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How Does Wealth Inequality Within Diverse Communities Impact Inclusivity?

The socioeconomic challenges of modern society are wealth inequality, which affects

economic mobility, social cohesion, and inclusivity. Disparities in wealth distribution result from

historical injustices, systemic discrimination, and socio-economic structures favoring certain

groups. Unfortunately, since these marginalized and underprivileged communities tend to have

the most disproportionate falls, they are thus faced with impediments in acquiring opportunities

and enabling themselves out of perpetual poverty. Wealth inequality hurts inclusivity by making

sources of resources such as education, healthcare, and employment opportunities inaccessible.

The reason diverse communities do not enjoy equality of participation in society is complete

unfairness. In this paper, I explore how the presence of inequality in wealth scavenges at the

issue of race, gender, and social background. Besides, it has developed policies on how such

differences can be closed and how a more inclusive society can be developed.

Wealth Disparities Among Racial and Ethnic Groups

Structural factors of prejudice in wage disparities and unequal property ownership and

credit access continue to primarily produce racial or ethnic disparities in wealth. According to

the Board of Governors of the Federal Reserve System (2023), the Black and Hispanic earnings

are half of the White earnings; they also hold 15-20 percent of the wealth. And the history of

when this divergence came to be makes it even worse. The Peter G. Peterson Foundation report

also notes that Blacks coming with some college and Associate Degree or more had an average
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income of $51,960, Asians $81,020, Hispanics $46,880, and White Americans $69,070. These

differences are also location-dependent and have an associated demographic component. As

such, minority communities end up being locked at the level of inadequate wealth accumulation

primarily because of the low property values and poor funding of schools that limit their chances

of seemingly productive opportunities.

Historical Context and Systemic Barriers

It will be important to state that history played an important role in determining the gap

between the rich and the poor. African Americans had been denied rights and equality and

discriminated against, which has affected their chances of attaining economic success in

America. The freedom of Blacks in America did not grant them equal opportunities, as they were

locked out from economic opportunities provided to white persons. Redlining was a lending

practice that formally denied loans to Black individuals, especially for home purchases, to

confine them to substandard neighborhoods, which denied them an opportunity to gain

generational wealth (Rothstein). Likewise, the GI Bill, which made financial provisions for

education and homeownership, favored white soldiers, and Black soldiers were discriminated

against when implementing the bill (Radford et al.). These policies are mainly because of the

continued existence of economic disabilities that are to this present day.

Discrimination in Labor Market and Employment Disparities

Discrimination is another factor that results in the continued unequal distribution of

wealth in the employment market. A study by Bertrand & Mullainathan (2004) suggests that

individuals with ‘ethnic-sounding’ names were less likely to be called back for an interview,

even when the quality of qualifications presented is the same as that of the white candidates

(Bertrand et al., 998). Such biases result in limited employment opportunities as well as a slow
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rate of salary increment for minorities. Moreover, some of the wage differences are apparent

when people are categorized based on their race or gender. Based on the National Women’s Law

Center (2023), African-American women earn only 64 cents for each dollar earned by White

men, adding to the economic margins (Katz et al. 57). They are also employed in low-wage

industries that have insecure and unpaid compensation and contract-based employment with less

chance of impressive earnings.

Effects on Education and Social Promotion

Education is an important factor in the migration process; however, inequality in school

financing and equipment contributes to it. Schools established in areas with diverse minority

populations experience limited funding, and as such, schooling outcomes are reduced, and the

prospects of learners are poor (Reardon 40). According to the American Council on Education

(2023), 66.5% of Asian and 52.9% of White adults attain an associate degree or higher education

level, while 39.0% of Black, 32.2% of Native American, and 29.5% of Hispanic adults of the

population. Student debt worsens these inequalities, elevating Black and Hispanic graduates’

debt burden and hindering their ability to fund wealth-creating expenditures, homeownership

first among them (Addo et al. 69).

Social Cohesion and Community Fragmentation

Wealth inequality fosters social unrest and community fragmentation. This is due to

characteristics such as poverty, unemployment, breakdown of the economy, education level,

illegitimate means of income, crimes, dependency, dependency on the government, political

power orientation, belittling of institutions, and impotence to change. Wilkinson & Pickett

(2011) assert that in societies where the rich-poor gap is huge, social problems are more rampant,

and people’s active involvement in civility declines (Wilkinson & Pickett). While the rich parties
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engage themselves in businesses, they seldom interact with the poor parties due to a general lack

of similar business opportunities; hence, conflicts may arise from these disparities in wealth.

When economic inequality is persistent, then the potential of some people to be left out in certain

systems of advisories is high, of which the continuation of poverty and discrimination is boosted.

Health Disparities and Economic Exclusion

Furthermore, the current levels of wealth also affect people’s health, whether through

direct results of these levels or indirectly related to them. Untimely deaths are more frequent in

less privileged neighborhoods where those who are suffering from mental health conditions,

chronic diseases, and early mortality rates are rife (Braveman et al., 395). Availability itself is

economic-related, where ample economic systems inhibit access to effective quality health care,

leading to deep-rooted imbalances. The COVID-19 pandemic brought these inequalities into the

limelight; low-income communities and communities of color were more affected by infection as

well as mortality than any other community because of issues with late access to healthcare and

issues to do with their economic instabilities (Bailey et al., 770). To treat these health disparities,

one would have to address the issue of equity in terms of healthcare accessibility and its cost.

Policy Recommendations for Economic Inclusion

To include such people and eradicate what we have come to associate with wealth

inequality, there is the necessity to have the following reforms instituted by the policymakers:

1. Education Development: Enhancing funding for underprivileged schools, increasing the

scholarships for needy students, and making quality education accessible to all needy students.

2. Areas of legislation: enforcing the ban against discrimination at the workplace, increasing the

minimum wage, and enhancing labor rights.

3. Tax reforms: Increasing taxes on activities such as purchases made or sales of assets in the

economy because such taxes result in a better distribution of income in society.

4. Choice Implementation of Affordable Housing: Eradicating discrimination in mortgage

lending, increasing the inventory of cheap homes for sale and rent, and minority home buying

opportunities.

5. Improving Access and Affordability of Health Care: Expanding Medicaid, investing in public

health programs, and addressing the social determinants of health to rationalize healthcare

outcomes among vulnerable groups.

Conclusion

Wealth stratification threatens social equity, economic opportunities, and social cohesion

in society. Systemic employment discrimination, past injustices regarding civil rights, and other

barriers to access keeping different minority groups inferior to economic rivals are some of the

ways through which marginalized communities are sustained. It was established that eradicating

poverty is both an ethical requirement and an economic solution. Poverty reduction strategies,

equal access to education and employment, and realistic labor rights constitute some of the vital

factors that have to be undertaken to reduce the levels of inequality in society. The authorities

need to carry out certain necessary changes aimed at the equality of opportunities for

development for any person, irrespective of his race, sex, or background.

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