Income disparity is a reality in many countries

Income inequality is a fact in many countries around the globe, and developing countries are not immune to the phenomena. There is a significant disparity in wages between the wealthy and those in the lower-income bracket. The inequality has grown over time, and if no changes are implemented, the divide between the haves and have-nots will begin to widen and could spiral out of reach. Capitalism and openness to technical advances are two reasons that have led to the expansion of the divide.
The unequal distribution of revenue within a population is referred to as income inequality. It was a phenomenon that was previously common among the developing nations, but currently, it has caught up with developed countries too. It causes great hindrance to development, as while one part of the population continues to advance, the other part of the population lags behind. Economies suffer when there are large gaps in the levels of income among different participants in the economy. The disparity in income is best expressed as a percentage or a ratio between the population and the revenue of the nation. For example, eighty percent of a country’s income may be controlled by thirty percent of the population (Page & Jacobs, 2009).

There many factors that contribute to the situation, and it only gets worse when the government does not take measures to lessen the impact on the economy. Education affects the level of income that individuals earn. Some people in certain socio-economic groups have no access to quality higher education, which means that they also cannot get opportunities to be employed in positions that require high academic qualification, and which pay well. Such positions become a reserve for the rich who can afford to provide quality education to their kids.

Wages that remain stagnant at a certain level also contribute to income disparity. On the other hand, salaries for executive positions tend to be reviewed upwards periodically. Labor unions have continued to experience diminishing influence and no longer have the power to negotiate an increase for workers (Page & Jacobs, 2009).

Competition for talent is also a contributing factor to the salary divide. Competition for high-quality abilities, skills, and talents mean that people with the same talents may be paid differing salaries or wages depending on their level of competence, and the field of employment. Huge bonuses and incentives for executive talent mean more income for those at the top of the ladder and lower income for their counterparts at the lower levels of the economic ladder (Das, Das & World Scientific, 2014).

Solutions to income disparity in developed countries

Most of the problems highlighted above can be solved by the government if they can take steps towards reducing the gap. In addition to the factors above, other contributors to the salary divide in developed countries are private and government employers. The government should be the primary employer of its citizens, and when it fails to assimilate all job seekers, the private sector should step up to bridge the gap, but in most cases, this does not happen, and vice versa. Some of the solutions that the government can provide to deal with the problem of income disparity include:

Enforcement of a living wage

Setting a minimum living wage ensures that the unemployed and the poor have a source of income. However, some economists argue that a living wage would increase unemployment (Page & Jacobs, 2009). Countries like Afghanistan have laws that outline that workers in the private sector should not be paid less than those working for the government. Albania, Algeria, and Angola are other developing countries that have minimum wages for their workers. However, some developed countries like Sweden, Norway, Iceland, and Switzerland have no set minimum wage because their employees belong to unions that negotiate fair pay for them. Unions that have bargaining power, therefore, need to be established in countries with income disparities (Gornick & Jäntii, 2013).

Provision of education opportunities

Every government should make it a priority to ensure that its citizens have access to quality education to the highest level. This can be achieved through the provision of compulsory basic education and subsidized higher education, and fees should also be waived for students who are not able to afford the fees for higher education. This positions them to be better competitors in the job market, or even to become business entrepreneurs who create employment for others.

Intervention by the government in these main areas can go a long way in ensuring that the gap between the rich and the poor does not continue to widen. These measures can go a long way in upgrading the living standards of the wider population of the developed countries and making it easier for them to sustain themselves.


Gornick, J. C., & Jäntii, M. (2013). Income Inequality: Economic Disparities and the Middle Class in Affluent Countries. Stanford, Calif: Stanford University Press.

Das, M., Das, S. K., & World Scientific (Firm). (2014). Economic growth and income disparity in BRIC: Theory and empirical evidence. Singapore: World Scientific Pub. Co.

Page, B. I., & Jacobs, L. R. (2009). Class war?: What Americans really think about economic inequality. Chicago: University of Chicago Press.

Need help with your homework? Let our experts handle it.
Order form