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“WHY DOES INCOME INEQUALITY EXIST?”

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4. Why does income inequality exist?

Income inequality, also known as economic inequality or wealth and income differences typically refers to inequality among individuals and society, but it can also refer to disparity among countries. There are many reasons for this phenomenon to happen within the societies, most of them are often inter-related. However, we could say that the most important factor that causes greater income inequalities are wages and salaries. The determination of wages by the market is a major cause of economic inequality. Wages work in the same way as price and by applying the law of supply and demand, the wage is determined by the …show more content…

Race, culture and religion could also be an ingredient in the income differences. Some encourage wealth-acquiring behavior, some do not. Some provide basis of discrimination and racism proven by the fact that in some countries, people who belong to a certain ethnic and racial minorities are more likely to be poor. There’s also a gender income gap which favors males in the labor market. There are more than discrimination for this gap to happen, there are reasons like female considers not only the pay but also the circumstances when at work. Men are more likely to accept an adventure-packed job, they are risk takers and are more willing to travel and relocate when the job calls for it. Women are less willing and do not take the job due to marriage or pregnancy. Males are more engaged in dangerous occupation which usually pays up more than ordinary job. And prior to the previous paragraph, risk taking is also a factor in the economic inequalities. Individuals do not all have the courage to take up job which are risky; they are not all alike, willing to take a step forward or backward in a whim. It can be consider reckless at times but it was said that risk takers do well and rise to the top of the income distribution, some falls to the bottom though. Those who prefer playing safe are said not to be likely to