Question

- Do you think income inequality, or wealth inequality, is an important issue that needs to be addressed? Why?

- Discuss some ways in which a normal person can benefit from inequality (income inequality / wealth inequality)?

Answer 1

Yes,income inequality is an important issue that needs to be addressed.Because it include higher rates of health and social problems, and lower rates of social goods,a lower population-wide satisfaction and happiness and even a lower level of economic growth when human capital is neglected for high-end consumption.The most plausible explanation for income inequality's apparent effect on health and social problems is 'status anxiety'. In the context of growth it is both good and bad. We can see a rising gap between the rich and the rest of the world. There are many ways in which it is caused :

Technology has altered the nature of work: which means the middle skill jobs are eliminated due to the new technology.That has contributed to downward pressure and wage pressure and economic insecurity for the less educated. Then  Globalization :which encourages the imports which reduces the job for people in textile,furniture,leather etc. The rising of BRAND names are bringing social inequality which is due to income inequality.

Now some ways in which a normal person can benefit from inequality .Economists have long been interested in the idea that a country’s level of development might help determine its level of inequality.Perhaps the most obvious way in which inequality drives growth is that it allows for entrepreneurs – like Apple’s Steve Jobs or HTC’s Cher Wang – to enjoy the rewards of their risk-taking.If some people gain extra income, then this can ‘trickle down’ to other people, e.g. if an entrepreneur sets up a business he may become a millionaire, but also will create jobs and provide incomes for other workers. There may be a gap between the highest and lowest earners. But, the lowest earners are still better off than without the entrepreneur. This is called trickle down effect.Fairness. It can be argued that people deserve to keep higher incomes if their skills merit it. If a top footballer gets paid £100,000 a week, this is a reflection that people are willing to pay that kind of money to watch him.