Which of the following actions by businesses can help reduce income inequality?

• A. Reducing employee benefits to lower costs
• B. Automating jobs without retraining workers
• C. Focusing solely on maximizing shareholder profits
• D. Implementing higher minimum wages for employees

Answer: (D)

Verified step by step guidance

1. Understand the concept of income inequality, which refers to the uneven distribution of income across different individuals or groups in an economy.
2. Recognize that actions by businesses can influence income distribution either by increasing or decreasing inequality.
3. Analyze each option: reducing employee benefits typically lowers workers' total compensation, which can increase inequality; automating jobs without retraining workers may lead to job losses or lower wages for displaced workers, increasing inequality; focusing solely on maximizing shareholder profits often prioritizes returns to capital over wages, potentially increasing inequality.
4. Identify that implementing higher minimum wages directly raises the lowest wages in the economy, which helps increase the income of lower-paid workers and thus reduces income inequality.
5. Conclude that among the given options, implementing higher minimum wages is the action that businesses can take to help reduce income inequality.