causes of social inequality Flashcards
what are the 2 types of unemployment?
structural and syclical
when does does syclical unemployment happen?
after a recession
what is a recession?
when people spend less money, so there is less demand for products, therefore businesses shut down, therefore creating unemployment.
explain the inequality that syclical unemployment creates
it causes inequality as during a recession, businesses are more likely to get rid of the lower skilled people as once they are out of a recession they are easier to replace. these lower skilled people will also be lower paid so will have no savings to fall back on whilst the richer, higher skilled people are 1. less likely to be laid off and 2. even if they are laid off then they are much more likely to have savings to fall back on until they can get a new job.
how does structural unemployment happen
happens as a result of a particular factories or firms closing down that causes a lot of people to lose their job at the same time. these people will struggle to find a new job due to a lack of skill and companies not requiring staff.
give an example of structural unemployment
the redcar steel plant closure in 2000
how does structural unemployment cause inequality?
this causes an inequality as because these low paid and low skilled people are so desperate for a job then that means that companies can lower their wages so the workers can end up being severely underpaid.
what is inherited wealth?
Inherited wealth is when assets bought by another generation is passed onto the next generation without those assets being earned/worked for.
It’s now much harder to earn your way to high wealth; the IFS says it is getting much harder for young adults who are not part of the “lucky half” to accumulate wealth of their own. (walesonline article) Fifty years ago, someone with a good salary could save enough over the course of their lives to retire with a good amount of wealth to live off. For many people today this is a distant dream: what matters more is the wealth you inherit or marry in to, rather than the income you can set aside over a working lifetime. A middle income family on just over £26,000, for example, would have to save everything for 96 years if they were to reach the wealth of a household in the top 10 per cent of the wealth distribution (resolution foundation)… this is important because…
this causes wealth to be concentrated in the hands of a small number of people and this wealth cannot be earned easily. This will mean that less and less younger people will be able to buy the traditional wealth assets such as their own home. This will cause inequality to grow as time goes on.
Children with home-owning parents are three times as likely to own a home by the age of 30; this means that half of millennials who don’t yet own homes and have parents with no property wealth, meaning they are unlikely to receive a significant inheritance. this is important because…
Young people are earning less on average than their parents so if they cannot rely on parental help to buy a house, it is likely that they will find it very difficult to do so. And since having a house is the biggest asset most people will own, it is another indicator of wealth being concentrated in the hands of a few with it being very difficult to earn your way into wealth.
define low pay
people not being payed enough for the job they do.
what sectors are accociated with low pay?
hospitality and retail
the extent of low pay is…
60% of people living in poverty live in a household where someone works
how many people in the UK are living below the living wage (9:50/hr)
6 million
what is national living wage and what should it be?
its 8:91 but it should be 9;50
