Answers
Answer 1.
• the demand for high skill labor has been rising faster than the supply of high-skilled labor
• the demand for low-skill labor has been rising slower than the supply of low skilled labor
Reason- Demand for high skill labor has risen faster than supply leading to rise in wage.
But demand for low skill labor has risen slower than supply leading to fall in wages.
Both these factors combined leads to rise in income inequality.
Answer 2. Poverty trap
Reason- Poverty trap is a spiral mechanism whoch forces poor people to remain poor. TANF provides assistant which when combined with their own earnings helps poor to get out of the trap.
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