Inequity and Inequality Study Notes

Acknowledgement of Country

The Wadjuk Noongar people are acknowledged as the traditional owners of the land. Respect is paid to Elders, past, present, and emerging. This land was never ceded; it always was and always will be Aboriginal land.

Equality vs. Equity

There is a fundamental distinction between the concepts of equality and equity:

  • Inequality: This is defined as the unequal distribution of social, political, and economic resources within a social collective, such as a nation. Inequities are often the cause of inequality. While inequality is not always avoidable, addressing inequities involves removing avoidable barriers to minimize these disparities.
  • Inequity: This refers to a lack of justice or fairness within a community. Inequities are considered avoidable.

Social Stratification

Social stratification is the existence of a systemic hierarchy of inequality. It is usually based on social variables such as age, class, ethnicity, or gender and persists across generations. All socially stratified systems share three basic characteristics:

  1. Rankings: These apply to social categories of people who share common characteristics.
  2. Life Experiences: People’s opportunities and life experiences depend heavily on the ranking of their social category.
  3. Persistence: The ranks of social categories tend to change very slowly over time.

The Sociology of Inequality

Social inequity and inequality are central focuses of sociological study. Key questions explored include:

  • What kinds of resources does a society value?
  • Which groups exert the greatest control over the distribution of these resources, and how is this control achieved?
  • What are the effects of differences in opportunity and outcome on individuals' lives and on social institutions and organizations?

Social inequality does not arise naturally from innate human characteristics. It is a human creation. While humans differ in intelligence, creativity, and motivation, there is no direct correspondence between these traits and the distribution of societal resources. Instead, inequality is socially constructed from social conditions reflecting historical arrangements, values, and the ability of some groups to dominate others.

Strategic Sociological Concepts

Several core concepts are used to understand the mechanics of inequality:

  • Power: The ability to shape one's own life and the lives of others. It involves strategic advantages enjoyed by some because they possess attributes or resources valued by society.
  • Positionality: The social and political context that creates an individual's identity and influences how they perceive and are perceived by the world.
  • Status: Differences in social honor or prestige. These become the basis of social hierarchy through processes of social exclusion.
  • Life Chances: These are the chances that individuals and groups have of obtaining desirable attributes or resources such as wealth, power, and prestige.

Inequality in the Australian Context

Australia is a society characterized by significant and persistent social and economic inequalities. These inequalities are critical in determining the kind of society Australia is and the life experiences of ordinary Australians. While the political rhetoric of the "Fair Go" suggests there is a fair go for those who "have a go," many Australians feel they have lost hope in this ideal.

Economic Inequality: Income and Wealth

Economic inequality is split into two primary categories: income and wealth.

Income Inequality

Income inequality is the unequal distribution of income in society. The three main sources of income are:

  1. Wages and salary.
  2. Investments and superannuation.
  3. Social security payments.

Wealth Inequality

Wealth inequality is the unequal distribution of wealth. The five main sources of wealth are:

  1. The main home.
  2. Superannuation.
  3. Shares and other financial assets.
  4. Investment real estate.
  5. Other non-financial assets, such as cars.

Australian Income and Wealth Statistics (2023)

Data from McCrindle research highlights the following economic disparities:

  • Average Full-time Annual Earnings: $97,510\$97,510
  • Average Household Gross Annual Income: $121,108\$121,108
  • Median Australian House Price: $1,008,988\$1,008,988 (which is 10.3×10.3\times earnings).
  • Median Australian Unit Price: $596,771\$596,771 (which is 6.1×6.1\times earnings).
  • Income Distribution by Quintile:
    • The lowest 20%20\% of households earn just 4%4\% of all income (average $25,012\$25,012).
    • The top 20%20\% of households earn 48%48\% of all income (average $288,028\$288,028).
    • The average earnings of the top 20%20\% are 12×12\times those of the bottom 20%20\%.
  • Wealth Distribution by Quintile:
    • The average household net wealth is $1,042,000\$1,042,000.
    • The lowest 20%20\% own just 1%1\% of Australia’s national private wealth (average $35,100\$35,100).
    • The top 20%20\% own 63%63\% of Australia’s national private wealth (average $3,267,100\$3,267,100).
    • The wealth of the average household in the top 20%20\% is 93×93\times the average wealth of those in the bottom 20%20\%.

Factors Impacting Economic Inequality Growth

The current cost of living crisis disproportionately affects low and middle-income earners due to:

  • Interest rate rises, price hikes, and "shrinkflation."
  • Low wage growth.
  • Taxes that disproportionately affect low and middle earners.
  • Income support for unemployed individuals remaining below the poverty line.
  • Increasing casualization of the workforce.
  • Growing wealth gaps between generations.

Conversely, high-income earners benefit from rising interest rates on savings, increasing value in real estate and assets, and higher profits resulting from high prices and low wage growth.

Generational Wealth and Income Disparities

Wealth and income are unevenly distributed across generations in Australia:

  • Gen Y (Age 25-34): 15%15\% of population; average net wealth $353,800\$353,800 (5%5\% of national wealth); average income $128,180\$128,180.
  • Younger Gen X (Age 35-44): 14%14\% of population; average net wealth $692,600\$692,600 (11%11\% of national wealth); average income $147,524\$147,524.
  • Older Gen X (Age 45-54): 13%13\% of population; average net wealth $1,124,600\$1,124,600 (17%17\% of national wealth); average income $157,716\$157,716.
  • Younger Boomer (Age 55-64): 12%12\% of population; average net wealth $1,519,000\$1,519,000 (23%23\% of national wealth); average income $131,976\$131,976.
  • Older Boomer (Age 65-74): 9%9\% of population; average net wealth $1,673,800\$1,673,800 (26%26\% of national wealth); average income $75,400\$75,400.
  • Builder (Age 75+): 7%7\% of population; average net wealth $1,167,000\$1,167,000 (18%18\% of national wealth); average income $54,340\$54,340.

Poverty and Social Mobility

Social mobility describes the relationship between the socio-economic status of parents and their children in adulthood. In Australia, generational poverty is a significant issue where early experiences of poverty persist throughout life due to:

  • Lack of resources to invest in children's education.
  • Low education leading to limited employment prospects, poor health, and exposure to environmental hazards.
  • Lack of resources to pass on to the next generation.

Poverty Statistics in Australia (2023)

  • 11 in 88 people live in poverty, including 11 in 66 children.
  • 62%62\% of households where the main earner is unemployed live in poverty.
  • 60%60\% of households reliant on JobSeeker payments live in poverty.
  • 52%52\% of public housing tenants live in poverty.
  • 34%34\% of sole-parent households live in poverty.
  • 25%25\% of people with disability live in poverty.
  • 18%18\% of households where the main earner is a woman are in poverty, compared to 10%10\% where the main earner is a man.

Global Economic Inequality

Global economic inequality refers to systemic differences in wealth, income, and working conditions between countries. The global economy is a capitalist system where economic inequality drives issues like famine, poverty, and health crises.

World Systems Theory

According to Wallerstein (1974), the world is a single global economic system with interdependent but unequal elements:

  • Core: Economies that benefit most from the world system (e.g., USA, Western Europe, Australia).
  • Periphery: Provides raw materials and cheap labor to the core (e.g., Vietnam, Indonesia).
  • Semi-periphery: Exploited by the core but exploits the periphery (e.g., South Korea, Mexico, Brazil).

Global Wealth Distribution (2023)

  • The richest 1%1\% own 43%43\% of the world’s wealth, while the poorest half own only 0.75%0.75\%.
  • 8181 billionaires have more wealth than 50%50\% of the world combined.
  • 1010 individual billionaires own more than 200200 million African women combined.
  • Billionaires earned approximately $2.7\$2.7 billion per day post-pandemic during a global cost-of-living crisis.

Health Inequality: Key Drivers

Health inequality is driven by geographic location, Indigeneity, gender, and poverty.

Geographic Location

Remoteness affects access to health and social care. Rural and remote communities often feature:

  • Older populations with lower education and less income.
  • Higher cost of delivering services and limited infrastructure.
  • Low population density leading to geographic spread of services.

Indigeneity

Aboriginal and Torres Strait Islander populations face significant health gaps:

  • Life expectancy gaps of 8.88.8 years for men and 8.18.1 years for women.
  • Higher rates of comorbidities including cardiovascular disease, respiratory disease, kidney disease, and diabetes.
  • Higher rates of mental distress and substance abuse.

Gender-Based Health Risks for Women

  • Women at all life stages are at greater risk of mental ill-health than men; mental health disorders are the leading cause of disability for Australian women.
  • 43%43\% of women have experienced mental illness.
  • Indigenous women experience higher rates of comorbid conditions such as diabetes and breast, cervical, and ovarian cancers.
  • Eating disorders are the third most common chronic illness among young women.
  • Women are less likely to receive appropriate treatment for heart disease because symptoms of a heart attack are less likely to be recognized in women than in men.
  • Cardiovascular disease rates are 1.5×1.5\times higher for women in remote areas versus urban areas.
  • Women are 1.6×1.6\times as likely as men to suffer coexisting mental and physical illness.
  • 87%87\% of women aged 6565 and over have a chronic disease.
  • 61%61\% of people living with dementia are women.
  • Migrant and refugee women face greater risks for poorer maternal and child health outcomes.

Poverty and Health

Poverty leads to decreased access to nutrition, increased exposure to environmental hazards at work and home, and lower health literacy resulting from lower education levels.

Perpetuation of Inequality

Inequality is maintained because it is built into the structures of society through:

  • Power and Status: Hierarchies that grant strategic advantages to specific groups.
  • Reduced Social Mobility: Intergenerational inequality prevents upward movement.
  • Societal Beliefs: Inequality is often entrenched in norms, biases, and values that favor certain positions and life chances for some while restricting them for others.