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Income Inequality in the United Kingdom2




Incomeinequality in the United Kingdom

Inthe United Kingdom, there are widespread inequalities as evidenced bymedia reports the inequalities can be based on the performance ofchildren from poor and rich families. In addition, widespreadinequalities have been reported by the media regarding thedifferences in the income of employees and the management, whichsupervises their work. Although there are various forms of inequalityin the United Kingdom, it is income inequalities that have attractedthe attention of economists. Over the years, the gap between the topearning executives and subordinate employees of organizations haswidened tremendously. One of the causes of income inequalities in theUnited Kingdom is education. Education has financial returns, whichhave contributed to the rise in income inequality (Cribb 2013).

Withthe advancements in technology, the United Kingdom employees havewitnessed a change in financial returns, which can be derived fromeducation. This emanates from the fact that skilled and educatedemployees tend to earn more than their unskilled and semi-skilledcolleagues. The liberalization of trade can also be regarded asanother major cause of income inequalities in the United Kingdom(Ranciereet al 2012).As a result of trade liberalization, there is an increase ininequalities because of the differences between skilled and unskilledlaborers, especially in the developed world. With tradeliberalization, the goods produced using cheap labor in thedeveloping countries tend to be exported to the developed nations.Consequently, the wages paid to unskilled laborers in developednations such as the United Kingdom decreases. On the other hand, thesalaries for skilled laborers remain considerably high, thusresulting to the income inequalities being witnessed in the UnitedKingdom (OECD2008).

Thechanging patterns of employment also contribute to the differences inincome inequalities. Over the years, the numbers of families that donot have any adults working have risen this has emanated from theincrease in the number of single-parent households in the UnitedKingdom that are not employed. Moreover, the number of female workershas increased tremendously, thus resulting to polarization ofemployment. This implies that there is a likelihood for families tohave all the adults working (Cribb 2013). This has contributed toincome inequalities with families where adults work having highersalaries than families where adults are unemployed. Incomeinequalities in the United Kingdom have also resulted from changes inthe taxation policy. With the changes in the United Kingdom Taxationpolicy, net income for top earners has remained high while lowearners tend to get low net incomes (Harjes 2007).

TheUK government can employ a number of measures so as to ensure thereis more equitable distribution of wealth in the nation. One of themeasures includes increasing the income of both poor and middle classcitizens. This way, the citizens in the lower social classes willhave the opportunity to save more money as a result of which theywill get returns from their savings. Thus, equal income distributionwill ensure there are no wealth disparities between the rich and thepoor. Another measure includes setting minimum wages that can be paidto employees. This implies that the government should determine thesalaries that employers pay to employees. This will help boost theincome of low income earners and unskilled employees, thus reducingthe gap in wealth. With a high income, unskilled employees willmanage to improve the quality of their lives (Birchfield2012).


Birchfield,V L 2012,&nbspIncomeinequality in capitalist democracies: the interplay of values andinstitutions.University Park, Pennsylvania State University Press.

Cribb,J 2013, IncomeInequality in the UK. London,Fiscal Policy.

Harjes,T 2007, Globalizationand Income Inequality: A European Perspective. London,IMF.OECD2008, Growingunequal? income distribution and poverty in OECD countries.Paris, OECD, Organisation for Economic Co-operation and Development. Ranciere,R, Throckmorton, N A, Kumhof, M, Lebarz, C, &amp Richter, A W 2012,IncomeInequality and Current Account Imbalances.Washington, International Monetary Fund.