Answer to Question #60767 in Microeconomics for Jhoana

Question

What Should Be Done To Address Income Inequality and Poverty?

State your conclusion and a piece of statistical evidence that supports your conclusion,

Answer 1

Reducing inequality and poverty, and promoting equity, are important macro-economic objectives. The widening income gap between the rich and poor has highlighted the need to understand the causes of relative inequality and poverty, and to construct suitable policies to reduce poverty and narrow the income gap.
Governments can intervene to promote equity, and reduce inequality and poverty, through the tax and benefits system.
Cash benefits are designed to help those on low or zero original income, and include contributory and non-contributory benefits.
Benefits in-kind are those services, such as healthcare and education, that are provided free or heavily discounted at the point of consumption.
The long-term aim of a minimum wage is to remove the problem of poverty pay, which exists when the earnings from paid work do not result in a living wage and fail to push people out of poverty.