At WiseGEEK, we're committed to delivering accurate, trustworthy information. Our expert-authored content is rigorously fact-checked and sourced from credible authorities. Discover how we uphold the highest standards in providing you with reliable knowledge.
Economic inequality refers to financial disparity. It is rare to find a society in which everyone is in the same economic class, meaning every person has equal amounts of financial and material resources. It is common, however, to find that there are people with wealth and income differences that result in some living in abject poverty while others live in extreme luxury. This is often the subject of debate because the effects may extend into areas of life that should not be impacted by economic status.
If an assessment is done of most societies, it will be found that some people are poor, others are rich, and there are numerous classes in between. When assessing peoples' finances, it is commonly discovered that not only is there a disparity between classes, but the top class has significantly more than each of the other classes, especially the lowest. This entire situation is referred to as economic inequality.
There are usually two primary focuses when considering economic inequality. First, there is wealth, which is a measure of the money and material possessions people already have. Wealth has the potential to greatly impact the manner in which people live because it can determine what they are able to purchase and what they are able to do at present. Those considered wealthy, therefore, tend to have much better standards of living than those in lower economic classes.
The second important financial indicator assessed when considering economic inequality is income. Some people have little or no wealth because they have little or no income. Although it is not always the case, it common to find that those with the most wealth and the best standards of living are also those with substantial inflows of money.
The economic inequality in some places is much more drastic than in others. For example, in countries where there is a lack of social service systems, the disparities may be most obvious. While some people are extremely wealthy, others may suffer inhumane situations such as starvation and lack of basic necessities. In countries where there are social service programs, the gap between the lowest economic class and the highest is generally narrower, but there are still major differences in the lifestyles of the groups.
Economic inequality is the subject of debate for a number of reasons. A major argument often raised is that income and wealth disparities affect peoples' access to items and services that should be available to everyone, such as food, health care, and legal representation. Another problem often associated with economic inequality is the ability for the wealthiest individuals to influence the political atmosphere, which affects all of the economic classes.