Economic Inequality

Examples of social movements in society

Occupy Wall street - movement to raise awareness about economic inequality and the wealth of the top 1 %

BLM - Black Lives Matter, advocating against systemic racism and police violence.

Examples of Inequality

Income, Wealth, Health, Political, Gender, Geography and opportunity

Inequality of opporunity

this mainly focuses on education. The quality of education received can deeply effect the level of income and other aspects of life

Inequality of outcomes

Examples : economic inequality, Income inequality and wealth.

disposable income

income from wages or business or investment - taxes + transfers and benefits

Examples of global inequality

AROUND 50-60% of global incomes accrues to the top 10% highest income earners

Income inequality

The inequality in income is trying to be dealt with progressive tax and transfers systems

How to reduce wealth inequality

Inheritance tax : a tax on the estate of a deceased person, aimed at redistributing wealth.

inheritance can highly benefit the outcomes of many people whilst not others.

Redesign the structure of the inheritance tax

Measuring Inequalities

Gini Coefficient : differnet groups of households receive different shares of total household income

Lorenz Curve

cumulative share of income against cumulative share of household income.

Straight line means complete equality

Why did income inequality rise so rapidly in 1980s?

Income inequality was due to skill-biased technological change.

weak trade unions

regressive changes to tax and benefit system

2021 Allen IFS

The service sector has taken over the manufacturing sector

Manufacturing sector used to provide equal paying jobs and high

Service based jobs are 2 types: high income or low income

regional differences in the UK

Automation and inequality

Machines replace the human labour.

mainly effects the low-paying male workers with lower education

tax policies in favour of investment in automation

pros of inequality

motivation

costs of inequality

can lead to social unrest, reduced economic mobility, and hindered overall economic growth.

How to combact inequality