Table of Contents
Caring responsibilities- wealth inequality
One cause of wealth inequality is caring responsibilities. If someone has a sick, elderly or disabled relative to care for, or if someone has children, this may mean they are unable to work, or have to cut down to work part time in order to be home to care for someone. Private childcare in the UK is very expensive, nursery is typically around £50 per day and after school care is around £15 per day, meaning that those in lower paid jobs are unable to afford this and therefore cannot work or can only work part time.
Families with someone who works part time has a poverty rate of 30% compared to families where at least one person works full time with 10% poverty rate. This shows that caring responsibilities are a significant cause of inequality as those who have responsibilities are often forced to reduce their income, pushing them into poverty.
However, the Scottish government has tried to address this issue of wealth inequality by increasing the number of free funded hours of childcare parents can claim. All children ages 3 and 4 are now entitled to 1140 hours per year. This reduces the burden on parents or allows parents to increase the hours they work, or return to work, though children under 3 are not covered.
Though the Scot Gov has tried to help the policy does not go far enough because it starts aged 3 therefore parents with young children who cannot afford full time childcare still have to restrict their hours or completely give up work, putting them at risk of being in poverty and increasing wealth inequality between them and wealthier families.
Disability- wealth inequality
Another cause of wealth inequality is disability’s. Having a disability can mean that someone is unable to work and therefore has to rely on benefits. This is particularly true for people who struggle witha mental disability.
People with a physical disability may have to spend money on specialist equipment to help them go around their everyday life or food, they are also more likely to spend money on petrol and fuel due to mobility issues. Finally, even if someone is able to work they may face discrimination and end up unemployed or in a lower paying job.
In 2020 people with a disability were twice as likely to be unemployed. This shows that there is a significant inequality between the income of people with and without a disability. People with a disability are far more likely to be in poverty due to reliance on living costs.
However the Scottish government offers financial support to those with disabilities in the form of the Scottish adult disability payment. There are 2 parts to this payment: one is for daily living and the other is for mobility. People may qualify for one or both. For example, the standard amount for daily living payment is £62 per week.
This is a vital income for those who are unable to work or have extra costs due to their disability, however this does not rise in line with inflation which means people may struggle to keep up with the cost of living. Overall, disability is undoubtedly a key cause of income inequality. Those with a disability are often unable to meet their financial needs for a variety of reasons and government support is not enough resulting in high levels of unemployment.
Education- wealth inequality
Another cause of wealth inequality is lack of qualifications. In general, having a higher level education tends to enable peoples ability to enter higher paying jobs, however, those with low level education tends to enable people to enter higher paid jobs, however those with low level education are often in low pay jobs.
Unfortunately escaping poverty can tend to be very difficult for families because children from low income families tend to do less well in education, so the cycle continues. In 2019 the poverty rate for people with a degree was 1 in 10 but for people without was 1 in 4. This example shows the role that education pays in allowing people to have a decent standard of living.
However, to try tackle the link between lack of education and wealth inequality, the Scottish government continues not to charge uni tuition fees to Scottish students and have a number of initiatives to encourage poorer pupils to attend university.
In England, students can pay up to £9,000 per year for courses which would be very difficult for low income families. By making it easier to go to University, the government hopes to break the cycle of poverty, though evidence shows there are still far fewer from deprived backgrounds in the UK suggesting there are other barriers.
Overall, lack of qualifications is a main cause of income inequality as it can stop people accessing well paid jobs meaning that they are trapped in the poverty cycle.
low pay work and unstable jobs- wealth inequality
A final cause of wealth inequality is low paid or unstable jobs. Over the past few years, many employers have staff on zero hour contracts which means that they do not earn the same amount each month, cannot budget and sometimes do not earn enough to meet their needs. Nowadays, struggling because the work is low paid and their income is far below the rate of inflation, which is pushing them into poverty.
For example, the average wage rise in 2022 was 4.7% whilst inflation is currently at 10% and could rise to16% by the end of next year. People who are already on low wages or zero hour contracts will be more affected by rising costs than those in well paid jobs, and therefore low pay is a cause of income inequality.
However, to tackle the issue of low pay, the UK government increases the rate of the national minimum wage each year. This is the minimum amount people have to be paid and is based on what the government estimates people need to have to be paid and is based on what the government estimates people need to have a decent standard of living.
For example, in 2023, the rate was £10.42 for over 23 year olds. However, despite the law 60% of those who are in poverty are working which shows the NMW is not enough.
Overall, low pay is a major cause of poverty. Work should be a route of poverty however low paid work and unstable jobs mean it is not, leaving many people feeling hopeless.
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