chapter 7 Flashcards
3 reasons why income is distributed unequally in the uk
There is a link here with wealth. Those sections of the population with more assets will be able to generate
more income from those assets, on top of income earned from employment.
Wage differentials – In the UK a significant number of workers are paid at the National Living Wage Rate,
whilst other occupations pay many more times than this.
Many of the poorest households in the UK rely on pensions or social security benefits for their income.
Unemployment can also be a source of unequal income distribution.
why does uneven distribution of wealth occur
This can be explained through different attitudes towards spending and saving. Over a time period some
household groups will spend all of their income whilst others will do a mixture of spending and saving. The
longer the time period, the greater will be the inequality
What are the consequences for the UK economy of these differences in income and wealth?
The first issue is poverty and deprivation where many people are very poor indeed. This could include homeless people who cannot claim benefits and therefore live in absolute poverty. This is however much more wide-spread in developing countries.
More likely to be seen in the UK are families living in relative poverty, where they have less than 60% of the median income. These groups are unlikely to have any marketable assets, and could be living in poor quality housing.
