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Income Inequalities in UK


IncomeInequalities in UK


Thissection highlights the aspect of income inequalities in the UK. Theintroduction section ends with a thesis statement which states “Thispaper will look at some of the causes of income of incomeinequalities in United Kingdom”

Mainreasons and Remedies

Thissection offers the main causes of income inequalities and remedies inthe U.K. The highlighted areas include:

Wagesand salaries differences

Unequaldistribution of wealth

Dealingwith unemployment and introducing policies for equal income wages

PromotingIncome distribution

Aconclusion is then offered.

IncomeInequalities in UK

Incomedistribution is the relativity or the diversity that exists in termsof the income that people have within the economy. Income inequalityis therefore a situation where a large share of a country’s incomeis dominated by a few rich people while the majority shares a smallamount of income. Taking the case of U.K, a small percentage of thenational income is shared by the poor majority of the population,while a large percentage of the nation’s income is shared by therich minority (Cribb, 2013). This paper will look at some of thecauses of income of income inequalities in United Kingdom.

MainReasons and Remedies

Thefirst reason is the differences in the wages and salaries that arepaid to workers. This exists where people working in differentcareers and occupations are paid differently. For instance, theunskilled workers earn far much less skilled than the workers. Inaddition, people with the same skills sometimes are paid differentlyfor working in similar jobs and job environments (Salverda &ampNolan, 2009). These differences create a gap between those who arehighly paid and those who are lowly paid. Most of the people in thecountry earn their income from jobs, which makes jobs a criticalelement of income distribution (Cribb, 2013). Therefore, any unequalpayment of workers in terms of salaries and wages leads to directeffects on the income distribution in the economy.

Furtherincome inequality is created by unequal distribution of wealth. Thishappens because the owners of resources in the economy use theresources to generate more income, thereby widening the income gapbetween the rich and the poor (Xavier, 2006). In addition, theinequality is generated by the use of economic resources by the richto transfer income from the poor to the rich. For instance, owners ofland and real estate, rent the land and houses to low income workerswho spend their salaries on paying rent, to the owners of theresources (Henderson, s2008).This circumstance can be rectified by the government if majoreconomic resources are controlled by the government and used togenerate public income and offer public employment opportunities.This can be replicated in all the sectors of the economic resourcesin the U.K economy, leading to better income distribution.

Toachieve equal distribution of income, the government should tacklewith unemployment and introduce policies for equal income wages. Theunemployed people are left with no means of generating income,thereby continuously increasing the number of the population that ispoor. In addition, the government should pass laws to guarantee equalpay among the employed by introducing minimum wages (Xavier, 2006).This will reduce the gap between the incomes of the two extremes. Byreducing unemployment levels, the diversity of the income inequalitywill proportionately reduce. The equality trend will also lead toequality in income received during pension since it depends on theemployment levels.

Incomedistribution is unequal when majority of income is dominated by aminority number of people in the economy. This is a result of thedomination of the economic resources of the minority group, which usethe resources as the tools of income. This leads to two extreme endsthe rich, who are the minority and the poor who form the largemajority.


Tokeep the status quo of income inequality, the rich receive furtherincome from the low-income earners in exchange of basic economicgoods. This leads to income inequality cycles that is further fueledby unemployment.


Cribb,J. (2013). Incomeinequality in the UK.Retrieved From,

&lthttp://www.ifs.org.uk/docs/ER_JC_2013.pdf&gtApril 30, 2014

Henderson,D. (2008). ConciseEncyclopedia of Economics(2nd ed.). Indianapolis: Library of

Economicsand Liberty

Salverda,W., &amp Nolan, T. (2009). TheOxford Handbook of Economic Inequality.Oxford:

OxfordUniversity Press.

Xavier,S. (2006). &quotThe World Distribution of Income: Falling Povertyand Convergence,

Period,&quotQuarterlyJournal of Economics,121(2), May, pp.&nbsp351–397