There are numerous reasons and theories that can be attributed to the economic inequality prevalent within the societies. In the rise and growth in the overall income, increase in the economic inequality in salaries and wages is considered as the major factor, at least among the OECD countries. A famous economist by the name of Thomas Piketty suggests the fact that widening the economic disparity in the society is an inevitable phenomenon of free market capitalism. This will hold true when the rate of return of capital (r) will be greater than the rate of growth of the economy in the country. There are various factors that attribute to the inequality of economy. Labor market outcomes and globalization are the two most popular reasons amongst all. Other than that, the increased suppression of wages in low-skilled jobs due to a rise in the number of low-skill labor in major developing countries can also give rise to economic inequality. Another factor can be the increase of the market size and the rewards for firms and businesses catering to a niche field. The provision of more opportunities for investment for the already-wealthy people also strikes an imbalance in the economic equilibrium. Other factors like decrease in the domestic influence, an increase in the international influence and policy reforms are some of the other major reasons for economic inequality. An extra-legal ownership of business and real estate property, plutocracy and even more regressive taxation, automation, computerization and increase in technology are some of the major reasons of economic inequality. This is because an increase in technological aspects means that more skills are required to obtain a higher or moderate wage (Solt, 2008).
It can also be a result of gender discrimination, ethnic discrimination or nepotism. Some other reasons can be neo-liberalism, variation in natural ability. For example since the 1960s in the United States, the growth of the acceptance of extremely high salaries of CEOs created huge dicrimination. Another theory that can be attributed to economic inequality is the land speculation. According to a famous economist Henry George and his followers, land speculators as well as landlords derive excess income and wealth from land business to have an exponential growth in lines with development. This results in the growth at a much higher rate than the growth of the population. Their solution is to tax the value of land, although not necessarily other improvements or structures. This concept is popularly known as Georgism. The question arises that what would be the correlation between economic inequality and health along with well being. There has been a constant rise in the evidence from scientists all over the world that indicates that several health outcomes can be linked to economic inequality (Rowlingson, 2011).
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