Reasons for wealth inequality in the world today

Unemployment

Unemployment is a key contributory factor that can lead to poverty. Those who are unemployed can find themselves trapped in a cycle of deprivation as they do not have the income needed for a basic standard of living or the opportunities to gain the skills required to gain employment.

Evidence (JRF 2017)

● 60% of working-age adults in workless households were in

poverty compared with 16% of those in working households.

Low Pay

Low pay can lead to poverty and wealth inequality as those earning and living on a fixed wage may not be able to keep up with the ​high​ cost of living in the UK. This could lead to people not being able to afford everyday necessities and are unable to afford luxuries.

Evidence (UK Government 2019)

Many argue that the minimum wage is still too low to help those suffering from poverty.

Evidence (JRF 2018)

● 20% of the poorest 5t​ h​ in the UK have debt problems compared with 10% of the second

poorest 5t​ h​ and 0.9% of the richest 5t​ h​.

● The poorest 5t​ h​ have on average £174 a week after housing costs compared to the second

poorest 5t​ h​ who have £299 and the richest 5t​ h​ who have £880 a week after housing costs.

Education & Skills

The educational attainment of an individual is a good indicator as to the likelihood that they will be in poverty. Those with higher level qualifications will have more skills and thus more employable. It is also likely that they will have skills and knowledge that is desirable in professions that pay well such as law and medicine. This makes it less likely that they will experience poverty.

In contrast to those who are low skilled, with low

education will be limited in their employment options.

Those from poorer backgrounds tend to have lower

achievement rates in schools as they leave school earlier to find work and help with expenses at home. They are also more likely to go to low achievement rate schools and therefore are less likely to attain proper qualifications and fall into low paying jobs

Simply, the more educated you are the more likely you are to get a job and be paid well. The elite (privately educated) group in the UK dominate the law, politics, military and media.

Evidence

● Only 7% of the UK population go to private school yet they make up almost 75% of judges

and over 50% of journalists

● One private school, Eton, has produced 19 of the UK’s Prime Ministers

Disability

One factor that indicates how likely someone is to be in poverty would be if they have a disability or live in a household which includes a disabled person. The range of disabilities that people have is vast with some needing little or no

support to others needing significant full-time care. It will be the case for some that having a disability may limit the ability for that person to work thus making them more dependent on benefits which may not be adequate for a good standard of living.

In other circumstances, a household where there is a disabled person may find that other family members are unable to work because they must provide care for the disabled family member. This can restrict their ability to work which could push the household closer to or beyond the poverty line. There are also increased costs associated with having a disability.

Evidence (JRF 2017)

● In 2016 34% of working age adults in families with disabled members lived in poverty

compared with 17% of those who did not live with a disabled family member.

● The gap between disabled people in employment and non-disabled people in employment is

more than ​30%.

Ethnicity/Discrimination

For minority groups discrimination can be a factor that increases the chances of being in poverty. For these groups stereotypes and discriminatory views have historically been a barrier that has held individuals back in education and the world of work. Ethnic minorities have suffered from both direct and indirect racism where they have been denied access to education or even opportunities to interview for jobs.

Evidence (JRF 2017)

Age

Age in the UK is a good indicator of how likely someone might experience poverty. Generally, children more likely to be in poverty. This is because they are entirely dependent on the income of others and so if they life in a low earning household then this increases the chances of suffering from social deprivation.

In contrast working age people have more opportunity to access financial resources (such as employment) in order to find a way out of poverty. In recent times the elderly or pension age people have seen lower levels of poverty. This is from a combination of more generous pension benefits from the government, having fewer dependents than working age people and having accumulated wealth during their working life. Many older people have benefited from owning property when house prices were relatively low but have massively risen in recent decades providing assets to older owners.

Evidence (JFR 2018)

● The poverty rate amongst children is 30%

● The poverty rate amongst working age people with children is 25.5%

● The poverty rate for the UK as a whole is 22%

● The poverty rate for working age people with no children is 18.8%

● The poverty rate for pensioners is 15.8%

Gender

Gender can be a leading cause of wealth inequality. There can often be vast differences in the type of work carried out by men and women as well as the amount they are paid for the work they do. Women are disproportionately represented in low paid jobs and are also much more likely than men to work part-time and therefore be paid less. Women can find it difficult to fully commit to their work due to childcare duties which they typically have primary responsibility for. This can mean that women are often passed over for promotions and pay rises resulting in them being paid less than men, sometimes significantly less, resulting in greater wealth inequality.

Evidence

● Women can often be found in one of the 5C’s jobs of cashiering, catering, caring, cleaning

and clerical, all of which are low paid jobs.

● Only 29% of FTSE 100 board positions are held by women even though they make up about

50% of the workforce.