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There are a range of policies the government could use to reduce income inequality. These include:
1. Change the tax and benefit system
• Increase the higher rate of income tax. This will make the tax system more progressive and will reduce the income of the top earners. The money could then be redistributed to the poorest.
Measures to reduce unemployment and economic inactivity.
• Unemployment is one of the major causes of poverty. Therefore decreasing unemployment will decrease poverty
• The government have used special employment measures such as the single work and the welfare to work programmes to improve the job prospects of the unemployed.
• Regional policy assistance. The government can focus attention on areas of high unemployment and encourage firms to locate there.
3. Measures to increase average pay of lowest paid
• Increasing the NMW will help to increase the incomes of the low paid and also improve the incentive for people to find work.
• Encourage firms to pay a living wage
• Legislate against unpaid internships and zero hours contracts
• Increase the pay of low-paid public sector workers
lydiajane74 answered the question on July 4, 2018 at 10:32
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