Income inequality causes (1 Viewer)

[stargaze]

What are the actual causes?

Like, I know things like the GST, deregulation of labour markets, recent tax reforms have heightened inequality, but if asked a question what actually is the CAUSE of inequality, what have u ppls got?

(cant find in textbook)

 

[underthebridge]

The most obvious reason for income inequality is simply the difference in factor income returns for people's contribution of resources i the production process. Some labour is of a higher quality than others and thus should receve more income. Also differences in wealth cause income inequality as often forms of wealth actually generate income. The decentralised wage system that the Gov. began to lean to in the 1990s meant that wages were determined more by market forces, and so there was less regulation on wages because of this, which meant that some wages grew faster than other. Hope that helps.

 

[sk8ie_boi]

What are the actual causes?

Like, I know things like the GST, deregulation of labour markets, recent tax reforms have heightened inequality, but if asked a question what actually is the CAUSE of inequality, what have u ppls got?

(cant find in textbook)

Market forces: relative demand for worker's skills, relative wages, impact of unions, existence of surplus labour, amount of wealth to start with, location

Institutional forces

Social forces

Others: education n skills, gender (women average weekly income is almost 30% lower than men), age (for most men, their earning peeks at 35-54 yr olds), cultural background (language spoken at home), family sturcture (2 income households is much higher than single income households)

 

[stargaze]

Ah Okie, thanks... Nothing specific then

A few more qs:
(sounds stupid but i cant find it)
1. How do u calculate the equilibrium level of income? When they give u like a table of consumption, investment, government spending etc?
2. Possible policies to deal with stagflation (high unemployment & high inflation) [just saw this appear in some random paper in the multiple choice]

 

[Jago]

1. when Y = C + I + G + X - M

2. deal with one, then the other (during the 1970s the govt targetted inflation management before unemployment)

 

[sunjet]

- Decentralised wage determination system
- High income professions require skills that are hard to obtain
- Age/Gender/Race(Background)/Education/Family Structure
- High Interest Rates
- GST

 

[azza_3761]

Ah Okie, thanks... Nothing specific then

A few more qs:
(sounds stupid but i cant find it)
1. How do u calculate the equilibrium level of income? When they give u like a table of consumption, investment, government spending etc?
2. Possible policies to deal with stagflation (high unemployment & high inflation) [just saw this appear in some random paper in the multiple choice]

Equilbrium level of income = (a + I)/(1 - MPC)
where: a = consumption when income equal to 0
I = investment