Inequality is about more than just who has the money

Rising inequality in Australia needs a new understanding of how people live, not just economics.

“No one held back, no one left behind”. That was one of the hallmark commitments from the Albanese government when it won the 2022 Australian federal election.

Leave no one behind is also an underlying principle of the 2023 Agenda for Sustainable Development adopted by the United Nations in 2015. 

Yet today, wealth inequality continues to escalate in Australia. The rich are getting richer while the poor are getting left behind.

The wealthiest 20 percent of households have 90 times the wealth of the lowest 20 percent, and hold 82 percent of the value of all investment property.

Thirteen years before Anthony Albanese made his pledge to the Australian people, The Spirit Level, by UK academics Richard Wilkinson and Kate Pickett, fundamentally challenged and changed our understanding of inequality by demonstrating that rising income inequality was also linked with rising health, social and environmental problems. 

Now they have published a report on the Spirit Level 15 years on to show that not enough has changed and there needs to be bolder confrontation of systemic inequality.

They argue that “biased public policies and flawed economic systems are serving a few wealthy people at the expense of the wellbeing of people and the planet”. 

Wealth accumulation does not mean the wealthiest have only economic security, they also have readier access to high-quality education, health and housing. 

And we see these divides between the haves and have nots pointedly increasing in Australia. 

For instance, over the last 20 years inequality grew sharply among younger households mostly because of unequal access to home ownership. 

The average value of owner-occupied housing held by the highest 10 percent rose from $391,000 to $734,000, while the average value of owner-occupied housing for the lowest 60 percent rose from just $10,000 to $12,000 – that is, very few were purchasing their own home.

Inequality and inclusion beyond economic measures

This data emphasises the impact of inequality on economic aspects of life in Australia. 

While this is important and necessary, relying only on economic measures obscures needs that are inherent to the fabric of social life and social cohesion.

A sense of belonging, feeling valued and being heard are not easily quantified but should be considered in addressing inequality. 

In the Spirit Level,  Wilkinson and Pickett pointedly show that democracies with high levels of inequality also have high levels of distrust in their governments and precarious social cohesion.

The intersection of public sentiments of trust, inclusion and participation is essential to frame responses to inequality. 

A recent survey of the Australian public shows significant relationships between participation in social activities, higher satisfaction and trust in democracy.

Lack of trust in government and public institutions can result in popular disaffection and disillusionment with mainstream politics, destabilise political systems, and hinder the functioning of democracy. 

Recognising the global challenge of ensuring stable democratic processes, Australia signed the Luxembourg Declaration on Building Trust and Reinforcing Democracy in 2022.

The importance of these dimensions of social and political equality are recognised in some recent Australian government responses. 

For example, the Australian government’s Wellbeing Framework emphasises inclusion, equity and fairness as cross-cutting themes, noting the eroding impact of high inequality on social cohesion. 

The NSW Treasury highlights the importance of income inequality in creating a sense of social injustice, distrust and stymying economic and social participation. 

And last month’s  launch of a new report on the threats to Australian democracy led the former Minister for Home Affairs Claire O’Neill to point out that the promotion of social cohesion meant: “It’s about being willing to listen, understand and respect different points of view”.

Sharing stories can provide new tools 

These indicators and trends are all vitally important to understanding and addressing rising multidimensional inequality. 

But further work is needed to connect the issues of trust, participation and inequality to increase fairness in Australian society. 

Our understanding needs to be informed by the social, historical and political constructions of our societies and a focus on the dominant narratives about why and how our world works.

In this time of growing inequality and new patterns of social exclusion, new stories will emerge to explain and challenge these changes. 

Research can be used to reimagine what a fairer future looks like where all Australians have dignity, respect and the opportunity to participate economically, politically, and socially. 

The use of shared stories, communications and framing research together with research on economic inequality, are important for reimagining fairness. For example, the Joseph Rowntree Foundation in the UK recently used experiences of poverty that were reframed to focus on people and community’s strengths and adaptability, not deficits and disadvantages.

Excessive and rising inequality entrenches disadvantage and has a profound impact on Australia’s social, political and economic life. 

As Spirit Level 15 years on points out, addressing inequality and leaving no one behind, is not only about finding the right economic setting for policy, but also about positive social change. 

Economic understanding of inequality is  necessary but not sufficient to act on inequality and help us define what fairer futures and opportunities for Australia might be. 

Our understanding of inequality needs to be informed by the stories we construct to explain our situation, and a clear framing of what a fairer world will provide to all society. 

Carla Treloar is Scientia Professor at the Centre for Social Research in Health and the Social Policy Research Centre, UNSW Australia. She is a leading international expert in social research in health in marginalised groups with a focus on stigma and trust in health and social care systems.

Ariadne Vromen is Professor at the Crawford School of Public Policy at ANU. She has a longstanding interest in citizen engagement and political inequality. Her new co-authored book Story Tech: Power, Storytelling, and Social Change Advocacy will be published soon.

Rachel Ong ViforJ is John Curtin Distinguished Professor and ARC Future Fellow at the School of Accounting, Economics and Finance, Curtin University. Her research interests include intra- and intergenerational housing inequalities, housing affordability dynamics, and the links between housing and the economy.

Surya Deva, Macquarie University; Justine Nolan, UNSW; Greg Marston, the University of Queensland and Miranda Stewart, the University of Melbourne also contributed to this report as part of an ongoing collaboration.

Originally published under Creative Commons by 360info™.