Income Wealth Lower 6 th Macro National Income

Income & Wealth Lower 6 th Macro National Income

Income & Wealth: Wealth is a stock concept. Assets owned e. g. buildings, land, savings, shares or human wealth e. g. skills and education Income: Income is a flow concept: money generated from wealth e. g. wages, rent, interest Link: Income and wealth are correlated i. e. there is a dependency between them As income flows from the stock of assets a nation’s income and wealth are directly correlated UK figures: In the UK the mean household disposable income is £ 34, 200 and the median wealth in the UK is £ 286, 600 (both 2018). However, neither Income or wealth are spread equally! (Chart source: The Equality Trust) Key question: why is wealth spread more unequally than income? Wealth can be thought of as the stock of left over income after consumption. It costs everyone roughly the same the consume the essentials For someone with high income this leaves them a lot of money each year which accrues to give a large wealth For a low income individual however, the majority of their income is spent on these essentials, with little left over and so wealth doesn’t accrue very easily. This accumulation of wealth is accelerated as a person’s income is increased more and more by virtue of having wealth. The level of wealth inequality continues to widen Global wealth: top 80 billionaires own have more wealth than the poorest 50% of the world’s population (3. 5 billion people) How is wealth shared in the UK?

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