Six policies to reduce economic inequality

Social inequality refers to disparities in the distribution of economic assets and income as well as between the overall quality and luxury of each person’s existence within a society, while economic inequality is caused by the unequal accumulation of wealth; social inequality exists because the lack of wealth in …

Inequality affects economies and societies, with growing evidence that excessive inequality may be bad for growth. There are also concerns that inequality may dampen educational opportunities and social mobility.

1. Increase the minimum wage.
2. Expand the Earned Income Tax.
3. Build assets for working families.
4. Invest in education.
5. Make the tax code more progressive.
6. End residential segregation.

Problems of Inequality

• Inequality arising from monopoly power. If firms have monopoly power, they are in a position to set higher prices to consumers.
• Inequality arising from Monopsony power.
• Diminishing marginal utility of income.
• Social Problems.
• Unemployment.
• Inherited Wealth.

A “solution” of an inequality is a number which when substituted for the variable makes the inequality a true statement. Adding/subtracting the same number on both sides. Example: The inequality x-2>5 has the same solutions as the inequality x > 7.

It is the existence of unequal opportunities and rewards for different social positions within a group/society. Some popular factors of social inequalities are gender, sexual orientation, race and ethnicity, age discrimination, immigration, income and health, health and mental health and education.

Sociologists examine how things such as formal laws, public policies, and dominant values both lead to social inequality, and help sustain it. Sociologists study how these social reforms help shape or change social inequality that exists in a society, as well as their origins, impact, and long-term effects.

Ferdinand Mount Equality is divided into five rough types: political equality, equality of outcome or result, equality of opportunity, equality of treatment and equality of membership in society.

Perhaps the most quantified and calculated form of inequality is the economic variant. Even here, the most predominant forms of inequality measured are those of income inequality and wealth inequality.

While economic inequality is associated with more social ills, economic prosperity dampens them. Inequality is bad for society as it goes along with weaker social bonds between people, which in turn makes health and social problems more likely. At the same time, richer countries have less social ills.

Social mobility is restricted by inequality – equality of opportunity is increased by greater equality of outcomes. More equal countries tend to have higher rates of innovation, probably because of greater social mobility. Poverty reduction is compromised by income inequality.

Reducing inequality requires transformative change. Greater efforts are needed to eradicate extreme poverty and hunger, and invest more in health, education, social protection and decent jobs especially for young people, migrants and other vulnerable communities.

If a society decides to reduce the level of economic inequality, it has three main sets of tools: redistribution from those with high incomes to those with low incomes; trying to assure that a ladder of opportunity is widely available; and a tax on inheritance.

One of the major reasons there is economic inequality within modern market economies is because wages are determined by a market, and are hence influenced by supply and demand. In this view, inequality is caused by the differences in the supply and demand for different types of work.

It is a product of policies, laws, institutions, social-cultural norms and practices, governance deficits, and the unequal distribution of wealth and power.

Effects of income inequality, researchers have found, include higher rates of health and social problems, and lower rates of social goods, a lower population-wide satisfaction and happiness and even a lower level of economic growth when human capital is neglected for high-end consumption.

In more equal countries, human beings are generally happier and healthier, there is less crime, more creativity and higher educational attainment.

A major cause of economic inequality within modern economies is the determination of wages by the capitalist market. In the capitalist market, the wages for jobs are set by supply and demand. If there are many workers willing to do a job for a great amount of time, there is a high supply of labor for that job.