As long as a few wealthier countries have the power to set the rules to their own advantage, inequality will continue to worsen. The debt system, structural adjustment, free trade agreements, tax evasion, and power asymmetries in the World Bank, the IMF, and the WTO are all major reasons that inequality is getting worse instead of
The unemployment rate increased because of neoliberalism. In neoliberalism, unemployment will target any person with less working ability which might cause hatred. Also, it caused a widening inequality of both wealth and income in Latin America. Skilled workers have an opportunity to get higher wages; on the other hand, low-skilled workers can only get low wages. Neoliberalism causes a limit to wage
And inequality is discriminating a person in all spheres of life which gives a rise to sense of deprivation. Again the responsibility shifts to the government, if a government is economically instable then it is hard for it to make and implement policies which will benefit the people. By far the biggest factor responsible for poverty after government’s policy is the problem of unemployment. Unemployment further worsens the living style of the people and they become economically deprived due to which they are unable to cope with the advancing living standards. Access to quality education also causes poverty because without education any person in the world cannot gain access to a good job and that a person has to work on low
Although it is still crucial to point out, that markets are still developing, and as the product demand keeps rising, the production has been moved to developing countries, where exploitation is the main reason behind terrible living and working conditions, and often child labour. Furthermore, even if living conditions have improved in developed countries, this uneven distribution of power is still present and resulting in social inequality, as for example regarding education, even though more students from lower and middle classes are more likely to get a higher education today than just half a century ago. By looking at the subdivision of students in universities in the U.S., for example economic resources are often the reason behind why students from working-class families are lesser than students from higher-class families. Financial resources play a crucial role: in the U.S. students will usually have to take big loans in order to attend their studies, but these loans are usually difficult to pay back, once that students are done with their education. It often takes several years to pay them back.
First, it is harmful to the society due to the reason that if raw materials of a country are taxed, and then the country will raise the cost of production as a result of lack of competitive capacity with other countries. Second, indirect tax is a type of regressive tax. It creates income inequality because whoever a rick man or a poor man who pay for the tax, the price in the market is same. The tax is the percentage of the price; for example, 5 $ is a huge amount for poor people whereas to rich people, it is almost nothing. Hence, rick people and poor pay the same amount which is unfair.
In this sense, factors and indicators of poverty have been analyzed. The results reported that the housing dimensions, the lack of services and insecurity are seen as the indicators, whereas unemployment, migration and social injustices are the factors of poverty (Berner, 2000). In addition, it has been argued that employment decreases from poverty rate and enhances the labor force, which imply economic growth. Statistics have shown that Algeria has witnessed a drop in job opportunities and important economic growth. It seems that the informal market is a systematic mechanism of the unsatisfactory formal economy and an indicator of these conflicting results (Berner,
As I said before, if there is a good economy rate then prices will affect people with lower incomes and they would be classified as poor and may even live in poverty, which would be bad for the economy. People would be more likely to commit crime to have a better life. In addition, unemployment is also an important source for social problems like crime. For example, France and Spain are currently having high levels of unemployment.
Instead, corruption has direct effect on economic and governance indicators, this direct effect in turn cause poverty. Therefore, the relationship between corruption and poverty examined here is an indirect one. Hence they developed two models; The “economic model” shows that corruption impact poverty by first affecting the economic growth indicators, which
Corruption affects our lives, society and economy. The corruption has affects both major and minor effect on the economic, which have a serious impact on the individual community and country. First, corruption leads to the depletion of national wealth. It causes increased costs of goods and services, the funneling of scarce public resources to uneconomic high profile projects at the expense such as schools, hospitals and roads. Moreover, it causes inflation and imbalanced economic development in market structures which cause economic delay in growth.
Distorts budgets, affects the operation of the trade, is an inflationary factor, contributes to the fiscal deficit, discourages investment, undermines the economy, generates capital flight, concentrates wealth in a few, contributes to tax evasion. For Professor Shang-Jin Wei (2002) "corruption decreases economic growth, biases the tax system to favour the rich and well-connected, biases government policies by favouring inequity in the ownership of available assets, reduces access to education of the poor and increases the risk in the investments of the poor ". 3.2 Social aspects and public capital Corruption has serious consequences that affect the development of countries. Some recent data show that the money spent on corruption stops being spent on public services provided by the government, such as public transport, electricity, drinking water, etc. In addition, corruption can end up endangering life and integrity of citizens.