- Social Problems:
- Can exacerbate inter-group relations and conflict.
- Reduces social cohesion.
- Can lead to increased violent crime and drug usage.
- Impacts mental health.
- Economic Development:
- Hurts not only the poor but everyone.
- Can lead to lower overall economic growth in the long run.
- Reduces aggregate demand if purchasing power is concentrated.
- Hinders human capital development for a large segment of population.
- Can make poverty reduction efforts less effective.