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: 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. A small portion of society, usually the owners of capital, controls an ever-increasing fraction of the economy [3]. The income gap between workers who earn by their skills and owners who earn by investing in capital has widened. Although both skilled and unskilled workers are adversely affected by the technological advance, it seems unskilled workers are subject to worse outcomes [3]. This is because the labor market may still need skilled workers to use computers and operate the advanced machines. The rightward shift in the demand for skilled labor creates an increase in the relative wages of the skilled compared to the unskilled workers.