The Main Causes of Income Inequalities in the UK - Essay Example

In regards to the issues of low wage rates amongst a particular class of citizens, Stiglitz (2012) stated that the gap between the poor and the rich widens when the employees are forced to use all of their income to feed their families and hence, leaving them with nothing to save for investment purposes.

Unemployment is another major cause of income inequalities in the UK because the people who are not engaged in any form of business or job rarely earn an income. In contrast, the wealthy companies that provide them with high incomes create a gap between them. In the writings by Parker (2004), she cited education also another cause of income inequalities since individuals who are learned and educated get opportunities to work for well-paying organizations, while the illiterate or less educated lack similar opportunities since they lack the documents to prove that they have the knowledge and skills necessary for high paying jobs.

Chen and Zhou (2004) stated that the causes of income inequality could be divided into personal and national reasons. The individual causes include the ownership of resources, motivations, family size, qualifications, and skills (Parker, 2004). The national causes include economic power, climate and the size and quality of the labour force. Measures to reduce income inequality The government of the UK should formulate policies to reduce the income gap between the rich and the poor by ensuring that all the individuals who are working in various organizations are paid good salaries that will enable them to sustain their families and save part of their income for investment purposes.

The government should motivate the poor who are unemployed by providing working opportunities for all without discrimination and encouraging them to use their talents, skills, and creative ideas to start their businesses to reduce the rates of unemployment in the UK. The fees paid in schools should be affordable to ensure that people are educated and have better incomes when they start working (Welch, 2001). Conclusion Income inequality is a state whereby the rich earn more money in society, creating a big gap between the poor and the rich.

Some of the causes of income inequalities are unemployment, low payments, and illiteracy, which make individuals either earn less or no income. The UK's government can reduce income inequality by helping its citizens get better employment payments, improving education systems, and encouraging people to use their talents and skills to start businesses.