Causes of Inequalities

Income and wealth inequalities are also explained by:

  • changes in employment
  • government policy
  • taxation

Changes in employment

Two men entering a jobcentre plus

One major cause of income inequalities is the ability to access well paid employment. With the onset of the 2008 economic recession, unemployment in the UK jumped from 1.61 million to 2.68 million by October 2011. With fewer people in work and many more people dependent on benefits, inequality widened.

Since 2011, the UK economy has returned to growth. At the start of 2018, the unemployment figure stood at 1.4 million. However, there has been a rise in part-time employment where, historically, rates of pay are lower. (Source: Office for National Statistics).

For many workers the economic situation has resulted in a 'wage freeze' or lower-than-inflation wage rises. This is particularly true of public service workers. For many, the years during and after the recession have seen a relative fall in their standard of living.

As society has become wealthier overall those in top managerial or professional employment have seen their income rise at a much faster rate than the poorest groups.

For example, the ONS reported in 2011 that during the previous 25 years the top 10 per cent had seen their wage rise by 81 per cent in real terms. This compares to the bottom 10 per cent which had only seen a 47 per cent increase in real terms.