InCome Inequality in Australian Economy

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and drug addiction. A major consequence of income inequality is a widening division of social classes, which splits an economy into socioeconomic groups based on their level of income. Aubrey Perry states that: “growing divide in Australia between the rich and poor that threatens our peace and tests national character of country”. He feels that inequality in the Australian economy can lead to tensions may rising between the people that belong to different classes, (e.g. lower, middle and upper) leading to massive instability in a country’s economic and social, as this can lead to violence, boycotts and worker striking, which can lead to violent revolution. An example of the lower and upper classes clashing is in Russia in the early 20th century in which, due to this divide the Soviet ‘worker’ classes rose up in contempt and seized the country from the monarchy that had ruled for centuries, an inherently unequal system. Inequality among individuals creates higher levels of poverty, which traps people in a situation with limited earning opportunities and low incomes, which leaves them unable to ascend in terms of rising through social classes – an issue explored in many pieces of literature throughout history, a notable piece being “Great Expectations” by Charles Dickens, documenting what problems lower class individuals have to face to be able to do something meaningful. Trapping people in a vicious cycle of low incomes and limited economic opportunities. This has a direct correlation to increased levels of crime, suicide, disease and reduced life expectancy in areas where poverty and individuals of lower classes are residing.

In conclusion, the cost and benefits of inequality, both in economic and social spheres are quite few and far between but each can have a significant impact on the economy. However, this has its costs and it leaves quite a lot of people to end up in poor situations, which affects their living conditions and general wellbeing.