Title: The causes of economic inequality.
Headings: The Causes of Economic Inequality
The Causes of Economic Inequality
By: May Leung
Difference in income plays a role
(i) Wages are determined by labor market
(ii) Education affects wages
(iii) Growth in technology widens income gap
(iv) Gender does matter
(v) Personal factors
Inequality is a vicious cycle
Chart 1
Chart 2
From a broader perspective: Economic policies and structure
(ii) Globalization
(iii) A Kuznets curve – Phases of development
Figure 1: Kuznets Curve
Edited by Angela Lutz
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Content: Moreover, receiving the same level of education does not mean receiving education of the same quality. This accounts for the difference in abilities and hence wages for individuals all receiving, for example, 12 years of education. Therefore, it seems no matter how good the social welfare policy of a country is at preventing denial of education due to financial difficulties, differences in education, in terms of levels and quality, still play a prominent role in economic inequality. (iii) Growth in technology widens income gap
Growth in technology arguably renders joblessness at all skill levels [3]. For unskilled workers, computers and machinery perform a lot of tasks these workers used to be do. In many jobs, such as packaging and manufacturing, machinery works even more effectively and efficiently. Hence, jobs involving repetitive tasks have largely been eliminated. Skilled workers are not immune to the nightmare of losing jobs. The rapid development in artificial intelligence may ultimately allow computers and robots to perform knowledge-based jobs [3]. The impact of increasing unemployment is stagnant or decreasing wages for most workers, as there is a low demand for but high supply of labor.