Karnal wrote on Feb 14^th, 2014 at 4:28pm:



tease 

St George of the Garden wrote on Feb 14^th, 2014 at 9:03pm:


I don't think, from your perspective, the analogy is a good one. The Idiot is about a passive, good-natured individual who is regularly on the receiving end of ridicule and is often taken advantage of.

Postmodern Trendoid III wrote on Feb 15^th, 2014 at 12:04pm:

Over analysing that a bit, Misty!

sir prince duke alevine wrote on Feb 14^th, 2014 at 1:02pm:


Sorry, Alevine, I might have missed this post.

I checked the link and the graph. Yes, in some years in the 2000s, low incomes fared worse than middle or high incomes. In other years, however, they rated about the same. In one year - 2002/3, low income wages had the highest growth.

Overall, it looks like high incomes received the highest levels of growth in comparison to middle and low incomes, but these figures are in the single percent range, generally a one or two percent difference. 2007/8 is the highest year with high incomes rising about 5% higher than middle incomes.

What is important in terms of quality of life - the ultimate aim of economics - is that ALL groups had growth in real wages between 1996 and 2007. This is an important achievement, showing a historic rise in prosperity in Australia.

And contrasting the trend in the US and developing world, ALL income groups benefited and shared in.the wealth.

On the high income groups, you would expect them to do better as they have a greater pool of investment. Low income groups spend most of their money on consumption. High income groups are able to invest more, and profit from the interest. 

The biggest change in levelling investment in Australia was the introduction of employer-paid superannuation. This mandatory pool of savings influenced the overall rise in wealth from 1996 on - particularly in the lower income groups (although super does not count as income and has no bearing on the figures we’re discussing). The drop in real wage rises in 2007, of course, was the influence of the GFC. There, the high income earners experienced the biggest drop, but again, only by a percentage point or so. 

Overall, Australians who work have all shared in the prosperity of the last 2 decades, and this shows socially, I think, in the increasing conservatism of low and middle income groups, who were once Labor voters.

The challenge in Australia, I think, is how to include the underemployed - those trapped in intergenerational welfare dependance. This group has not benefited from the rise in wealth in this country. They have suffered a huge drop in real income as rent rises hit and Newstart payments remained the same.

But in comparison to most of the world, such a level of inequality does not compare. We have few "working poor" in Australia - unlike the US and developing world, where this group is massive. In many countries, this group consists of the majority of the population.

While boring, numbers are important. What the numbers show, I think, is that Australia has been in a much better state than the rest of the world, and far more equal and inclusive. However, this has come on the back of increasing global inequality as we outsourced our low wage/skilled jobs - we simply sent our inequality overseas.

Karnal wrote on Feb 15^th, 2014 at 1:25pm:



2 interesting cases.

one, a chinese neighbour of mine who has employed a fulltime tutor to get his sons assignments done and hold his hand thru uni.
"i dont care what it costs, that boy is getting a degree "

two, a barrister i know whose son was at brisbane grammar paying $25,000 a year. he chose it as it is the dearest. he found out church of england grammar school was charging $28,000 and nearly moved the boy.
"i want my son in the dearest school in brisbane, so he only assocaites with winners"  a strange market model that the more you charge, the happier the client is to pay.

thirdly, i work in a very very poor area. the teachers are very good. 3 kids from the class of 2010 are doing medicine. these kids will leave the suburb undoubtedly. As it is a ghetto, mentally ill and drug addicts will take their houses.
you see the ghetto kids do much better at school then you'd give them credit for. the problem with looking at an urban ghetto and saying there is not 'equality of opportunity" is more complex than at first glance. there is very good opportunities in the ghetto for anyone who cares to take it.....the opportunity to get out

aquascoot wrote on Feb 15^th, 2014 at 1:36pm:


Very true. Which is why we need to.stamp out ghettos.

Karnal wrote on Feb 15^th, 2014 at 1:47pm:



.,

we must spread the public housing throughout the suburbs.
a nice little brick and tile dog box next to kirribilli


no that wouldnt work.
imagine if some of those rich inner city, urban trendy greens actually got some ghetto dwellers dumped next to them.
the cries of "terra nullis" and "crocodile tears for somalians " would probably cease, at least.

Karnal wrote on Feb 15^th, 2014 at 1:23pm:


Hi Karnal. I agree that the most important factor is to see real wages growth across all wage groups, and I also agree that in comparison to the world, our level of inequality does not compare. But I again will point out that we can't simply use this measure to justify our overall inequality across the groups. Comparing Australia to a country like India, for instance, is like comparing Oranges with Apples.  Yes, comparing us to the USA tells us that we are miles ahead in this field. But if we compare ourselves to the Scandinavian countries? We are miles behind. And we must always look at how we can improve, as opposed to how we are doing in comparison to someone worse.

So in saying that, the way forward as I see it, is to work on government policy that further equalises the share of wealth across where the majority of the population is.  Decrease the low income group and bring them into the middle class. And ensure real wages growth in the middle class occurs more so than in the upper class.

The upper class will exist, and by all means I have no animosity for people trying earn as much as they can - if that makes them truly happy, then whatever. But society is like a uni course or high school course; it should work on a standardised bell curve. Hence government policy should be on that, as opposed to currently being all about increasing the wealth of the rich, and blaming the poor for their own predicaments.