Economic and Social Costs of Inequality in Australia

It is a commonly accepted that inequality is increasing throughout the globe, with startling statistics such as the recent Oxfam report indicating that the richest 85 people in the world own more wealth than the poorest 3.5 billion people(Oxfam Australia Media, 2014). Inequality is thought of as disparities or gaps, such as the distance between a low income and a high income household, or the ratio of their incomes (Divided We Stand, 2011). Domestic inequality refers to inequality within a country and

Economic class has been one of the reasons behind inequality and discrimination in our society. Inequality is one of the main issues in America, in which people are not provided with equal opportunities. Income inequality is increasing rapidly between people, as the economic progress for lower and middle class is not improving. As a result of income inequality, social inequality is increasing within a society. The difference in payment levels does not only affect the family status, but it also reduces their chances of affording health insurance and providing better education for their children.

Income and wealth inequality refers to the degree to which income is unevenly distributed among people in an economy. The share of total income received by different groups measures inequality, this visually represented in the Lorenz curve. The line of perfect equality bisects the graph with the percentage of income

The extent of institutionalised inequality has decreased but is still to a high extent in and is applied in all areas of Australian society

Australia is a market economy which distributes income to factors of production- land, labour, capital and enterprise. Income as defined by L. Kirkwood et al as the inflow of money to one sector of an economy from another. The distribution of income in the economy is in the form of wages, salaries, rent, interests and profit, all which are distributed by the factors of production (L. Kirkwood et al: 2006). Unlike income, wealth is the stock of goods and assets owned by individuals and the nation as a whole at a given period of time L. Kirkwood et al: 2006). As well as possessions individuals can also obtain wealth through education or obtaining a particular skill. It is with wages and salaries that determine the income and the next most important category government pensions and cash benefits L. Kirkwood et al: 2006).

Before discussing the extent of poverty in Australia, it is first crucial to mention the difference between absolute poverty and relative poverty. Absolute Poverty is a situation where deprivation is extreme because people do not have access to the basic necessities such as food, clothing, and shelter. In contrast Relative Poverty is a situation in which the incidence of poverty is measured relative to things such as average weekly earnings or income per head. Therefore poverty, as talked about in Australia is the state where income is insufficient to meet the minimum needs of the household or individual.

Income inequality is one of the greatest problems facing the United States today. It is important for everyone to understand what this means and why this is a problem.

The issue of income inequality in the United States is complicated and does not have a definite answer. Income inequality can be measured in a few different ways. The first measurement for the income inequality in a country is to look at the percentages on households and group them into income categories, called distribution by income category. The second measurement for income inequality is called distribution by quintiles or fifths. This is when you divide the total number of people, households, families into five groups called quintiles to examine the percentage of total before tax income received by each quintile. Each quintile would then be ordered by income and households in the category.

First we must define what exactly income inequality really is and that is according to Definition of ‘Income Inequality’ (2015) said to be unequal income distributed to household or individual across the various participants in an economy. Income inequality is often presented as the percentage of income to a percentage of population. For example,

Income redistribution refers to the concept of transferring income from the wealthy individuals to the less wealthy individuals through social mechanisms such as monetary policies, charity, welfare, land reforms, and taxation among others. Income redistribution affects the entire economy rather than selected groups of individuals. The concept of income redistribution emanates from the existence of income inequalities within an economy. Income inequality depicts a gap between the highest and the lowest income earners in an economy (Tullock 13). Income inequality is sometimes considered appropriate in societies since it acts as an incentive in free market economies, whereby in the absence of inequality, elements of economic stagnation and lack of enterprise would emerge. Conversely, income inequality is criticized on the basis of introducing contributing towards the development of key problems in the society, including progression of poverty levels. This paper seeks to explore the concept of income redistribution and its key pros and cons.

Income inequality measures may or may not have certain desirable properties such as Scale invariance: inequality is invariant to proportional increases or decreases in Everyone’s income (Allison, 1987).The protesters in the Occupy Wall Street movement have made a point. There is an unfair division of wealth in North America and other industrialized nations around the world. The very rich continue to accumulate wealth while the poor only seem to become more poverty-stricken as time passes.

Income Inequality is best defined as an unequal distribution of household or individual income across various people in an economy. It is often presented as the percentage of income to a percentage of the population. In New York City, whether people want to admit it or not, there are still social classes in which everyone gets paid differently depending on where you live. Depending on the type of income an individual or family receives determines the kind of environment they live in. It is all based on what people can afford. Unfortunately, those who are living in poor neighborhoods receive low-income cause a lot of health problems.

Social stratification is a concept used within sociology that explains the divisions and social inequalities of large groups of people within a particular society. The Hunger Games (2012) is a film that demonstrates this through amplifying how the power of the rich members in a polarised society are taking control of the poor and separating them in different districts which create specific social rankings. This essay will use the perspective of conflict theory to examine how Australian society is also effected by social stratification and therefore divided in social classes which effects their access to social equalities.

Income inequality has affected American citizens ever since the American Dream came to existence. The American Dream is centered around the concept of working hard and earning enough money to support a family, own a home, send children to college, and invest for retirement. Economic gains in income are one of the only possible ways to achieve enough wealth to fulfill the dream. Unfortunately, many people cannot achieve this dream due to low income. Income inequality refers to the uneven distribution of income and wealth between the social classes of American citizens. The United States has often experienced a rise in inequality as the rich become richer and the poor become poorer, increasing the unstable gap between the two classes. The

Traditionally Australians have believed in and conveyed the myth of Australia as a fair , egalitarian society without excess wealth or poverty, however we are definitely not a classless society. Australia's education system has been and remains one of the most unequally distributed social resources and could possibly be regarded as the main source of inequality in our society (Encel 1970; Anderson & Vervoorn 1983; as cited in Jamrozik, 2009). Now more than ever, Australia's education system is acting as a kind of 'sorting out' mechanism, allocating people to certain stations within