Final answer:
The income gap between the wealthiest and poorest in the U.S. has expanded dramatically since the 1970s, influenced by supply-side economics, tax structures, and growing disparities in wage distribution. These issues, compounded by the Great Recession, have led to stagnating wages for average workers and significant societal challenges.
Step-by-step explanation:
The income disparity between the top 1% of earners and the bottom 20% in the United States has widened considerably since the 1970s. This can be attributed to factors such as the economic shift away from manufacturing and the adoption of supply-side economics, commonly referred to as Reaganomics. Wealth distribution has increasingly mirrored patterns seen in developing economies rather than those in Europe.
Income inequality was exacerbated by the Great Recession of the late 2000s. Despite overall economic growth since 1980, the benefits have been disproportionately enjoyed by the wealthiest, with wages for the average worker stagnating and CEO pay soaring. Policy decisions, such as tax cuts, have favored the rich, further cementing their financial advantage and influence over public policy. The resulting economic strain on the middle and lower classes has substantial societal repercussions, including impacts on health outcomes, crime rates, and psychological health.