Income inequality is a problem that plagues every society in the world. Today we will look at the factors that contribute to that problem and examine why certain people are not fairly compensated for their contribution to the society.
The underlying factor that will serve to explain the inequality will be environment. Most individuals will agree that the education that a child receives equips him with the skills that he will require upon entering the working industry and largely determines the success rate of his future endeavours. What will be examined now however is not simply the level or type of education that that child receives but rather the educational unit that he is enrolled in. The different environments that children are exposed to play a major role in their development, for instance a child from a wealthier family will be enrolled in a ‘better’ school and will be in contact with other children of similar financial background and hence will form a mindset similar to the children like him. He will have expectations of what he deserves, in the aspects of material good, education etc and most importantly, this forms a barrier for children not as fortunate as him from entering his ‘circle’. This barrier follows the child through his life and eventually influences his decisions on his employment candidates. Hence, it is relatively safe to conclude that the wealthier child will grow up to a financially secure future while the future of the other child remains to be seen even if both possessed the same IQ level and are equally hardworking in school.
Another factor that contributes to the income inequality will be race and ethnic group. The best country to illustrate this problem will be the United States of America, the nation with the greatest inequality gap between the wealthy and the poor. The average income of a typical white American with a masters degree is $71 184, an Asian $61 452, a Hispanic $50 901 and a Black $47 407. (http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States) It is apparent here that individuals of different races contributing equally to the society are being rewarded unequally and unfairly. The income disparity narrows down to racial discrimination. In the past, the Black Americans were sold as slaves to the White Americans. This continued for decades and till today, though equality among the races is no longer a foreign idea, discrimination due to difference in skin colour is common. The mindset of these Americans can be blamed for this. From decades earlier, those different from the White Americans have been viewed as of lower class and not deserving of equality. This mindset is passed on through generations and while not as extreme as before, it definitely still exists. When these people seek to be employed in a particular company, they might not be compensated the salary that they deserve. This especially applies to the Black Americans possessing the same level of education as their counterparts.
Lastly, we will have to look at the information available to the public. More often than not, it is impossible to make proper conclusions to an observational study when the figure is too insignificant as compared to the population. State figures are not readily available due to the above mentioned reason and only national figures are conclusive. This makes it impossible to single out the states that are more affected by poverty and to look at the factors contributing to the income inequality. We must realise that it is not uncommon for figures to be misleading and hence have to look closely at the national figured that have been disclosed. Another example will be household income figures that are released as well. The income difference can be influenced by the number of income earners in the family and the occupational industry that the income earner belongs to. Larger families tend to have a lower average income as the total income earned are divided over a greater number of people. Hence, a family with higher household income will not necessarily have a higher standard of living. Several factors like standard of living, individual income, household income will have to be looked at before the conclusion of income inequality is made.
Solving the problem of income inequality is a complicated process that needs careful handling. Even with help being offered from foreign parties, corruption exists and it is unclear that how much of the contribution is actually being delivered to those in need. Factors must be identified carefully so that that area can be targeted and hopefully solved.
