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What income inequality looks like across Australia

Nicholas Biddle and Francis Markham write in The Conversation (6.7.17) that recently released Census data shows there is worrying income inequality between, but also within, regions of Australia.

‘With affordable houses increasingly out of reach, wage growth slow and household debt high, Australians are certainly feeling poor. But how do they compare to their neighbours? New Census data confirms there’s a lot of variability in income.

‘The Census breaks the country up into 349 geographic regions (named in quote marks below), some of which cover more than one major town and some of which group related suburbs within cities. We examined 331 of these regions, excluding those containing fewer than 1,000 households.

‘The data show there are high levels of income inequality within these regions. A simple way to measure this is to look at the ratio of income between those who are well off (the top 20% within a region) and of those who are relatively disadvantaged (the bottom 20%) in the Census data. In Australia the weekly household income for the top 20% (A$1,579 per week) is 3.5 times the income of the bottom 20% (A$457).

‘… It’s true that the level of income mobility is higher in Australia than it is in the US. However, Australia also has prominent examples of economic policies that disproportionately benefit the upper-middle class, such as the capital gains tax discount and superannuation tax incentives.

‘Australia also has a geographically concentrated income distribution, with the rich living in neighbourhoods with other rich people. The poor are also more likely to live in close proximity to people who share their disadvantage.’

Australians are getting poorer – but it has nothing to do with immigrants

Tom Westland comments in The Guardian (25.7.17) on the income inequality debate, suggesting that immigrants aren’t to blame for our economic slide, but instead we’re wasting our own resources through ‘political laziness and incompetence’.

‘One of the reasons that economic growth is desirable is that it makes people more pleasant to be around. When we feel our wallets getting fatter, we tend to be more generous to those around us. This doesn’t mean that rich people are nicer than poorer people. But a given individual is usually better to be around when their financial situation is improving – they might buy a couple of rounds at the pub, say – than when it’s stagnating.

‘What is true of people is also true of societies, as Benjamin Friedman has argued. Citizens of a growing economy are less violent to each other and more hospitable to immigrants. Which brings me to the extraordinary outbreak of venom in Australia recently. As Antoun Issa argued in the Guardian, the sheer tonnage of undisguised hatred in the media of late is as extraordinary as it is worrying. And while it’s easy to dismiss the comments of those such as Rowan Dean or Prue MacSween as attention-seeking, it would be focusing too much on the supply of racist material and not enough on the demand for it.

‘One reason I suspect is that we do not feel like they’re getting any richer, and we’re looking around for people to blame. Australians are indeed, on some economic measures, getting noticeably poorer. One explanation is that we haven’t quite worked off the hangover from the mining boom: as the economist Ross Garnaut predicted, the end of the boom has led to stagnant incomes and a restless electorate. In addition, as Greg Jericho has argued, unions that used to fight for wage increases have become weak.’

The TJRyan Foundation does not guarantee the accuracy, currency or completeness of any information or material available on this website. The TJRyan Foundation reserves the right to change information or material on this website at any time without notice. Links from this site to external, non-TJRyan Foundation websites should not be construed as implying any relationship with and/or endorsement of the external site or its content by the TJR Foundation, nor any commercial relationship with the owners of any external site. Should any TJRyan research project be funded by an individual or organisation the source of funding will be stated beside the research report. In all other cases contributions are provided on a pro bono basis.
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