Wealth inequalities Flashcards
Background info
Scotland has the 6th largest economy in the world however, this is not represented for most citizens living in this country. This essay will explore the factors which cause wealth and income inequalities in both Scotland and the U.K.
List of factors
This essay will discuss the relationship between a number of factors and income and wealth inequality including the Cost of Living Crisis, unemployment, Universal Credit, Low wages, Ethnicity and Age.
Line of argument
Through discussing these factors, this essay will conclude that all of these factors have a significant impact on causing wealth inequalities in the U.K.
Point one
One cause of income and wealth inequality in Scotland and the UK is the ongoing implications of the Cost-of-Living Crisis.
Point one explain
Whilst arguably a new phenomenon in causing income and wealth inequalities in Scotland and the UK, it is undeniable that the Cost-of-Living crisis has exponentially widened the gap between the haves and the haves not in society. This is down to many factors but primarily because of the rate of inflation increasing dramatically causing an increase in the price of food, fuel and housing whilst the rate of wages and benefits did not increase at the same pace. This means that people who had not previously suffered from income and wealth inequalities were then faced with the reality of living in poverty.
Point one example
For example, between 2022 and 2023 inflation in the UK grew at the rate of 11% while unemployment benefits increased by just 3.1%.
Point one analysis
This proves that for many individuals they were faced with not having enough money to cover the essentials for living and for the first time experienced income and wealth inequality as their source of income was no longer enough to afford basic necessities such as heating or rent leading to wealth inequalities.
Point two/rebuttal
However, other people would argue that unemployment is a more significant cause of income and wealth inequality in Scotland and the U.K.
Point two explain
This is because unemployment, unlike the Cost-of-Living crisis has always been a cause of income and wealth inequality in Scotland and the U.K. Unemployment means that an individual doesn’t have an income coming in reliable which is needed to buy necessities high is needed to survive such as food, shelter and basic toiletries because they don’t have a job.
Lack of income from unemployment can also mean that you are excluded from taking advantage of opportunities that help you get the skills needed for permanent employment.
Point two example
For example, the unemployment rate is Scotland in May 2024 was 4.5%. This is further evidenced by 44% of people in Scotland who are on Universal credit suffering from poverty in Scotland compared to only 15% who are not on benefits.
Point two analysis
This shows that for many individuals who are facing unemployment, they do not have enough money to gain skills to boost their chances of permanent employment and by being on benefits, it drastically reduces your chances or not being in poverty by around 40% making this a significant cause.
Point two link
Overall, Cost-of-Living is the most significant cause of income and wealth inequalities in Scotland and the U.K compared to unemployment as everyone is affected by the Cost-of-Living crisis such as rising prices of food and fuel etc however, not everyone is affected by unemployment.
Point three
One cause of income and wealth inequalities is ethnicity.
Point three explain
This is because racism has always been a pressing factor in causing wealth inequalities as Labour market data has demonstrated that minority ethnic individuals are far less likely to be employed, underrepresented at senior level roles and paid less than their white counterparts.
It also means that they are more likely to experience discrimination in the workplace. However, equality evidence review found that minority ethnic communities tend to outperform at school although this is not reflected in the labour market.
This causes wealth inequalities as they might not have the opportunities to progress in work compared to their white counterparts and are also more likely to work lower paid, lower skilled jobs which could mean that they might not have the chance to gain fair opportunities and are less likely to have the same chances as their white coworkers.
Point three example
For example, minority ethnic households are almost 3x as likely to be in deep or very deep poverty than the Scottish average. This is further proved by around half of all households headed by someone of Bangladeshi ethnicity were in poverty in 2021, as were 40% of households with an individual of Black or Pakistani heritage.
Point three analysis
This means minority ethnic individuals are more likely to face wealth inequalities as they do not have equal opportunities in the workplace compared to their white counterparts which means they are less likely to gain opportunities to get in higher paid positions. This is shown by 41% of minority ethnic women being overlooked for progression according to The Equalities and Human Rights Committee (Scotland).
Point four/rebuttal
However, some people argue that age is a bigger factor in causing wealth inequalities than age.
Point four explain
This is because some people depending on their age cannot access work which means they are more likely to experience poverty due to the fact that they din’t have a reliable income.
Children are more likely to live in poverty and experience the detrimental impacts of poverty across all measure compared to adults as not only can they not work but they cannot make changes to their financial situation and have to be dependent on their adults. This can lead to adverse effects like poor mental health, underperformance in education and being socially isolated, all of these factors make it harder for people to find long-term, full-time employment.
Age also makes it harder for older people to find work as companies want fresh faced and youthful employees to work for their business. They also might have caring responsibilities and face ageism in the office.
Point four example
Statistics show that 24% of children in Scotland are living in poverty. This is backed up by around 1 in 5 young people aged 8-25 experiencing mental health issues.
Point four analysis
This suggests that both younger people and older people are at a higher risk of facing poverty compared to people in their 30s and 40s as they find it harder to find employment because of ageism. This is shown by the youngest working generation 16-17 being paid around 50% less than people aged 23+ according to the National Living Wage rate.
Point four link
Overall, this shows that age is the most significant cause of income and wealth inequalities because unlike ethnicity, everyone is affected by age, and it also significantly reduces their chances of getting employed and they are also likely to get paid less from the National Living Wage.
Point five
One factor that is a cause of wealth inequalities is low education.
Point five explain
This means that those with poor education are at risk of social exclusion and those with a higher education will theoretically have more skills making them more likely to be employed.
A lot of jobs that require higher education are more likely to be higher paid positions. This also means that recently, there’s been a decline in manufacturing and low skill jobs which means that unskilled workers have disproportionately experienced low wage growth which increase the inequalities in wealth and inequalities.
People from less affluent backgrounds are more likely to achieve less academically than people from the most affluent backgrounds.
Point five example
This is illustrated by the socio-economic gap in education starting as early with children from less affluent backgrounds which children as young as 3 already underperforming. This is backed up by The Robertson Trust stating that 1 in 10 school leavers living in the most deprived areas in Scotland are unemployed in the 9 months post school compared to just 2.6 of young people living in affluent areas.
