MYTUTOR SUBJECT ANSWERS

284 views

Why have inequalities increased in recent years?

Income can be defined as a flow of factor incomes, such as earnings, dividends and rent.  Alternatively, wealth is a stock of financial and real assets including savings, deposits and property.  Inequalities in the UK have risen faster than any other OECD country, where relative poverty is defined by the UK and EU governments as household income less than 60% of the median household income. 

Geographical factors

A primary reason as to why wage inequalities have increased over recent years is due to deindustrialisation which occurred in the 1970’s.  This is an important factor which caused the ‘North South divide’ today, resulting in structural unemployment on the back of a contraction within the manufacturing industry. 

Additionally, in the city of London the large bonuses and salaries within the financial sector attracts a greater proportion of workers into that industry.  As a result, this leads to the wage growth of high earners and inequalities as a result.

House Prices

Over the last decade, house prices in London have soared compared to more Northern areas.  This has a regressive effect since lowly paid earners in London pay a greater proportion of their income on housing costs, resulting in consequent wealth inequalities. 

Government measures

A further factor contributing to inequalities in the UK has been the recent cut in unemployment benefits, aiming to encourage those unemployed to enter the workforce.  This temporarily reduces the income of those unemployed since they may be occupationally immobile.

The imposed VAT rates of 20% by the government has a regressive effect for those on low incomes, contributing to the ‘cost of living’ crisis and further increasing inequalities. 

Jessica F. A Level Economics tutor, A Level Maths tutor, GCSE Maths t...

2 years ago

Answered by Jessica, an A Level Economics tutor with MyTutor

Still stuck? Get one-to-one help from a personally interviewed subject specialist

53 SUBJECT SPECIALISTS

£30 /hr

Adam D.

Degree: Economics and Management (Bachelors) - Bristol University

Subjects offered: Economics, Maths

Economics
Maths

“I am a second year undergraduate student at the University of Bristol, studying Economics and Management. I achieved A* in Economics and Maths A-levels and an A* at maths GCSE so would be very happy to help any students who are studyi...”

£30 /hr

Anne H.

Degree: History (Bachelors) - Durham University

Subjects offered: Economics, History+ 2 more

Economics
History
English
-Personal Statements-

“Hi, my name is Anne and I'm a second year at Durham university specializing in economic history.”

£30 /hr

William A.

Degree: Law (Bachelors) - Cambridge alumni University

Subjects offered: Economics, Maths+ 3 more

Economics
Maths
Law
Chemistry
.LNAT.

“I recently graduated from the University of Cambridge in Law and completed my A Levels in 2012 with 4 A*s in Maths, Economics, Physics and Chemistry.I am a friendly and approachable person and have previously tutored A Level Econom...”

About the author

£20 /hr

Jessica F.

Degree: Economics (Bachelors) - Exeter University

Subjects offered: Economics, Maths

Economics
Maths

“Top tutor from the renowned Russell university group, ready to help you improve your grades.”

MyTutor guarantee

You may also like...

Posts by Jessica

Explain why monopolies may be an undesirable form of market structure

Finding stationary points

When do I use a cosine rule over a sine rule?

Why have inequalities increased in recent years?

Other A Level Economics questions

Is price capping an effective way to deal with monopolistic power?

What is the best market structure?

What are the Macroeconomic Effects of Currency Fluctuations?

What effect would a fall in the interest rate have on GDP?

View A Level Economics tutors

Cookies:

We use cookies to improve our service. By continuing to use this website, we'll assume that you're OK with this. Dismiss

mtw:mercury1:status:ok