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The gap separating Australia (How 'birth lottery' undermines the…
The gap separating Australia
There is a gap
Stats:
top 20% of Australians have a disposable weekly income 5 times greater than the bottom 20% (3 485-637
top 10% of Australia have 45% of Australia's wealth
How inequality harms the economy
Rent-seeking behaviour
Occurs
'when an individual or business attempts to make money from its resources without using those resources to benefit society or generate wealth (one of the most common ways is by using capital to influence politicians)'
-Investopedia, 2018
undermines the fairness of political institutions
Not actually socially productive but still capable of generating very high private incomes-Walters, 2014
Drives inequality in rich countries (like Australia) --it is parasitic
business interests and interests of poor people can coincide
less rights for poor people
If rent-seeking sectors are brought down to size > there will be no conflict between incentives for production and reproduction > equity can be improved without creating a disincentive for production by reducing parasitic sectors and actually making it easier for producers
How 'birth lottery' undermines the fairness of the economic system
children from low socio-economic classes do not have great social mobility because of their situation
All parents undoubtedly want their children to flourish. With limited resources however, this is not possible. Some families do not play on the same playing field (Kalil, 2016)
Income inequality can affect access to high-quality education, neighbourhoods, schools and other settings that help build children's education skills and attainments
Naturally, families of the top quintiles spend more money on enrichment goods/services than families of the bottom quintiles, as reflected in multiple surveys in the US between the early 1970s and 2005-2006.
The attention and care given to childrens' education provides a cognitively stimulating and emotionally supportive home environment which encourages early learning and behavioural adjustments
Economically advantaged parents are able to provide more in many aspects of parenting
Economically advantaged parents perhaps know that parental investments in early childhood are vital ingredients in childrens' long-term success perhaps more than their less economically advantaged counterparts.
According to a study conducted in the US by Betty Hart and Todd Risley, children of professional families heard an average of 2 153 words per hour, while children of welfare-recipient families head 616 words/hour. By age 4, children of welfare-recipient families heard 32 million words less than their fellow classmates from professional families
unequal opportunities
Solution
Taxing people in the top socioeconomic classes
redistributes income more fairly
Benefits for the lower quintiles can supplement their incomes so that parents of these quintiles can provide a similarly cognitively enriching environment
Most children enter the workforce with similarly equal opportunities
Children have greater social mobility
Social inequality can be closed