Are We Affected By Income Inequality?
Income inequality within countries is getting worse each year. Currently, 71% of the world’s population lives in countries where inequality is constantly rising. The pandemic has also been a catalyst in worsening this income inequality within countries.
So, what is income inequality, and what is its impact? Let us find out.
The Basics Of Income Inequality
Income inequality is the uneven distribution of income throughout a population. There is a high disparity between classes. As a result, a massive chunk of the population will be worse off.
It is up to the country’s government to ensure that this disparity does not increase. That is because high levels of income inequality in a country lead to many problems.
The Problems Of Income Inequality
Here are some of the top problems that countries with high levels of income inequality experience:
1. Halts Economic Growth
A low level of income inequality is not a bad thing. However, income inequality affects long-term growth rates negatively. That is because a country with income inequality experiences a high poverty level.
Because of poverty, there is a rise in:
- Poor health
- Food prices
- And much more
Wealthy citizens also enjoy high political and economic power compared to lower-class citizens. However, physical capital also becomes increasingly scarce as people don’t have funds to invest in education and training.
2. Decrease In Health
Income inequality will always leave many people worse off. As a result, these people will experience high rates of illnesses.
But, on the other hand, their access to healthy food and quality health care will also be unavailable. Because of this, the poverty gap will deepen even further.
In such nations, food deserts also occur when there is a lack of accessible healthy, and affordable food. Even industrialized Western countries such as the United Kingdom can go through a food desert. These issues will lead to the deterioration of the quality of health.
3. Increase In Crime Rates
Because of income inequality, there will be a disadvantaged group in society. Such a group will suffer from hostility and resentment because of their economic position. So, they will resort to illegal methods of obtaining money and resources.
The vast income gap also reduces law enforcement spending in low-income regions. As a result, crime rates will prevail while the wealthy class will remain protected.
Final Verdict: Are We Affected By Income Inequality?
Unfortunately, we are, and rising inequality is a global cause for concern. That is because COVID-19 has also accelerated the growth of inequality even further.
The vulnerable and poor communities have been hit the hardest because of the pandemic, as there are high levels of unemployment and a decrease in income. Individuals and businesses must do their part in reducing the gap and curbing the problems that come with it and global organizations such as the United Nations are doing their part in trying to reduce income inequalities within and among countries. However, such measures will take time to bear fruit as we live in uncertain times.
For Asdra, being a part of the change and improving low-income communities is our goal. Asdra’s innovative solutions combine modern technology with traditional banking practices, reduce administrative burdens and fees, and maximize access regardless of distance. With the launch of Asdra, a unique opportunity has arisen to help those in need achieve economic stability and eliminate inequality.