Economic Equality

There are three main types of economic inequality:

1. Income Inequality

Income inequality is the extent to which income is distributed unevenly in a group of people.

Income

Income is not just the money received through pay, but all the money received from employment (wages, salaries, bonuses etc.), investments, such as interest on savings accounts and dividends from shares of stock, savings, state benefits, pensions (state, personal, company) and rent.

Measurement of income can be on an individual or household basis – the incomes of all the people sharing a particular household. Household income before tax that includes money received from the social security system is known as gross income. Household income including all taxes and benefits is known as net income1.

2. Pay Inequality

A person’s pay is different to their income. Pay refers to payment from employment only. This can be on an hourly, monthly or annual basis, is typically paid weekly or monthly and may also include bonuses. Pay inequality, therefore, describes the difference between people’s pay and this may be within one company or across all pay received in the UK.

3. Wealth Inequality

Wealth refers to the total amount of assets of an individual or household. This may include financial assets, such as bonds and stocks, property and private pension rights. Wealth inequality, therefore, refers to the unequal distribution of assets in a group of people.  (equalitytrust.org)