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Cause Of Income Inequality Essay

729 Words3 Pages

First, the cause of Income Inequality is Global trend changed. Over the past forty years, the costs of transportation has reduced by because of improvement of technology, automation, and communication dramatically. New markets have opened, bringing growth opportunities in countries rich and poor alike, and hundreds of millions of people have been categories out from poverty. However, inequality has also risen. So, this has showed that the globalization has play a very important role in affecting the income inequality in this global.
Next, Technological changes rapidly and categories between labour. Due to the rapid growth of technology, the distance of income inequalities become far and far. New information technology has led to improvements in productivity and well-being by leaps and bounds, but has …show more content…

A labour market is the place where workers and employees interact with each other. In this market, labour demand is the firm 's demand for labour and supply is the worker 's supply of labour. The changes of bargaining power can the demand and supply of labour. The more flexible labour market institutions can faster foster economic dynamism by reallocating resources to more productive firms and enabling firm restructuring. However, greater flexibility can put forward challenges for workers, especially those with low skills, and hence play an important role in explaining inequality developments (Alvadero and others 2013). A decline in trade union membership (union rate) could reduce the relative bargaining power of labour, exacerbating wage inequality (Frederiksen and Poulsen 2010; Wilkinson and Pickett 2010 ;Jaumotte and Osorio-Buitron ,2015) and forthcoming International Monetary Fund (IMF) work finds that a reduction in the minimum wage relative to the median wage is associated with higher inequality in advanced economies, while a decline in unionization rate is strongly associated with the rise of top income

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