Evidence and perceptions of inequality in Australia

• John Western, Jenny Chesters
• Centre for Economic Policy Research

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15 March 2010Following the increasing impact of globalising economic forces world wide Australia, like many other liberal democracies, moved to adopt neoliberal economic policies with an emphasis on increasing deregulation of economic markets. The economic changes instituted since the 1980s have fundamentally restructured the economy and created a more flexible labour market. Jobs growth has been concentrated in industries that rely heavily on casual and part-time workers. Consequently, the proportion of all jobs that are permanent and full-time has declined.

In this paper, we are interested in how these changes have affected the level of income and wealth inequality within Australian society. Although there is a general agreement amongst researchers that there has not been a significant increase in inequality in regard to either income or wealth between the 1980s and the 2000s, some researchers argue that earnings inequality has increased. There is also evidence of a mismatch between objective measures of inequality and the perceptions of the Australian people, with a significant majority of respondents in a national survey conducted in 2005 believing that Australia had become a more divided and less fair society since the 1980s. The present paper examines these disparities and attempts to account for them.