Causes of income/wealth inequality

Question: What is the main point about the National Living Wage (NLW) and poverty?

Answer: Someone working full-time on the National Living Wage (NLW) shouldn’t be in poverty.

Question: Why does the government claim work is the best way out of poverty, and why is this challenged?

Answer: The UK Government says work prevents poverty, but wages have grown slowly for 20 years leaving many still struggling.

Question: What evidence shows that working does not always prevent poverty?

In 2022 64% of working-age adults in poverty lived in households with at least one worker showing wages aren’t enough to prevent poverty.

Question: How does in-work poverty highlight issues with the NLW?

Answer: In 2022 23% of admin and support workers faced in-work poverty, showing the NLW is too low and low pay drives income inequality.

Question: What is the government’s argument in defence of the National Living Wage?

Answer: The government says the NLW is fair balancing business costs and worker pay.

Question: How does the Living Wage Foundation challenge the government’s claim?

Answer: The Living Wage Foundation says the NLW is too low and recommends a Real Living Wage based on living costs.

Question: What example shows that job security is also a major issue for low-paid workers?

Answer: Many low-paid workers like those at Amazon or Uber, have zero-hours contracts making their jobs unstable and financially insecure.

Question: Why does job insecurity make low pay an even bigger problem?

Answer: Job insecurity affects 1 in 3 workers (10 million people), meaning higher wages alone may not protect them from financial hardship.

Question: How does the argument link back to the overall issue of income and wealth inequality?

Answer: Employment is seen as the way out of poverty, but low wages and job insecurity cause income inequality. Raising the NLW and improving job security could help.