Lednum

My study blog

critically examine the effectiveness of government polcies to rduce wealth inequalities?

Posted by lednum on March 27, 2007

Introduction: The government has attempted to reduce wealth inequalities by targeting those most vulnerable, for example the elderly and the unemployed.  This essay will examine the effectiveness of these policies.

The New Deal:

  • Introduced to get the unemployed back into work or into training or skills development that will eventually lead to work.
  • Appeared to be effective as by 1999, figures showed that 155,000 young people got jobs.
  • Before the New Deal there had been more than 62,000 who had been jobless for more than a year, but by 1999 the figure had dropped to 9,000.
  • In
    Scotland the New Deal helped cut youth unemployment by 60% and overall long term unemployment by 40%.
  • On the other hand however, some believe that this policy was not effective and that the unemployed would have got jobs anyway due to the strength of the economy.

National Minimum Wage:

  • This was introduced to set a base level of hourly income for low paid workers.
  • In 2005 the (NMW) was set at £5.05 per hour, this policy was effective as around 2 million workers benefited.
  • This particularly improved the wages of women, as 72% of women whom worked part time in industries such as hospitality, security and the cleaning, but mainly retail saw an increase in their income.
  • On the other hand however, trade unions argue that the value of the (NMW) has fallen from 39% in 1997 to 36% in 2005 of the average hourly earnings.

Pension Credit:

  • This was introduced to try and eradicate wealth problems, any single pensioner with an income below £114.05 per week would receive pension credit to make up the difference.
  • This policy was effective as from 1995-1997, 27% of pensioners in the UK had an income less than 60% of the national median whereas by 2002 this had fallen to 21% –this helped improve the financial situation of today’s pensioners

Winter Fuel Payment

  • Pensioners would receive money in the winter to help meet the costs of keeping their homes warm
  • However, this policy failed to improve the lives of elderly people as in the winter of 2004, 21,500 people over the age of 65 died as a result of the cold in England and wales.
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