Social Inequality (Социальное неравенство).

Vocabulary:

disparity - неравенство; несоответствие; несоразмерность (between, in)
outcome - результат, исход
obscure - затемнять, затенять
cohesion - единство, спаянность, сплочённость
innate - врождённый, природный, прирождённый
CEO = Chief Executive Officer 1) исполнительный, генеральный директор, директор-распорядитель, директор
mitigate - 1) смягчать, уменьшать (строгость, суровость; наказание) 2) умерять, сдерживать (жар, пыл) 3) облегчать (боль, страдание)
constrain - сдерживать,
disposable income - располагаемый доход (остаётся после уплаты налогов, взносов в систему страхования и др. вычетов)

Economic inequality refers to disparities in the distribution of economic assets and income. The term typically refers to inequality among individuals and groups within a society, but can also refer to inequality among nations. There is debate as to what equality should mean. Some think in terms of Equality of opportunity and others in terms of Equality of outcome.

Economic inequality has always existed; its nature, cause and importance are open to broad debate. A country's economic structure or system (such as capitalism, socialism and everything in between), ongoing or past wars, and individuals' different abilities to create wealth are all involved in the creation of economic inequality.

Economic inequality among different individuals or social groups is best measured within a single country. This is due to the fact that country-specific factors tend to obscure inter-country comparisons of individuals' incomes. A single nation will have more or less inequality depending on the social and economic structure of that country.

Causes of Inequality There are many reasons for economic inequality within societies. These causes are often inter-related and complex. For example, race differences and wealth condensation are different causes but can be highly correlated within a population. The relationship between cause and effect can also be non-linear and complex. For example, economic inequality decreases the amount of social cohesion within society, leading to greater inequality. Among the acknowledged factors that impact economic inequality in some part are the labour market, innate ability, education, race, gender, culture, wealth condensation etc.

The Labour Market One of the major reasons there is economic inequality within modern market economies is because wages are determined by a market, and are hence influenced by supply and demand. In this view, inequality is caused by the differences in the supply and demand for different types of work.

A job where there are many willing workers (high supply) but only a small number of positions (low demand) will result in a low wage for that job. This is because competition between workers drives down the wage. An example of this would be low-skill jobs such as dish-washing or customer service. Competition amongst workers tend to drive down the wage since if any one worker demands a higher wage the employer can simply hire another employee at an equally low wage.

A job where there are few willing workers (low supply) but a large demand for the skills these workers have will results in high wages for that job. This is because competition between employers will drive up the wage. An example of this would be high-skill jobs such as engineers or capable CEOs. Competition amongst employers tend to drive up wages since if any one employer demands a low wage, the worker can simply quit and easily find a new job at a higher wage.

While the above examples tend to identify skill with high demand and wages, this is not necessarily the case. For example, highly skilled computer programmers in western countries have seen their wages suppressed by competition from equally skilled workers in India who are willing to accept a lower wage.

Innate ability Many people believe that there is a connection between differences in innate ability, such as intelligence, strength, or charisma, and between an individuals level of wealth. Relating these innate abilities back to the labour market suggests that such innate abilities are in high demand relative to their supply and hence play a large role in increasing the wage of those who have them. Contrary wise, such innate abilities might also affect an individual’s ability to operate within society in general, regardless of the labour market. Various studies conducted on the correlation between IQ scores and wealth/income show that it is fairly difficult to come towards an objective conclusion on whether or not there is a relationship between intelligence and wealth/income.

Education One important factor in the creation of inequality is the variable ability of individuals to get an education. Education, especially education in an area where there is a high demand for workers, creates high wages for those with this education. Contrary wise, those who are unable to afford an education generally receive much lower wages. Many economists believe that a major reason the world has experienced increasing levels of inequality since the 1980s is because of an increase in the demand for highly skilled workers in high-tech industries. They believe that this has resulted in an increase in wages for those with an education, but has not increased the wages of those without an education, leading to greater inequality.

Gender, Race, and Culture The existence of different genders, races and cultures within a society is also thought to contribute to economic inequality. The idea of the gender gap tries to explain the reasons there are different levels of income for different genders. Culture and religion are thought to play a role in creating inequality by either encouraging or discouraging wealth-acquiring behavior and providing a basis for discrimination. It is felt that in many countries individuals belonging to certain racial and ethnic minorities are found more often among the poor than others.

Development patterns Simon Kuznets argued that levels of economic inequality are in large part the result of stages of development. Kuznets saw a curve-like relationship between level of income and inequality. This relationship is now known as Kuznets curve. Supposedly, countries with low levels of development have relatively equal distributions of wealth. As a country develops, it acquires more capital, which leads to the owners of this capital having more wealth and income and introducing inequality. Eventually, through a variety of possible redistribution mechanisms such as social welfare programs, more developed countries move back to lower levels of inequality.

Wealth Condensation Wealth condensation is a theoretical process by which, in certain conditions, newly-created wealth tends to become concentrated in the possession of already-wealthy individuals or entities. This is reflected in the common saying 'the rich get richer and the poor get poorer'. According to this theory, those who already hold wealth have the means to invest in new sources of creating or accumulation of wealth, thus are the beneficiaries of the new wealth.

As an example of wealth condensation, truck drivers who own their own trucks consistently make more money than those who do not since the owner of a truck can escape the rent charged to drivers by owners (Even taking into account maintenance and other costs). Hence, a truck driver who has wealth to begin with can afford to buy his own truck in order to make more money. A truck driver who does not own his own truck makes a lesser wage and is therefore unable to buy his own truck to increase his income.

Related to wealth condensation are the effects of inter generational inequality. It has been noted that the rich tend to provide their offspring with a better education, increasing their chances of achieving a high amount of income. Furthermore, the wealthy often leave their offspring with a substantial inheritance, jump starting the process of wealth condensation for the next generation.

Mitigating Factors There are many factors that tend to constrain the amount of economic inequality within society. Progressive taxation, where the rich are taxed more than poor, is effective at reducing the amount of income inequality in society. The Nationalization or subsidization of essential goods and services such as food, healthcare, education, and housing is also thought to reduce the amount of inequality in society. By providing goods and services that everyone needs for cheap or free, governments can effectively increase the disposable income of the poorer members of society.

Effects of Inequality: Social Cohesion Research has shown a clear link between income inequality and social cohesion. In more equal societies, people are much more likely to trust each other, measures of social capital suggest greater community involvement, and homicide rates are lower. There is a very strong correlation between socioeconomic status and health. This correlation suggests that it is not only the poor who tend to be sick when everyone else is healthy, but that there is a continual gradient, from the top to the bottom of the socioeconomic ladder, relating status to health. Lower socioeconomic status has been linked to chronic stress, heart disease, ulcers, diabetes, certain types of cancer, and premature aging.

The concept of psychosocial stress attempts to explain how psychosocial phenomenon such as status and social stratification can lead to the many diseases. Higher levels of economic inequality tend to intensify social hierarchies and generally degrades the quality of social relations - leading to greater levels of stress and stress related diseases.

Economic Incentives Many people accept inequality as a given, and argue that the prospect of greater material wealth provides incentives for competition and innovation within an economy. Some modern economic theories have suggested that a functioning economy requires a certain level of unemployment. These theories argue that unemployment benefits must be below the wage level to provide an incentive to work. Several recent economists have investigated the relationship between inequality and economic growth arguing that inequality reduces growth in poor countries and helps growth in rich ones.

Views on Inequality In most western democracies, the desire to eliminate or reduce economic inequality is generally associated with the political left. The main practical argument in favor of reduction is the idea that economic inequality reduces social cohesion and increases social unrest, thereby weakening the society. There is evidence that this is true and it is intuitively true, at least for small face-to-face groups of people. Also, there is the argument that economic inequality translates to political inequality, which further aggravates the problem.

The acceptance of economic inequality is generally associated with the political right or at least that section of the right that is concerned with economics. The main practical argument in favor of the acceptance of economic inequality is that, as long as the cause is mainly due to differences in behavior, the inequality serves as an economic engine to push the society towards economically healthy and efficient behavior, and is therefore beneficial.