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Malaysia Economi

In: Business and Management

Submitted By kiwifruitmimie
Words 384
Pages 2
Question 3

Factors that contribute to the inequality in Malaysia is

1) Globalization - Trade liberalization may shift economic inequality from a global to a domestic scale. When rich countries trade with poor countries, the low-skilled workers in the rich countries may see reduced wages as a result of the competition, while low-skilled workers in the poor countries may see increased wages

2) Social inequality

- Social inequality begins in 2 thing education and culture. Education is what establishes your ability to become self-sufficient. The better the education the more opportunities open up for you to have options in life. These options can provide a lot of things, like money and security, and better choices to choose from. Culture is in there too. Some cultures refuse to learn the modern ways of science and technology, and even languages. Some cultures believe it's a bad thing to move forward from the old ways and develop new traditions and practices. While the rest of the world moves on and forward as you sit still and watch because of cultural or, economic, or education deficiencies, will result in social inequality

3) Labour market

- Characterized by the free play of market forces. It has been observed in the developing economies that for unskilled jobs the supply of labours far outstrips the demand for the same. This leads to a low wage for the workers. The situation may be completely opposite in the market for skilled labour’s. Thus there exists a wage differential or inequality among different sectors of an economy. However, wage differentials on a global scale are affected by a complex set of factors, one being the present day concept of outsourcing.

4) Wealth condensation

- Is another factor, which may give rise to inequality. Put simply it means the rich only gets richer. A minority of a country's population is seen to possess the majority of its wealth. The person with a higher income and wealth displays a higher marginal propensity to save as compared to one with a low asset base. The phenomenon of wealth condensation also leads to an intergenerational inequality. In simple terms offspring of wealthy individuals get a head start in life while those belonging to less fortunate parents need to depend primarily on their innate ability and available social security.

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