Less inequality, more social mobility

If levels of inequality and income distribution by the state have little or nothing to do with social mobility, please name three “high inequality” or “small state” countries with comparatively high social mobility? Could he please explain what he thinks the drivers of high mobility are in Sweden and other societies which rank highest in the OECD?

That is the question posed to Nick Clegg on Next Left in response to his Hugo Young Lecture. It’s a very good question and one that isn’t asked enough, especially in Australia.

Greater equality of opportunity and improved upward social mobility have been cited as key public policy objectives by Labor ministers yet we hear little about the need to reduce of income inequality to achieve this.

There is growing evidence of the relationship between greater income equality and improved social outcomes such as greater social mobility, most notably from The Spirit Level.

The following graph from the Equality Trust on highlights this.

Social mobility

The Spirit Level is not alone in identifying the correlation between more inequality and less social mobility.

It shows that Jon Cruddas was spot on when he stated:

Wide disparities of wealth create a maldistribution of opportunity, which no amount of supply side tinkering can compensate for.

The most recent ABS data shows that inequality in Australia has continued to increase. Between 1997-98 and 2007-08 there was an absolute increase in the Gini Coefficient of 9.2% and a fall in the share of total national income by low (6.5%) and middle income earners (4%).

While nowhere as unequal as the United Kingdom or the United States, income inequality in Australia should be of concern and its continuing growth needs to be addressed. All this should make Labor policymakers reconsider their priorities.

How income inequality gets on the political agenda is an entirely different question. Maybe there needs to be some external intervention. Kevin Rudd received the Spirit Level from the Archbishop of Canterbury so maybe someone should slip Julia a copy for Christmas.


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