If all families earned the same income then the graph for the Lorenz curve would be a diagonal line beginning in the lower left-hand corner and moving towards the upper right hand corner. But because all families don't receive the same income, the curve showing the actual income distribution is curved. Thus the area between the ideal diagonal line and the curve shows the degree of income inequality. There are numerous amounts of reasons as to why incomes of various groups may be different. The first reason has to do with education.
Some people have higher incomes than others do because they obtained a higher level of education.
Thus they are put in better positions to get higher paying jobs that require higher levels of skills. The second reason for income inequality has to do with the fact that some people hold more wealth than others and that the distribution of wealth is more uneven than that of income. This inequality gives the wealthy the advantage to send their children to expensive colleges and universities, and to set their children up in business so they can earn a better income. Discrimination is another reason that there is an inequality with regards to income. Certain unions may deny immigrants or minorities membership o the grounds that certain groups are not fit for certain professions.