Economic inequality is the uneven distribution of opportunities, incomes and wealth within a society or between countries. These differences can be driven by a variety of factors, including gender, age, origin, ethnicity, disability, sexual orientation and class. Inequality can lead to lower growth, erode social cohesion, and contribute to political instability.
There are many causes of economic inequality — some global in nature, such as technological advancement and the expansion of trade resulting in the hollowing out of middle-class jobs, and other country-specific factors such as redistributive tax policies, macroeconomic conditions, and labor and product market liberalization and deregulation. In addition, societal attitudes and beliefs can also play a role in driving inequality trends. For example, a “keeping up with the Joneses” mentality that drives consumption may not only harm incentives to work hard but could result in unnecessarily consuming resources for no greater utility.
More than eight-in-ten people around the world say that wealthy individuals have too much influence over politics and that the government does not do enough to reduce economic inequality. A similar share says that education problems and the unequal distribution of talent (including physical skills, a genius IQ) are important contributors to economic inequality in their country. Other popular factors cited include businesses replacing lesser-skilled workers with technology that requires higher skill levels, globalization and outsourcing, and structural racism. Economic inequality also depresses civic engagement, as lower-income groups spend most of their time working and securing basic needs, and are less able to dedicate the time necessary to acquire the knowledge and resources needed for active participation in politics.