Income Inequality In Australia: Causes And Implications
Australian Bureau of Statistics survey on income distribution
There has been an increasing number of the literary context regarding the administration of the capital of the country , Australia. As per the last few decades, the context of income distribution in Australia has come under the highlight just like some of the other OECD countries that has been growing and expanding in a rapid rate. The result of the survey by the Australian Bureau of Statistics (ABS) revealed the analysis regarding the facilitation regarding the gathering of the information related to the income scattering within the country. The people residing in the country had been facing numerous challenges from the year 1970, regarding the problems that are connected and related to the conventional wisdom that are furthermore linked towards the aspects regarding the scarcity rather than the successful attainment of the methods towards the managing of the affluence (Australian Bureau of Statistics, Australian Government. 2019). The period post of war witnessed numerous changes including the development of the new world with the inclusion of the concerns related to dominance and the ideas including the past regarding the diminishing significances that targets the rampant figure of inequality within the country. Numerous evidences and reasons have raised regarding the modern society despite of the interest on the subject of the inequality as one of the major part of the issues related to the economies in the country (Chatterjee, Singh and Stone 2016). The context of the inequality was not at all getting the worse scenario but had still been profound in nature. One of the major portion of the population in the country sensed the level of the rate of the inequality in the country lining with the context of the level of the security. This scenario are best described by the transformation theory indicating the factor of the industrialization in the country for which the citizens residing in the country were forced to move from the domain of agriculture to that of the industry (Coelli and Borland 2016). There has been an increasing rate of confusion accompanying the increased rate of wealth that has spread through out the country. Though numerous of the studies has elaborated the increase in the dispersion of the income in the country, some of the other studies assets the falling level of inequality. The essay targets to go through the concept of the increasing rate of the inequality among the inhabitants residing in Australia.
History of income inequality in Australia
One of the major factor that has been long considered as the tool or the index of the materialistic wellbeing in the country is the Income (Beer et al. 2016). The issues or the difficulties that are generally linked or associated with the development and the obtaining of the tools that are comprehensive in nature targeting the materialistic nature of the well being are basically numerous in nature. One of the main factor for this scenario being the cost.
Researches related to the inequality of the capital of the individual or the income can never be brought under thorough comparison. This particular context tends to occur for some of the various reasons and are basically the fundamental explanations regarding the data conflicts (Mendolia and Siminski 2016). The measurements or the tools that serves as the best and effective measurements in the case of the measurements units in this scenario are the Lorenz Curve, the Gini Coefficient, Hoover Index and more.
Numerous methods are there for initiating the measurement of the inequality of the income. It includes the variance, the range, the variation coefficient, the Atkinson Index, the standard deviation and the most common one, the Gini Coefficient. The factor of the relative dispersion is been illustrated by the coefficient of variation in the context of the outcomes around the mean. The ratio on the context of the standard deviation (s) to the sample mean (m) expressed as the percentage is the main definition of the coefficient of the variation. The coefficient of variation can be described as below:
This coefficient of variation adjusts with the results incurred from the variation for the scale that has been used in the aim that the scale is free of the unit.
As per the data gathered from the Australian Bureau of Statistics, the inhabitants of Australia specially the middle class of the people are losing their chances of mobility and has been shrinking for the reversal regarding one of the major important social reforms in the 20th century. As per the research data, the richest of the Australians have been long capturing the two third of the capital through out the last 15 years of the new and innovative household structures (Steffen et al. 2015). This particular scenario had been a very bad news for the lower and the middle class people residing in the country.
The Bureau of Statistics of the country illustrated and highlighted some of the innovative and new figures regarding the distribution of the income of the household and the rate of the spending of the capital or the wealth on the household have increased by the percent of 130 in the top fifth of the household while only a nominal amount of 50 percentage amongst the low income households within the range of the year 2003-2004 to 2017-2018 (Mendolia and Siminski 2016).
Measuring income inequality in Australia
The assignment targets to highlight the group of the individual who resides in between the rich community and the poor community. This has been one of the major concern since the middle class or the category of the community people have increased their per capita income due to the rise of the capital or wealth of the country (Fenna and Tapper 2015). Furthermore the issue problem or the issue lies on the instance that share of the middle class people was in the rate of decrease.
The data gathered from the census regarding the last eight years, there has been an increase level of the inequality that has made hard for the class to rise together with the inheritance that became more of the determinant regarding the future (Fleming and Measham 2015). The level of the wealth inequality has proven to be inversely proportion to the equality of the upcoming chances and opportunity.
Figure: The share of the capital and the asset by the net worth in the country
Source: (Australian Bureau of Statistics, Australian Government. 2019)
As per the above figure regarding the information by the Australian Bureau of Statistics, it has been revealed that the increasing level of inequality among inhabitants or the country’s citizen targets the notion that the poor people of country are drowning to be poorer while the rich people are increasingly getting richer.
One big social issue that has been harmful to the society is the context of inequality. Individuals in the country having very low level of income often have the tendency of being left behind. Australia has witnessed immense growth post the era of 1970 in its overall gross domestic product. It has also witnessed that the individuals of the community residing in the country has been increasingly facing inequality in terms of wealth or capital distribution. Widening the gap of inequality has been the worse sign for the economy of Australia (Burkhauser et al. 2015). Furthermore the country had been experiencing high rates of inequality for the purpose of the concentration of the powers and the resources in a veryfew hands.
In the scenario of the paid workforce, it has been noted that the inhabitants of the country were acting too impoverished in the case of the effective participation. There lies two of the major ways regarding the measurement of the inequality of the country. There lies both the wealth inequality and income inequality. According to reports and the analysis of the research by Inglehart and Norris (2016) the inequality in the context of wealth is higher in Australia as compared to the inequality of income.
Impact of income inequality on the middle class
Various research studies have taken place by numerous of the scholars in the aim of the investigation for the extent towards which income inequality was the main concern for the low income of the community of people who falls under the poverty line (Stapleton, Sorrell and Schwanen 2017). The aspect regarding the relative high rate of income for the individual who are comparatively rich in the country are some of the factors that has been in highlight. Furthermore the societies has been facing the increasing level regarding the up gradation and the inequality and that the level of the upgrading tends to take precedence regarding the decreased grading due to the cause of the polarization. Information or the data furthermore revealed that the individuals who are well off and better off have higher chances regarding the becoming richer (Borland and Coelli 2016). The net share of the total income of Australia has been taken up by 10 percent and has furthermore decreased from 50 in the year 1929 and 1932. The data furthermore revealed how it diminished to 35 percent in the year 2007 and increased as 50 percent.
The income inequality in Australia has witnessed a rising level of the growth that furthermore tends to have significant fosteration by the level of the inequality in the income of the market. The widening of the gap of inequality within the time frame of 1979 to 2004 was furthermore caused by high rate of tax and accelerated level of the generosity in the context of the social assistance and the employment assistance (Clark, Flèche and Senik 2016). The inequality in the market of the income intend to grew at a rapid pace for welfare and the programme of tax in the aim of the reduction in the effect of the polarization.
In the economic crisis of the year 197 to 1975, Australia has contributed to the country’s inequality at a large. The eruption of the economic crisis was just after the re election of the government of Whitlam Labour in the year 1974. During the era, the governmental policies in Australia were at the place of the swing starting from the stimulus of the Keynesian austerity regarding the scenario of the struggle regarding the minister of the policy (Knoll, Schularick and Steger 2017).
Australia had a strong and an organized unions of the trade and targeted the relevant attempts regarding the unions defence for the wage rise that may have sustained in the value of main and original price. In the year 1983,it all ended and furthermore, the political impasses was followed by the labour government election for the restructuration and the unprecedented of the economy.
Factors contributing to income inequality in Australia
Together with the wage policies, the country’s government were able to restructure the taxation business of the policies thus implemented (Kennedy et al. 2017). Besides these factors, the reduction of the statutory rate of tax about 47 percent at the year 1983 and also at the year 1996 with 36 %t has come over the highlight.
Conclusion
Hence it is to be concluded that scattering and the distribution of wealth or the income in the country of the Australia has been highlighted to widen the gap of the unequal distribution after the era of 1970. As demonstrated and analysed regarding the measurement of Gini coefficient and the curvature of the inequality in income it is thoroughly evident regarding the inequality among the revenue or the income of the community people of the country have increased resulting a big social problem due to its harmful structures and effects. People residing in the country with a very low level of income often tends to get discriminated and left behind. The period post of war witnessed numerous changes including the development of the new world with the inclusion of the concerns related to dominance and the ideas including the past regarding the diminishing significances that targets the rampant figure of inequality within the country. Numerous evidences and reasons have raised regarding the modern society despite of the interest on the subject of the inequality as one of the major part of the issues related to the economies in the country. The assignment essay highlighted and explored the context of the increasing levels of the rate of inequality among the Australian inhabitants as one of the major social concern that has been affecting the country overall.
Reference
Australian Bureau of Statistics, Australian Government. 2019. Australian Bureau of Statistics, Australian Government. [ONLINE] Available at: https://abs.gov.au/. [Accessed 13 February 2019].
Beer, A., Bentley, R., Baker, E., Mason, K., Mallett, S., Kavanagh, A. and LaMontagne, T., 2016. Neoliberalism, economic restructuring and policy change: Precarious housing and precarious employment in Australia. Urban studies, 53(8), pp.1542-1558.
Borland, J. and Coelli, M., 2016. Labour market inequality in Australia. Economic Record, 92(299), pp.517-547.
Burkhauser, R.V., Hahn, M.H. and Wilkins, R., 2015. Measuring top incomes using tax record data: A cautionary tale from Australia. The Journal of Economic Inequality, 13(2), pp.181-205.
Chatterjee, A., Singh, A. and Stone, T., 2016. Understanding wage inequality in Australia. Economic Record, 92(298), pp.348-360.
Clark, A.E., Flèche, S. and Senik, C., 2016. Economic growth evens out happiness: Evidence from six surveys. Review of Income and Wealth, 62(3), pp.405-419.
Coelli, M. and Borland, J., 2016. Job polarisation and earnings inequality in Australia. Economic Record, 92(296), pp.1-27.
Fenna, A. and Tapper, A., 2015. Economic inequality in Australia: A reassessment. Australian Journal of Political Science, 50(3), pp.393-411.
Fleming, D.A. and Measham, T.G., 2015. Income inequality across Australian regions during the mining boom: 2001–11. Australian Geographer, 46(2), pp.203-216.
Inglehart, R. and Norris, P., 2016. Trump, Brexit, and the rise of populism: Economic have-nots and cultural backlash.
Kennedy, T., Rae, M., Sheridan, A. and Valadkhani, A., 2017. Reducing gender wage inequality increases economic prosperity for all: Insights from Australia. Economic Analysis and Policy, 55, pp.14-24.
Knoll, K., Schularick, M. and Steger, T., 2017. No price like home: Global house prices, 1870-2012. American Economic Review, 107(2), pp.331-53.
Mendolia, S. and Siminski, P., 2016. New estimates of intergenerational mobility in Australia. Economic Record, 92(298), pp.361-373.
Mendolia, S. and Siminski, P., 2016. New estimates of intergenerational mobility in Australia. Economic Record, 92(298), pp.361-373.
Stapleton, L., Sorrell, S. and Schwanen, T., 2017. Peak car and increasing rebound: A closer look at car travel trends in Great Britain. Transportation Research Part D: Transport and Environment, 53, pp.217-233.
Steffen, W., Broadgate, W., Deutsch, L., Gaffney, O. and Ludwig, C., 2015. The trajectory of the Anthropocene: the great acceleration. The Anthropocene Review, 2(1), pp.81-98.