Final answer:
Economists attribute the increase in inequality of incomes primarily to globalization and technological change, which have heightened demand for high-skilled labor thus altering wage distributions and amplifying income disparities.
Step-by-step explanation:
The main reasons economists give for the increase in inequality of incomes are two-fold: globalization and technological change. These have notably impacted the labor market by increasing the global demand for high-skilled labor and in turn, the wages of such labor relative to low-skilled labor. Responding to this, the market has seen a shift in the distribution of wages since the late 1970s. With the advent of new technologies, the demand for high-skilled labor has increased more rapidly than the supply, thus pushing up the earnings of high-skilled workers. Conversely, if the supply of lower-skilled workers exceeds demand, their average wages tend to decrease, leading to a widening income gap. Recognizing the impact of these market forces, Government Policies to Reduce Income Inequality are implemented to balance the scales. These policies include redistributive measures, improved educational opportunities, and estate taxes, all aimed at leveling the economic playing field.