Causes of poverty and inequality

  • Created by: 14hwilcox
  • Created on: 09-12-18 17:33
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  • Causes of poverty and inequality
    • Inequality in wages or unemployment
      • If workers can earn a higher level of education, they will be able to access jobs with higher wages.
        • Those with lower levels of education might struggle to find a job, and if they do, it might only be low paid.
          • This is especially harmful where countries do not have a National Minimum Wage or unemployment benefits, since it can leave people in relative poverty.
      • Recently, more part-time and temporary jobs have been available rather than full time jobs.
        • This leaves people underemployed, and it limits how much they can earn. It was especially a problem during the Great Recession.
      • On average, those with a degree earn more over their lifetime than those who gain just A Levels
        • Jobs in the low-skilled service industries, especially in the public sector, tend to pay less than jobs in the private sector.
    • Welfare payments
      • State pensions and welfare payments tend to increase less than wages
        • . This means that those on benefits see a smaller real increase in their income compared to those in jobs
    • Taxes
      • regressive, which means those on lower incomes bear a larger burden of the tax. This can increase inequality and relative poverty.
      • Over the last 2-3 decades, the UK has switched towards indirect taxes, which tend to be more regressive.
    • Disease, malnutrition and other health problems
      • Health issues can make it hard to get a job, especially in a country where jobs are scarce and rarely available.
    • Corruption and political oppression
      • Countries with corrupt leaders might have higher levels of poverty. There is likely to be relative poverty since the leaders might keep most of the wealth.

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