FX.co ★ 7 causes of global inequality

Educational background

According to analysts, the level of education is one of the main causes of social inequality. Education determines the future income of people as they can have either a low-paid or a high-paying job. The better the education, the more relevant are the skills of an employee. The correlation between the level of education and salary can be traced in developed countries and big cities. However, education and its application depend on personal qualities of a person.

Innovation technology development

Some experts believe that development of innovative technologies is one of the reasons for high unemployment. Thus, the advancement of technologies in robotics leads to competition between a robot and a human. As a result, people can lose their jobs. However, it concerns not only working class individuals but intellectual workers as well. Due to active development of artificial intelligence, robots can replace people in fields such as science and art. Therefore, job losses lead to wage cuts and inequality.

Gender inequality in the labour market

Gender inequality in the labour market still remains a live issue in the majority of countries around the world. For example, in the US, women who work full-time, receive only 77% of men's salary. On the contrary, men who work part-time can be paid less than women. According to experts, such differences are the result of gender inequality and the work approach. Thus, when looking for a job, women pay attention not only to the size of their salaries but also to a number of related factors such as convenient work time, a good team, etc.

Globalization

Globalization is changing the world we live in every day. Moreover, this tendency is going to increase over time. According to experts, globalization has a significant impact on inequality. As international trade continues to grow, there is serious competition between workers from wealthy and poor countries. As a result, the income of workers in developed countries is falling rising tension in the society.

Quantitative easing (QE)

Quantitative easing is one of the main objectives of economic policy in Western countries. According to experts, QE supports global economic growth. The money, created within the quantitative easing program, is directly forwarded to the financial sector. These measures are beneficial to large asset owners, though ineffective in regards to the populace.

Zero interest-rate policy

When a central bank lowers its key interest rate, the cost of the public debt also decreases. The richest corporations and cabinet ministers are the ones to benefit the most from low-interest rates as they own cheap debts. The policy of lower interest rates stimulates the accumulation of debt leading to a sharp increase in asset prices.

Decreasing purchasing power

According to expert estimates, purchasing power decreased by 99% over the past 10 years. On average, it lost 5% every year. As a result, people who receive their income in the form of wages or salary faced with the depreciation of savings. However, the decrease of purchasing power caused less damage to owners of financial assets. Such causes of inequality directly depend on government policies of different countries.