UC Law Journal of Race and Economic Justice


Carlos Jurado


The United States is currently facing record high rates of income inequality and, as a result, there is a general lack of social mobility. This is troublesome for Americans because of the potential disastrous implications for the United States economy. The current state of the American market has enabled an environment where a few elite continue to hoard large amounts of the profits generated by the economy while the lower class has experienced a substantial growth in population with incomparable economic growth. In addition, the middle class has significantly diminished and can soon be rendered ineffective in its role as the thriving force of the

American economy. Moreover, the effects of income inequality have been especially harsh on marginalized communities, people of color, and groups of Americans who are particularly vulnerable to current market conditions. This Note argues that the three sectors of the American market—the government, private, and nonprofit sectors—have enabled the current high rates of income inequality as a result of either a failure or purposeful scheme to sway the market in favor of a few elite. Consequently, there is the need for the creation of a fourth sector that is able to alleviate the side effects of such inequality. This Note argues that the official creation of a For Profit Social Enterprise (FPSE) sector would be an effective means of enabling social mobility amongst groups who are most vulnerable to current market trends. In creating, growing, and maintaining the FPSE sector, legislation must aim at strengthening and improving FPSE entity regulations, creating a FPSE oversight agency, incentivizing social entrepreneurs, and creating enticing FPSE investment vehicles to attract private funding from social investors.

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