Income Inequality and Social Challenges

The assignment analyzes the growing problem of income inequality in modern society. It delves into the various factors contributing to this disparity, such as technological advancements, globalization, and policy decisions. The analysis highlights the negative consequences of income inequality, including its impact on social mobility, political stability, and individuals' access to basic necessities. The report concludes by emphasizing the need for governments to address income inequality through effective policies and programs.

INTRODUCTION TO
SOCIAL SCIENCES

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Contents
INTRODUCTION.....................................................................................................................................2
Income inequality as a social issue....................................................................................................2
Causes of income inequality..............................................................................................................3
Income Inequality effects on political stability..................................................................................4
Conclusion.............................................................................................................................................5
REFERENCES......................................................................................................................................5
INTRODUCTION
In modern times, gap between economic condition of rich and poor is widening every
day. Rich are getting richer while poor are getting poorer. Report of IMF suggested that 99%

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of the wealth of the world is concentrated in the hand of only 1 % people of the total global
population (Corak, 2013). This is enough to illustrate the income inequality that persists in
the society. With the decline of communist ideology all around the world income equality has
become one of the major issues in the society. It is the cause of many other social issues
which can be harmful for the society. This can be dangerous for maintaining harmony of the
society. It is one of the major factors on which political stability of the nation also depends.
This report highlights the theories from the discipline of sociology that accounts to income
inequality. It also showcases the ways in which income inequality is affecting political
stability of the nation.
Income inequality as a social issue
From a very long time income inequality is a social issue in the society and has
become one of the major concerns for any nation irrespective of whether they are developed
or developing. The development of income inequality in the society is not new; it has been in
the society from thousands of years. But it has stretched its root deeper in the society from the
start of age of industrialisation. In the early 1980’s and 1990’s it was seen in most part of the
world that there was enormous amount of transfer of wealth from poor or middle class to the
rich section of the society (Milanovic, 2013). This made rich more rich and gave them control
on most of the resource present in any nation. On the other hand poor became poorer who are
unable to even fulfil basic life amenities. This increased the gap between different sections of
the society and has become a challenge for the nation to maintain the life standards of
everyone (Reardon & Bischoff, 2011). Most of the issues came into existence due to the
larger part of the market being captured by the business of larger firm which gave them
enormous wealth.
The people that are having larger amount of resources are earning more and the people who
are working for them are having lower amount of income (Bernie, 2018). In between the two
lies the middle class whose income didn’t rise as much as inflation in the market did. This not
only increased the income gap in the society but also raised the issue of living standard
lifestyle. There were many ill practices that came with such kind of gaps.
There are many other kind of social issues that got developed due to income inequality. It is
depleting harmony of the society as most of the people felt themselves as superior or inferior
from others. It has reduced the trust of the people on each other. Other than this due to rising
inflation many people have gone under poverty line which reduces their chances to avail

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basic amenities of life especially health related issues (Kawachi & Subramanian, 2014). Even
the human beings are getting sold for some earning a very little amount of money. Income
inequality increased the rate of crimes in the society especially theft and burglary became
common (Brunori, Ferreira & Peragine, 2013). There was shift in the category of people who
can avail quality education as only the rich are getting good graduate degrees from the better
college and the poor are unable to afford even basic education. This condition is worse in the
nation that is having less per capita income such as South Asian Countries.
Causes of income inequality
Income inequality has become one of the major problems of the society (Dabla-Norris,
Kochhar, Suphaphiphat, Ricka & Tsounta, 2015). In the past there were very few reasons that
were responsible for this, but in the modern times the cause of income inequality is wide
ranged. There are several causes for this which is as follows:
 Wage determination by labour market: The pay that a person is getting is largely
depending on the demand and supply of the market. Since there are larger numbers of
people who are willing to work at lower salaries hence this has created the
competition and ultimately their overall income has reduced considerably. This is
ultimately benefiting the income of employers as they are getting workers at lower
cost and hence the income gap widens.
 Education affecting wages: Since the poor people do not have access to higher and
quality education and are generally restricted to just basic education. This is the age
where most of the people are getting salaries according to the educational
qualification they have hence this has enhanced Income inequality more.
 Growth in technology: Due to the growth in the technology there is huge amount of
job cuts this has reduced the power of workers to demand for more pays (Chand,
2018). Machines perform better than human being which has reduced the amount of
salary they were getting by the employers as their importance in the firm has reduced.
With the further development of artificial intelligence this problem will get deeper.
Since the machines are able to produce the products at lower cost hence the income of
employers are getting higher. This is one of the major reasons for widening of income
gap between rich and poor.
 Population explosion: There is a large population explosion that can be noticed in an
around the world. This has raised the number of worker which is ultimately raising

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the competition in the market and hence people are ready to work on lower wages
which is ultimately increasing the income gap within the society.
 Globalisation: This is another theory in sociology that is considered to one of the
primary reasons of income inequality. This is due to the fact that there is larger
numbers of people that comes from the market and are demanding for less salary
(Oishi, Kesebir & Diener, 2011). This further reduces the chances of local people to
have good pays from the employers. Companies also move towards the areas where
there is availability of cheap labourers.
Two major scientific theories in this regards are as follows:
 Conflict theory: This theory suggests that in world most of the people are striving for
limited resources and has a competition among them. An idea that larger population
creates larger competition for the limited resources which reduces individual’s power
of coming to the market. This creates the trust issues in the two sections of the market.
 Marxist theory: This theory advocates about giving equal pay to each and every
individual and hence reducing the economical gap between the rich and the poor. This
theory suggests that if gap exist between the different sections of the society is not
wide then it will be possible for everyone to avail basic amenities for living their life.
Income Inequality effects on political stability
Income inequality is produced due to various reasons and has its effect on various
dimensions of the nation (Silber, 2012). Political instability of the country is also affected by
the income inequality. Income has been one of the major issues in the elections of
government all around the world. This is the reason that in most of the countries government
sets minimum wages for the person who is employed under any registered organisation. This
helps in maintaining minimum life standards of the people. In recent years it has been seen
that governments have been criticised for not maintaining the economic balance in the society
(Jaumotte, Lall & Papageorgiou, 2013). In the countries that has adopted democracy or are
following Marxist principle faces larger political instabilities if they fail to reduce the gap
between rich and poor. There are many political parties around the world that has this issue in
their manifestos and are working for the welfare of the labours especially the lower waged
workers. Since the individuals who have less salaries are unable to avail basic amenities like
health and education hence it becomes duty of the government to provide it to them. Failing
to provide these facilities can lead to political turmoil within the nation.

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One way in which income inequality can raise political instability of the country can be
understood by the fact that if the government fails to provide the basic facility to the people
that are having low wages then they will have to face stiff competition from the people
(Meyer & Sullivan, 2013). Every year inflation increases due to various reasons and every
year the numbers of people that are under the poverty line also increases hence it is a
challenge for every government to see to it. More the people will starve for having basic
facilities for life more will be the chances that political stability of the nation gets affected.
Conclusion
From the above part of the report it can be concluded that income inequality has
become a major issue in the modern day society. This has raised many other social issues as
the gap between the two rich and poor are widening day by day. Due to income inequality
there is effect on the political stability of the nation as many of the parties fights their election
promising to minimise it. More the income inequality more is the chances that people faces
problem in living their life.
REFERENCES
Bernie, 2018. [Online]. Available at: https://berniesanders.com/issues/income-and-wealth-
inequality/. [Accessed on: 30th January 2018].
Brunori, P., Ferreira, F. H., & Peragine, V. (2013). Inequality of opportunity, income
inequality, and economic mobility: Some international comparisons. In Getting
development right (pp. 85-115). Palgrave Macmillan, New York.

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Chand, S. 2018. [Online]. Available at: http://www.yourarticlelibrary.com/economics/what-
are-the-important-causes-of-income-inequalities-in-india/3041. [Accessed on: 30th
January 2018].
Corak, M. (2013). Income inequality, equality of opportunity, and intergenerational
mobility. Journal of Economic Perspectives, 27(3), 79-102.
Dabla-Norris, M. E., Kochhar, M. K., Suphaphiphat, M. N., Ricka, M. F., & Tsounta, E.
(2015). Causes and consequences of income inequality: A global perspective.
International Monetary Fund.
Jaumotte, F., Lall, S., & Papageorgiou, C. (2013). Rising income inequality: technology, or
trade and financial globalization?. IMF Economic Review, 61(2), 271-309.
Kawachi, I., & Subramanian, S. V. (2014). Income inequality. Social epidemiology, 126.
Meyer, B. D., & Sullivan, J. X. (2013). Consumption and income inequality and the great
recession. American Economic Review, 103(3), 178-83.
Milanovic, B. (2013). Global income inequality in numbers: In history and now. Global
policy, 4(2), 198-208.
Oishi, S., Kesebir, S., & Diener, E. (2011). Income inequality and happiness. Psychological
science, 22(9), 1095-1100.
Reardon, S. F., & Bischoff, K. (2011). Income inequality and income segregation. American
Journal of Sociology, 116(4), 1092-1153.
Silber, J. (Ed.). (2012). Handbook of income inequality measurement (Vol. 71). Springer
Science & Business Media.