Pros and Cons of Economic Inequality

Economic inequality is the unequal distribution of income and opportunity between different groups in society. Types of economic inequality are measured using the distribution of income and wealth.

Economic inequality is of two types which include: income and wealth. Income inequality looks into how big the difference is between what people get paid. All the earnings people make from their businesses is the income they get.

Pros and Cons of Economic Inequality

Pros of Economic Inequality

  1. Fairness

It can be argued that if people have a lot of skills then they need to be at a higher rank compared to those that do not have the skills hence economic inequality is good as it favors those that have the skills to be superior. This makes them proud of their skills as they paid for them to acquire the skills.

  1. The trickledown effect

Some people have to be at higher ranks so that they may create job opportunities for those at lower ranks. If an entrepreneur has a business and succeeds in the expansion of the business, then he or she may need people to assist him or her in the running of the business hence creating job opportunities for people.

  1. Rewards to entrepreneurs

Inequality encourages entrepreneurs to set up business as they have the ability to do so and this makes them take risks which will, in turn, serve as economic growth to the country.

  1. It serves as the results of hard work

If someone works harder, he or she deserves to receive the rewards of the hard work as compared to those who do not work hard and this is achieved by having economic inequality.

  1. Promotes growth

When there is economic inequality, there will be growth in that person who earns higher will be able to create employment opportunities to those who are not employed hence improving their living standards and this will serve as growth in the country.

  1. Enhances utilization of skills

When there is inequality, there will be the utilization of skills in that people will have knowledge and skills in different fields which will enhance improvement in all aspects of life.

Cons of Economic Inequality

  1. Inherited wealth

Those people who come from well-up families will be able to inherit wealth from their parents whereas those that do not come from well-up families will struggle with life even though they may have the right skills to rise to higher positions.

  1. Unemployment

When there is inequality, the rate of unemployment will be high as the people who do not qualify will not be able to have a chance to work anywhere.

  1. Social problems

Inequality will result in social problems such as crime as those who are not employed will tend to be very idle and need the essentials in life hence they will result in stealing for them to get the essentials.

  1. There will be a monopoly

As there will be few businesses operating then they will end up setting higher prices on the commodities they sell infringing the rights of the consumers.

  1. Low growth rate

There will be a low growth rate in the country as many people will not be in a position to create employment opportunities and yet the ones that will be there will not be enough for everyone hence low growth rate in the country at large.

  1. Poor public health

The health will be poor in that people will suffer from simple diseases because of the living conditions and this may make them not to progress at all.

  1. Lower education levels

Those who are financially able will have the opportunity of getting higher education but those who are not able will only get the minimum education hence there will be many people with lower education levels.

Summary

Economic inequality is not a good thing in the country as it comes with a lot of problems making the country not to improve their economic status.

 

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