Could Entrepreneurship Be the Great Equalizer? Fresh-faced new-business owners may be able to combat a pressing social and economic issue: income inequality.

By David Sederholt

Opinions expressed by Entrepreneur contributors are their own.

On a recent visit to the Entrepreneurship Lab at Pace University in New York City, my friend Jim Duffy and I watched a presentation by a student describing the business he was seeking to launch. The budding entrepreneur figured out how to produce small quantities of high-quality printed promotional products for small businesses and organizations and make money to boot. From both a business and tech proposition, this was a smart kid.

The real brilliance emerged when he started his pitch by introducing himself and the Pace Entrepreneurship Lab. "This is not a place where they teach you the skills to get a job," he said. "We are learning how to create jobs." I turned to my buddy Jim and said, "I love this kid."

Both Jim and I are serial entrepreneurs and alumni of Pace, so we felt a real sense of pride in watching this young small-business owner deliver a well-conceived pitch in order to raise some seed capital. In hearing his remarks, I realized that these students were working to combat one of the most pressing social and economic issues of their generation: income inequality.

Related: Student Startup: Why College Is the Perfect Time to Launch a Business

Economic inequality debated. We hear a great deal these days about the growing economic inequality between the wealthy and average working people. Arguments rage, numbers are tossed about and resentment builds, yet a well-reasoned resolution remains elusive.

Amid this debate an unexpected bestseller has emerged that is brilliant and controversial, striking fear into the hearts of conservatives and liberals alike. Prominent economist Thomas Piketty argues in his popular new book, Capital in the Twenty-First Century, that neither the progressive initiatives of the left nor the conservative dogma of the right offer any real solutions.

Piketty says rising inequality is a built-in feature of capitalism and not some current aberration thrust upon the masses by the rich. A natural feature of this inequality is that equity, assets and capital grow on their own. They do not require labor on the part of the owner, thus widening the gap between those who possess capital and typical wage earners. If labor is a person's only asset, he or she will keep losing ground to the rich. Bottom line: A person can't just collect a paycheck. He or she has to create capital.

Related: Troubling Trend: Fewer High School Grads Are Choosing College

The economic reality. People in the middle class are being squeezed from all sides and are relying on their paychecks to grow relative to their expenses. Their only investment strategy is to keep their credit card debt under control and set aside some savings. There is no talk of blue chip stocks or small-cap strategies or the long-term benefits of buying stock in Berkshire Hathaway, despite its recent downturn. These people work just to get through each week and month, hoping something is left in the cookie jar to save for a rainy day.

The fabled American Dream appears to be a concept of the past, and despite record corporate earnings, a fully recovered stock market and unemployment numbers returning to prerecession levels, wage earners are still struggling to get ahead. The middle class aspiration that each generation will do better than the last is stuck in the mud. The working guy believes that the system is gamed against him in a conspiratorial plot and that the wealthy are taking advantage of him and his peers by refusing to share equitably the fruits of their collective labor.

This inequality and division is viewed by many economists and world leaders as the defining issue of our time. It's so powerful that it can and may destabilize much of society economically and socially and throw us back to a class division resembling an early episode of Downton Abbey.

Related: How Small Businesses Can Ease America's Job Shortage

A possible solution. It is not a question of rich or poor, upper class or lower class. It is really a question of whether a person chooses to live his or her life as an owner or an employee. This is not meant in the classic sense of the definition. Even at a company, some truly act as owners and others merely punch in, do their time and collect a check. Indeed the behavioral patterns of someone with an "owner" personality are different from those in the "employee" class. These owner types very often break out of their jobs and become entrepreneurs.

The wealth and capital that's been amassed in the world can be directly tied to those who took ownership. These are the people who have realized that if labor is the only asset they possess, an employer might always pay them a salary but they can never keep pace with the growth of capital. As many people in the merchant class of Victorian England or 19th-century America found out, ascension to a wealthier class is very often attained through the path of entrepreneurship.

So as I listened to the young entrepreneur at Pace speak enthusiastically about his dreams, ideas, solutions and new baby company, I knew that the answer to the issue of wealth inequality -- at least for those choosing to be the owners of this world -- may very well rest in entrepreneurship.

Related: Get Ready for the Next Digital Revolution as the Rest of the World Goes Online

Wavy Line
David Sederholt

Executive Vice President and Chief Operating Officer, Strategic Funding Source

David Sederholt is the executive vice president and chief operating officer of Strategic Funding Source, a small business financing company in New York City. Previously, he has served as a biomedical researcher, restaurant owner, corporate executive, business consultant and owner of a commercial real estate brokerage firm.

Editor's Pick

'Catastrophic': Here's What You Should Know About the Debt Ceiling Crisis — And How a Default Could Impact Your Business
I Helped Grow 4 Unicorns Over 10 Years That Generated $18 Billion in Online Revenues. Here's What I've Learned.
Want to Break Bad Habits and Supercharge Your Business? Use This Technique.
Don't Have Any Clients But Need Customer Testimonials? Follow These 3 Tricks To Boost Your Rep.
Why Are Some Wines More Expensive Than Others? A Top Winemaker Gives a Full-Bodied Explanation.

Related Topics

Business News

7 of the 10 Most Expensive Cities to Live in the U.S. Are in One State

A new report by U.S. News found that San Diego is the most expensive city to live in for 2023-2024, followed by Los Angeles. New York City didn't even rank in the top 10.

Business News

'All Hell Is Going to Break Loose': Barbara Corcoran Issues Warning About Real Estate Market, Interest Rates

The "Shark Tank" star appeared on FOX Business' "The Clayman Countdown" this week.

Money & Finance

3 Ways to Create Multiple (Big) Streams of Income

Here are three ways to create multiple streams of income. These strategies require effort and resources but offer significant financial potential.

Science & Technology

She's Been Coding Since Age 7 and Presented Her Life-Saving App to Tim Cook Last Year. Now 17, She's on Track to Solve Even Bigger Problems.

Angelina Tsuboi, a full-stack mobile and web developer who also happens to be a pilot, has always been solution-oriented.

Science & Technology

Why We Must Reimagine Education in the Age of Technology

Here's why we must reassess our traditional notions of education in the digital age.

Growing a Business

A Guide to Visualizing Data in Your Pitch Deck

What separates your pitch deck from the 99% that go in the trash? Learn how to use data visualization to create compelling investment decks that secure investments to get your business off the runway.