Question

Explain some of the causes of increased wage inequality.

Answer 1

Some of the causes of increased wage inequality are:

1) Lack of skill development training: Lack of such training does not enhance the knowledge and skill of labor which results in lower wages of some people. On the other hand, skilled and well-trained workers earn a higher level of income.

2) Lack of technological development in an industry leads to lower productive capacity in an industry and that results in lower wages in that industry. While other industries that invest in improved technology are able to enhance their production levels and are able to pay higher wages to their workers

3) Lack of education to the poor: Due to lack of education to some sections of the society, poor becomes poorer and rick keep becoming richer (as rich people have access to all the opportunities to earn big)

4) When demand for a particular job is much greater than the supply for it, it results in higher wages for that particular work. On the other hand, when the supply for a particular job is much higher than the demand for it, it results in lower wages for that particular job. This also causes wage inequality.

5) Gender plays a great role in increasing wage inequality among the population of a country. There is a trend in the market to pay lower wgaes to women as compared to men for the same amount of work done. There has always been wage inequality among the two genders.