Examine the reasons for or causes of income inequality/differences in wages in your country

Causes of income inequality in Uganda

• Difference in talents (natural ability) those who are naturally talented e.g. footballers, musicians usually earn higher incomes than their counterparts that are not talented.
• Differences in resource endowment. Places rich in productive resources usually earn more than others
• Differences in opportunities: people with good paying jobs earn more than others with low paying jobs
• Level of education and training; highly educated and well- trained people tend to earn more than those with low education and training e.g. Doctors versus nurses.
• Differences in physical and mental abilities; the mentally sound and physically strong tend to have ability and willingness to work and hence have higher incomes compared to those that are insane and physically weak
• Differences in age, sex, tribe and race; labour discrimination is based on these factors to determine individual income.
• Inheritance; those from rich families inherit and get rich unlike those from poor families.
• Differences in wages; some people earn higher wages compared to others
• Differences in infrastructure distribution. Area with even distribution of infrastructure tend to have high productivity hence higher incomes than others with under developed infrastructures
• Differences in mobility of factors of production; mobile factors of production can easily move from areas of low payment to areas of high wages unlike immobile factors of production.
• Political stability; areas that are politically stable attract investment than those that are unstable.
• Influence of trade unions. Strong and sound trade unions agitate for favorable conditions of work.
• Government policy; government tend to favor some parts of the country when allocating resources. These get higher incomes
• Poor land tenure system; land is not evenly distributed making those with land to produce and earn income than those without.
• Globalization – Lesser-skilled Ugandan workers have been losing ground in the face of competition from workers in Asia and neighboring countries.
• Skills– The rapid pace of progress in information technology has increased the relative demand for higher-skilled workers.
• Social norms –CEO pay is very much higher than a normal worker
• Uneven distribution of industries between urban and rural area. This  is  as  a  result   of concentration     of  industries    and   other   social   infrastructures     in  urban   areas   which    leads   to imbalances   in income  generating   activities  in favor  of urban  areas hence  income