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The Yoke of Inequality Burdens Us All

By Ad Astra

It was in 2012 that The Price of Inequality by Nobel Prize winner Joseph Stiglitz was published in America and the United Kingdom. In 2013 it was distributed worldwide by Penguin Books. This seminal work, tellingly subtitled How Today’s Divided Society Endangers Our Future was widely acknowledged.

As Stiglitz recounts in the Preface to the Paperback Edition, “It was clear from its reception that it had struck a chord, not just in the US, but around the world, where there is mounting concern about the increase in inequality and the lack of opportunity, and how these twin trends are changing our economies, our democratic politics, and our societies.”

Has the situation improved since then?

No.

At the G7 meeting in August in the French resort town of Biarritz, the host, French President Emmanuel Macron, officially declared the summit would focus on social inequality; more contentious issues like trade and climate change had already been broached.

Are there any existential issues more critical than climate change, which threatens our planetary home, and inequality, which threatens to tear apart the very fabric of societies the world over?

This piece will place before you the mounting evidence, drawn from recently published articles in the mainstream media, that inequality is not easing, but is steadily worsening. You can draw your own conclusions.

Let’s start with Kate Griffiths and Danielle Woods of the Grattan Institute, writing in The Conversation in an article titled: For the first time in a long time, we’re setting up a generation to be worse off than the one before it. They begin:

We’ve become used to each new generation of Australians enjoying a better standard of living than the one that came before it. Until now. Today’s young Australians are in danger of falling behind.

A new Grattan Institute report: Generation gap: ensuring a fair go for younger Australians, reveals that younger generations are not making the same economic gains as their predecessors. Economic growth has been slow for a decade, Australia’s population is ageing, and climate change looms. The burden of these changes mainly falls on the young. The pressures have emerged partly because of economic and demographic changes, but also because of the policy choices we’ve made as a nation.

Older generations are richer than before; younger ones are not. For much of the past century, strong economic growth has produced growing wealth and incomes. Older Australians today have substantially greater wealth, income and expenditure compared with Australians of the same age decades earlier.

Australia’s Household, Income and Labour Dynamics Survey (HILDA) provides the details.

Under the heading: Income levels and income inequality it reads:

Mean and median household disposable incomes grew very strongly over the eight-year period from 2001 to 2009. Expressed at December 2017 prices, the mean increased by $19,773, or $2,472 per year; the median increased by $19,422 over the same period. Most of this growth in fact occurred between 2003 and 2009, when both the mean and median grew by approximately $3,000 per year. However, since 2009, growth in both the mean and median has been much weaker. Over the eight-year period from 2009 to 2017, the mean household income grew by only $3,156, or 3.5%, while the median in 2017 was $542 lower than in 2009 (having fallen between 2009 and 2011, risen in 2012, and remained broadly unchanged thereafter).

However, the Bureau of Statistics managed to confuse the issue by asserting: Inequality stable since 2013-2014, but failed to back its conclusion with data. Commenting on the Bureau’s assertion in ABC News, Stephen Long and Michael Janda noted that ”average (mean) household wealth has been climbing quickly whereas typical (median) household wealth has not, implying that the rich are getting richer much more quickly than Australians in the middle”.

Writing in an article in The Conversation: Inequality is growing, but it is also changing as Australia’s super rich evolve Salvatore Ferraro of RMIT University said:

Over the course of the 20th century, income equality has been U-shaped, a point noted by French economist Thomas Piketty and Australia’s Productivity Commission.

In Australia, the income share of the top 1 per cent peaked at 14% in 1950, then fell to a low of 5% in the early 1980s before climbing again to 9% by 2015. Wealth inequality has also followed a long term U-pattern, and in many countries wealth is even more concentrated than income. The Productivity Commission finds that in Australia, a person at in the top 10% of wealth distribution has 40 times as much wealth as a person in the bottom 10%. That person has four times as much income.

In another article in The Conversation titled Inequality in the OECD is at a record high – and society is suffering as a result Mike Brewer, professor of economics at the University of Essex, begins:

When high levels of inequality are pointed out, a common response is that the “politics of envy” are being deployed. I heard the phrase myself when I tweeted recently that the share of income going to the richest 0.01% of adults in the UK was almost at a record high, based on my new analysis of UK tax data. After taking a few months out to write a book on what we know about economic inequalities, I was struck by the enormous amount of research showing how harmful inequality is for people. It’s increasingly clear that high levels of inequality damage our health and well-being, harm social cohesion and levels of trust, and act as a brake on economic performance. And there is increasing evidence that inequalities dramatically tilt the playing field for future generations.

Indeed, there is an emerging field of inequality research: Health inequality, pioneered by Professor Sir Michal Marmot. He has shown in his reviews how profoundly health and disease are modulated by inequality in income and wealth, and how health inequality has worsened since his first review in 2010. Health and well being are powerfully determined by whether we are well-off or poor.

In another article in The Conversation: Don’t believe what they say about inequality. Some of us are worse off Professor Peter Whiteford at the Crawford School of Public Policy at ANU writes:

If you were going to reduce a 150-page Productivity Commission examination of trends in Australian inequality to a few words, it would be nice if they weren’t “ALP inequality claims sunk”, or “Progressive article of faith blown up” or “Labor inequality myths busted by commission”. The editorial in the Australian Financial Review of August 30 says questions about whether inequality is increasing are “abstract”, taught in universities as “an article of faith”, and a “political truncheon”.

The Productivity Commission report adds to a growing pile of high quality research on trends in income distribution in Australia, including a recent Australian Council of Social Service (ACOSS) and University of New South Wales study using data from the Australian Bureau of Statistics (ABS) that provides an in-depth analysis of income and wealth inequality in 2015-16 and an analysis of trends since 2000. The Productivity Commission survey takes the deliberately ambitious approach of assessing a wider range of outcomes than income, including indicators of household consumption and wealth, their components, and changes over time and in response to events such as transitions to work, divorce and retirement.

We often hear about Australia as a ‘miracle economy’ enjoying 27 years of economic growth. In fact, the Commission report shows real net national disposable income per person – a better measure of individual economic well-being than GDP – actually fell in six out of the last 27 years.

There are a number of telling graphs in this article that would reward your attention.

In his valedictory address on leaving the public service, as if to leave a telling message for the political class, outgoing secretary of the Prime Minister’s Department Martin Parkinson condemned ‘entrenched disadvantage’ in Australia:

Our history has bequeathed a degree of entrenched disadvantage that should be seen as a disgrace in any country, but particularly one as developed as Australia.

More than half of those in the bottom decile in 2000 were still in the lowest 20% 15 years later. Ideally, people should only be at the bottom of the income distribution spectrum temporarily due to life events, not whole families and communities sentenced to it for generations. If you want a single thing to blame for the disadvantage we see in Australia, particularly in our remote areas, look no further than an understandable lack of hope.

While neoliberal thinkers might regard inequality as the ‘normal’ state of affairs, of interest only to political tragics, recall the Occupy Wall Street movement that mobilized thousands of people in September 2011 in Zuccotti Park, New York. The issues that motivated this movement were social and economic inequality, greed, corruption and the undue influence of corporations on government, particularly from the financial services sector. Eventually forced out of Zuccotti Park, protesters turned their focus to occupying banks, corporate headquarters, board meetings, foreclosed homes, and college and university campuses. These ordinary people saw the devastating effects of inequality, and insisted on having their opposition to it heard.

Inequality pervades the social side of society too. Homelessness is perhaps the commonest form of social inequity, now affecting so many young people. Gender inequality is rife. LGBTQIA folk experience inequality in all its social forms. They fight for recognition and a fair go, form associations to marshal support, and use social media to counter the criticisms they suffer. Too often their voices are ignored.

Need I say any more? There is abundant evidence of extreme inequality the world over in wages, wealth, opportunity, housing, social status, gender recognition, health and well-being. It’s a yoke on society that burdens us all. Sadly, it’s likely to worsen, not improve.

Is the political class capable of reversing this downward trend? Do they really want to try? I really do wonder!

 

This article was originally published on The Political Sword.

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12 comments

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  1. Phil Pryor

    All the people producing anything must be involved in the results and products and outcomes. Shareholders are well off nobodies doing F All in the process, except for buying a bet. Original owners, financiers, management and staff are the people involved in production, distribution, sales results, profits (or not) and must be sharing and caring together. Capitalist cunning has seen the wrong people too often profiteering in a perverted way from the efforts of people actually connected in the effort. e g, Amazon workers should be paid handsomely from Amazon profits which are the result of their work. Never mind the luck, fortune, fuckwittery, cunning, of the original betting punters in life. They get plenty anyway out of control of manipulating corporate shareholding concepts. Daily, the workers work to get in the money and should be paid and looked after very well for the overall success. Bezos and similar are dollar a day pricks anyway. Some bread and water should be the compulsory diet for corporate scoundrels. Everyone in corporate luck should do well.

  2. RomeoCharlie29

    And this week new figures reveal the obscene levels of executive remuneration. In what possible universe should Alan Joyce, QANTAS CEO be paid $24 million? When the government doubles down on its persecution of welfare recipients and pensioners while ignoring such blatant abuses it is time for a revolution.

  3. Ad Astra

    Folks
    Thank you for your contribution to this subject.

    Can anyone explain why are the ABS and the Productivity Commission are deliberately downplaying the verifiable fact that inequality is increasing? Is this at the direction of the government officials overseeing these instrumentalities? Do they feel the need to deny this uncomfortable truth, which reflects so badly on their administration?

    The statistics show the wealthiest households are getting a growing share of household wealth. The Productivity Commission is trying to tell us they are not. Read this telling piece in The Conversation: It’s not just the ABS. It’s also the Productivity Commission downplaying the growth in inequality: https://theconversation.com/its-not-just-the-abs-its-also-the-productivity-commission-downplaying-the-growth-in-inequality-104135

    We have a dishonest government, and its mendaciousness is infecting the public service. Remind you of Nineteen Eighty-Four?

  4. Nedi

    Anyone under 35 should leave Australia with Lambie and the LNP
    ready to enslave them with conscription for bushfires and then War with Iran.
    We have indentured slaves for the dole
    with threats of no access to money.
    Wake up slaves. This is Jamestown slavery 2.0.

    Australia is an old people paradise who sit around comming up with new ways to take freedoms away from anyone who isnt a privellege Boomer. A mass exodus of under 35s would send a message to Canberra. You can have it all and young people dont care because they left.

  5. Matters Not

    RE:

    Do they (the government) feel the need to deny this uncomfortable truth, which reflects so badly on their administration?

    Yes. But for how long? Only a matter of time that this rising inequality is seen as somehow natural and right. What with the ‘prosperity gospel’ – our model of the good society being the United States etc. Seems like The Sleeper will not Awake as pointed out by Ellul and others.

  6. Wam

    A sad read even when I have little understanding of the topic, beyond suspecting that if we are poor we don’t know it because as long as we can see people poorer, we can cope. 45 years ago I picked up a student from Rockhampton Downs. It was January, rainy and the camp conditions were shockingly poor to me but not to her.
    I remember stiglitz praising swan and tried to explain the difference between protecting the banks and protecting our deposits in the banks but I just copped the rabbottians msm driven mocking of my support for the shit foreigner.
    The massive area of debt that stems from the tertiary sector that has exploited a bums on seats approach to accessing billions of HECS and labor’s vet loans cash is my worry. I remember railing against the rabbott giving institutions, like the one who gave his daughter a $50k scholarship, access to the education trough. I wonder how many gullible students are gathering debts in those institutions that can never be paid. How many women marry have a family whilst hubby pays his debt hers accumulates interest then he pisses off and she’s saddled. A skills future system no debt should be labor’s plan.
    The next royal commission should be on company Rory’s, like wife’s names, using dick smith when it was Woolworths who sold it to the dogs who used the name to steal millions from Australians and how a little Irishman can get $24m.
    ps
    The list of commissioners on the gov website makes an interesting read and why not ask them ad astra?
    media@pc.gov.au

  7. Tim Haslam

    A sad read. My initial reaction is to say increase taxes on higher incomes. I’m no expert but am I correct that countries that have the highest marginal tax rate, such as Denmark and Norway, have the highest overall rating of happiness and lowest rate of ‘suffering’ (as objectively defined by reasonable measures such as poverty, health problems etc) despite weather conditions that would seem adverse to happiness and conducive to suffering amongst the poor?

  8. Tim Haslam

    I don’t wish to offend anyone but I owe an apology to one of the correspondents to this thread for an incorrect statement, and unconsciously unfair attitude, I posted in a previous thread which I have just found I can’t use to offer said apology as it appears to have closed. Can anyone tell me if there is any way I can post said apology, either directly to the person or, if people won’t be offended, on this or another thread or forum?

  9. wam

    Tim seems ridiculous that people earning huge sums can mitigate the tax to zero.
    But it is disgusting to pay no medicare levy.
    Why not have everyone pay the levy on gross income, lees threshold, then we all pay??

  10. Patricia

    I am currently reading a book titled “Black Diamonds”, primarily about the rise and fall of the mega wealthy Fitzwilliam family in what was then Great Britain but is also about the social inequality of one group of workers, coal miners, brought about by the greed of coal owners. The book touches on the plight of other workers when describing the general strike and miners strike of 1926/27 but it’s main focus is on the disparity of power between coal miners and coal and pit owners. My point is that it seems that we are headed down the same road in the casualisation of work, the lessening of union influence and the disparity between workers who produce the goods and bosses who reap the benefits of that productivity. There is nothing new in workers being taken advantage of by unscrupulous business owners but it would have been nice if for once humans could have learned from past mistakes and moved onto some higher plane of interaction between those who work for a living and support the economy with their income and those who wilfully, in most cases, hoard money in the mistaken belief that it somehow empowers them and makes them more important. It is depressing to realise that the fights for worker equality and union representation that were fought in the early years of the 20th century are being fought once again in the early years of the 21st century and that when it comes to greed inspired inequality, in a hundred years, nothing much has changed. The attitude of our current government is no different to the attitude of the British government in the 1920’s and the results of that attitude will be similar unless there is a considerable change of attitude to workers contribution to a healthy and growing economy is recognised and acknowledged with the fair and equitable distribution of the wealth that workers produce by their efforts. Not my observation but the lessons from history that if ignored will be repeated. Workers are fairly tolerant of their pay and conditions being eroded over time as their focus is on providing for their families, but even they call time when the level of inequality is such that their ability to provide a decent life and future for their children, in that it impacts on their health and general wellbeing, is so blatant that they find they cannot provide the basics of life. Revolution is the end game when inequality leaves people no other option.

  11. Ad Astra

    Folks

    I have really enjoyed reading your comments, which add so much richness to the discourse about this crucial topic. Thank you for taking the time to add them.

    Patricia, I have succeeded in getting online access to a preview of ‘Black Diamonds’, which I shall read with interest.

    wam, how do I find the list of commissioners you mention?

  12. Charles D

    2 books on the cunning sophisticated Corporate takeover of modern society:
    Patrick Wood – Technocracy Rising, the Trojan Horse of Global Transformation 2014
    Chris Hedges – America, the Farewell Tour 2018
    Unfortunately, the fights for worker equality of the 20th Century didn’t extinguish the fires of feudalism.

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