Distribution of Income and Wealth Essay Example
Economics
Written report – distribution of income and wealth
Introduction For several years, Australia has achieved steady economic growth, higher productivity growth, low inflation, and falling levels of unemployment. They have changed the structure of their economy which played an important role in creating a more efficient and competitive economy. One of the major challenges of the government policy was equal distribution of income and wealth between different groups in society. Government should ensure that it doesn’t happen that only those who are financially well off are benefited from the economic prosperity, which can increase the degree of inequality in income and wealth and make the society divided.
Australia has often been regarded as an egalitarian society in which the income and wealth are equally distributed. However, according to the statistics, Australia is one of the less equal societies in the industrialized world. In 1990’s, the level of inequality in Australia’s income and distribution surpassed that of most OECD countries, and over the 2000’s, the inequality has been worsened because of a sustained reduction in the level of unemployment, the expansion of compulsory superannuation and government policies to redistribute income to lower income households.
Part 1
The economic and social consequences of income inequality As the inequality in Australia’s income and wealth increases, not only are there disadvantages but there are also some advantages associated with it.
■ Benefits of inequality It is argued that inequality is a natural consequence of the free market economy in which the individual income and wealth are decided according to their marginal productivity. As people know that they can make more money than other people does if they work harder in the free market economy, the inequality encourages them to work harder to change their position in the distribution of income.
• Economic benefits of inequality.
Written report – distribution of income and wealth
Introduction For several years, Australia has achieved steady economic growth, higher productivity growth, low inflation, and falling levels of unemployment. They have changed the structure of their economy which played an important role in creating a more efficient and competitive economy. One of the major challenges of the government policy was equal distribution of income and wealth between different groups in society. Government should ensure that it doesn’t happen that only those who are financially well off are benefited from the economic prosperity, which can increase the degree of inequality in income and wealth and make the society divided.
Australia has often been regarded as an egalitarian society in which the income and wealth are equally distributed. However, according to the statistics, Australia is one of the less equal societies in the industrialized world. In 1990’s, the level of inequality in Australia’s income and distribution surpassed that of most OECD countries, and over the 2000’s, the inequality has been worsened because of a sustained reduction in the level of unemployment, the expansion of compulsory superannuation and government policies to redistribute income to lower income households.
Part 1
The economic and social consequences of income inequality As the inequality in Australia’s income and wealth increases, not only are there disadvantages but there are also some advantages associated with it.
■ Benefits of inequality It is argued that inequality is a natural consequence of the free market economy in which the individual income and wealth are decided according to their marginal productivity. As people know that they can make more money than other people does if they work harder in the free market economy, the inequality encourages them to work harder to change their position in the distribution of income.
• Economic benefits of inequality.