One reason for economic disparity is the difference in earned wages between the rich and the poor. Job skills have a market price attached to them. Lawyers make more money than high school graduates working at McDonalds because there is a higher market demand and because they have invested more years in their education. If the market is flooded with high school graduates with no college degree, the demand from employers to hire those individuals does not meet the supply. If there is a high demand for lawyers, but not as many on the job market, the demand is higher and thus the wages are higher. In other words, a lawyer looking for a job in a high demand market is a valuable commodity and employers are willing to pay more to fill those positions. The level of education also plays a role in determining how much someone earns. A doctor who has invested in eight years of education will make more than a teacher who may only have a four-year degree.
The cycle of poverty is another explanation for economic disparity. If someone is born into poverty and from parents with little education, there is a higher chance that person will have children that also live in poverty. One of the reasons is the cycle of young motherhood. In poor communities that see young women having children and raising them on their own, or having the help of family raise them, this is considered the norm. The father is not helping them out at home so the mother may still be in high school, finishing her degree or someone who works several jobs taking college classes. Unless she has a strong support system and can attain a higher level of education to get a good job to support her children, she will end up on unemployment or working a minimum wage job, never getting ahead of that level of poverty.

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Economic downturn is another example where economic disparity can be evident. High unemployment will affect the poor more than it will the wealthy. One of the reasons is that wealthy people do not depend on a weekly or monthly paycheck to cover expenses and much of their money is invested or in their assets. Education again is a factor here. Those people with only a high school degree who lose their jobs are less likely to find new work than those with college or post graduate degrees, as they are less marketable. In addition during an economic downturn, everyone who is unemployed is in essence competing for jobs. After the stock market crash in 2008, people with advanced college degrees were taking any job available. And, in 2009, after the fall of Lehman Brothers, even some wealthy people lost everything they had – in particular those who invested with Bernie Madoff.

Minimum wage earners are now competing for jobs with a foreign market, in particular, China. Companies like Verizon are planning to outsource thousands of jobs to save money, which will impact lower, to mid level employees. It must be noted that race plays a role in economic disparity. CNN Money reports “according to federal data, the median wealth for white families in 2013 was around $141,900, compared to Hispanics at about $13,700 and blacks at about $11,000” ( Observe the number of blacks riding city buses versus whites or look at the number of incarcerated blacks and Latinos versus whites and it is obvious that there is disparity not only when it comes to economic status but ethnic status as well.

Lastly, certain parts of the country historically are economically disadvantaged because of the lack of businesses, tourism and access to health care and education. An example would be mining towns in West Virginia or areas in Louisiana affected by Katrina. Mining may be the only means of income for some families so there are fewer opportunities to move up to better paying jobs. Sections of New Orleans were poor to begin with and still have not recovered from Katrina. These are examples where there are fewer opportunities all around for people to earn more, look for better jobs or better their education.