How does income inequality affect society

When wealth distribution becomes concentrated in a small number of hands, political power tends to become skewed in favor of that small wealthy group. High-income groups are able and incentivized to manipulate government in their favor through both legal processes and through corrupt practices. Impoverished or working class groups are simultaneously less able to become educated or participate in the political process as economic means become increasingly scarce.

Wealthy groups receive political advantages in several different ways. In democratic societies that lack public financing of campaigns such as the United States, political figures require private financial backing in order to run effective campaigns.

Federal candidates during the elections cycle spent around six billion dollars altogether. Political figures are required to court potential wealthy donors in order to fund successful campaigns. Politicians are likely to be reluctant to support policies that are not in the interests of their wealthy backers for fear of loosing vital financial support and subsequently the next election. Low-income groups are less able to influence elected officials.

Political interest and involvement is substantially depressed in economically unequal societies. According to one survey, individuals living in the most economically equal societies are four times more likely to be actively involved in politics and 2. Lower income groups tend to spend more time at work or securing basic needs. Consequently, they are less able to invest time or money to obtain political knowledge or participate in the political process. Additionally, economic inequality decreases participation by the poor because the poor are less able to influence outcomes.

Wealth concentration further concentrates political power by the increased ability of wealthy groups to corrupt political processes. Some government officials may be especially susceptible to bribes if the officials are subject to the increased economic pressures present in an economically unequal society.

Further, extremely wealthy community members are more able to afford to pay bribes in a relatively unequal economic state. Substantial empirical research reveal link education and poverty. Nations with a high degree of economic equality and a relatively small low-income population tend to have a substantially higher level of education.

One proposed causal connection between education and inequality is unequal societies tend to underinvest in education. Absent private or public scholarship programs, the poor are unable to afford to pay for education or spend the time in school that could have otherwise been spent working. Sweatshops in Bangladesh employ young children, which give destitute families much needed economic support. In unequal societies, government support tends to decline for public education programs.

As the rich become increasingly wealthy, public policies become increasingly favorable to the policy goals of the economic elites. The beneficial effect of increased GDP growth correlates with higher rates of inequality. From the perspective of the wealthy or liberal economic theorists, fairness is maximized in economically stratified societies that avoid redistributive policies.

However, the disadvantages of economic inequality are more numerous and arguably more significant than the benefits. Societies with pronounced economic inequality suffer from lower long-term GDP growth rates, higher crime rates, poorer public health, increased political inequality, and lower average education levels.

Congress Joint Economic Committee, 2 Sept. For Labour Studies, p. Kuklina; Margaret D. Carroll; Kate M. Finkelstein et al. Health last accessed Apr. Levine, Poverty and Obesity in the U.

Health Rep. The Benefits of Economic Inequality Inequality Drives Growth Rising levels of economic inequality often correlate with economic growth.

Inequality Increases Fairness Some argue a society with pronounced economic inequality is fairer than a society with a generally equal wealth distribution. Income inequality can be reduced directly by decreasing the incomes of the richest or by increasing the incomes of the poorest. Policies focusing on the latter include increasing employment or wages and transferring income. Inequality is bad for society as it goes along with weaker social bonds between people, which in turn makes health and social problems more likely.

Economic prosperity goes along with stronger social bonds in society and thereby makes health and social problem less likely. Inequality is necessary to encourage entrepreneurs to take risks and set up a new business. Without the prospect of substantial rewards, there would be little incentive to take risks and invest in new business opportunities.

Inequality affects how you see those around you and your level of happiness. People in less equal societies are less likely to trust each other, less likely to engage in social or civic participation, and less likely to say they're happy. Sign up to keep in touch with The Equality Trust — including a monthly round-up of inequality news, campaign emails and information about how you can support us, including occasional fundraising emails.

We would appreciate you telling us where you are in the UK so we can tailor information about local group activity to your area. You are here Home Impacts Impacts How does inequality affect the individual, society and the economy?

Unequal societies have less social mobility and lower scores in maths, reading and science.