state as a whole, their population increased and average hourly earnings grew nearly 15%.

Amazon CEO Jeff Bezos’ net worth has grown more than $76 billion since the beginning of the pandemic, according to Public Citizen, a nonprofit consumer advocacy organization, and Tesla CEO Elon Musk has seen his net worth more than triple during the pandemic, according to a 2020 report from Business Insider.

Despite his increased wealth, Bezos has been battling his employees at Amazon warehouses, including firing them, for trying to unionize for increased pay and better working conditions. Amazon has been criticized for their poor warehouse conditions, such as expecting their employees to act like robots to keep up their intense productivity, according to a report from The Guardian.

Musk has been criticized by Tesla workers and advocates for “risking the health and safety of its workers in relentless pursuit of these gaudy numbers,” according to the Observer. The report says their California workers have had to work 60 hours and six days per week during the pandemic. Musk has also previously advocated for 80-hour work weeks.

All while paying $0 in state income taxes, according to Forbes.

Retailers and grocery stores have also refused or fought to increase wages to their employees during the pandemic. According to the Brookings Institute, 13 of the largest retail and grocery companies in the US earned nearly $18 billion more in the first three quarters of 2020 than they did a year earlier. The research also found they stopped offering extra compensation to their associates in the summer and started to buy back shares while giving big sums to their executives. 

Some grocery retailers, such as Ralph’s and Food 4 Less, have gone as far as closing stores to avoid paying the additional $4 hero pay passed by the Los Angeles Board of Supervisors. They claimed the stores were underperforming and could not afford the increased pay, despite their parent-company Kroger posting record profits, which increased by 56%.

Because of the store closures, community members and UFCW 770, a union that represents more than 25,000 grocery and drug retail workers, called on Kroger to stop closing stores that affected 250 workers and limited access to members of the community from getting fresh food

The whole point of the hazard pay is for us to be compensated for all the hard work we do and the higher risk of Covid infection that we face while doing our jobs,
— Brittany Bouknight

An employee at one of Ralph’s stores that was shut down said in a press release from UFCW 770. “As we continue to push through the pandemic, essential grocery workers are dealing with extremely high levels of anxiety because we do more than just bag groceries and stock shelves. While helping our communities buy their food so they can sustain their families, we’ve also experienced verbal and even physical abuse when reminding people to keep social distance or wear their facemasks properly.”

However, income inequality isn’t just limited to the United States. It is a problem that is affecting more than two-thirds of the world, according to UN News.

Despite the trend, there are ways the problem can be solved, according to a study from UC Berkeley

Raising the federal minimum wage to $10.10 would lift 4.6 million people out of poverty and add approximately $2 billion to the nation’s overall income. The inequality gap could further be decreased by expanding earned income taxes, building assets for working families, investing in education, setting a more progressive tax code, and ending residential segregation.