Inequality Flashcards
What is economic inequality?
The difference in economic wellbeing between people within society.
What is wealth inequality?
The unequal distribution of assets in a society.
What is wealth?
The value (in money) of assets held by an individual.
What is income?
The amount of money a person receives over a period of time, e.g. a month, week or year.
What are 3 examples of a source of income?
Wages, salaries, interest on bank accounts, dividends from shares, rental income, etc.
What are 3 examples of a source of wealth?
Property, land, money, shares, etc.
What is income inequality?
The unequal distribution of income in a society.
What are 6 influences on inequality?
1) Education and training.
2) Taxation.
3) Trade union representation.
4) Wage rates.
5) Ownership of assets.
6) Social benefits.
How can education/training influence inequality?
Access to training and education is not equally accessible in different nations/regions, potentially leading to both income and wealth inequality.
How can wage rates influence inequality?
Certain skills are more desirable within an economy, meaning those with said skills will command a higher wage/ salary, leading to potential income inequality, and later, wealth inequality.
How can asset ownership influence inequality?
Historically, the wealthiest in society own the most assets (land, property, etc.) which are passed down through generations. These assets generate further income and wealth, increasing inequality.
How can social benefits influence inequality?
Government policy, such as welfare benefits, can influence the extent to which vulnerable people in society are protected from poverty.
How can trade union representation influence inequality?
The strength of trade unions will influence the level of employment protection, and therefore income inequality.
How can taxation influence inequality?
Tax systems are used to redistribute income. More progressive tax systems providing tax relief for the poorest, whilst ensuring the wealthiest contribute more, reducing income inequality.
What are 4 negative impacts of high levels of inequality?
1) Absolute and relative poverty remain high.
2) The poorest in society will find it difficult to generate the capital necessary to start a business, restricting economic growth.
3) As the rich become richer, often, the higher their marginal propensity to import. This is a withdrawal from the circular flow of income and does not benefit the poorest in society.
4) Crime and violence tend to rise as people do not have what they need and become desperate.