the unequal distribution of income and wealth in a society is referred to as economic inequality. It is a complex issue with many causes, including:

• Differences in skills and education: In general, people having higher education and skill are more productive and have higher incomes.
• Differences in bargaining power: Some workers, such as unionized workers, have a lot of negotiation power. This enables them then bargain for better salary and advantages. 
• Discrimination: Economic inequality may arise as a result of discrimination based on such things as race, ethnicity or gender.
• Inheritance: The likelihood that a person will be rich is increased, if he or she inherits wealth from his/her parents. This may result in the accumulation of riches in very few handfuls. 

Several negative consequences of economic inequality are:

• Reduced economic growth: Economic inequality has the potential to halt progress in innovation and small business creation.
• Increased social unrest: An economic disparity may also result in social disorder and political imbalance.
• Reduced social mobility: People, from disadvantaged backgrounds, find it hard to climb the social hierarchy as a result of economic inequality.
• Poor health outcomes: Several studies indicate that economic inequalities are linked to various negative health outcomes including coronary heart diseases, strokes, and mental disorders. 

Many things that governments can act to reduce economic inequality, following as:

• Investing in education and training: By investing in an education and training programme, worker’s skills are enhanced and increase their production capabilities.
• Strengthening labor unions: Labor unions, in part, assisted by enabling workers’ negotiation of better wages and benefits.
• Enacting anti-discrimination laws: This would involve anti-discrimination laws against racial, gender, ethnic, and other forms.
• Progressive taxation: Under progressive taxation, high income individuals are charged at a higher proportion of their receipts. It can facilitate distribution of wealth from the rich and poor.
• Social safety nets: Social safety nets like unemployment insurance and welfare can also work in reducing poverty and inequality.