ECONOMICS
INCOME DISTRIBUTION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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There is a difference in the wages that people earn
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All people pay the same amount of tax
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All people earn the same amount
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Income-earning assets are distributed fairly
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Detailed explanation-1: -Wages tend to be higher if the industry has powerful trades unions. In the past two decades, we have seen a decline in the strength and density of trades unions; this has been a factor in increasing wage inequality. One factor to consider is not just the income people receive but their living costs.
Detailed explanation-2: -Disparities in wealth, which continue to grow over time, are especially influenced by factors such as parental wealth, education and ethnicity (ONS, 2020; Gregg and Kanabar, 2022). These same factors also influence the composition of household wealth holdings and whether individuals own their home.
Detailed explanation-3: -Main points. Disposable income inequality increased to 35.7% in the financial year ending (FYE) 2022 from 34.4% in FYE 2021. This follows a decrease of 1.0 percentage points between FYE 2020 and FYE 2021, the period covering the first year of the coronavirus (COVID-19) pandemic.
Detailed explanation-4: -Some of key factors behind the increase in within-country income inequality noted in the literature include technological progress, globalization, commodity price cycles, and domestic economic policies such as redistributive fiscal policies, labor and product market policies.