But what about those who are less visible: the working poor, or those in abject poverty? Their stories, much less romantic, have been eclipsed by the tale of Australia’s remarkable prosperity. It is this parallel narrative – one of widening economic inequality – that is at the heart of Andrew Leigh’s ambitious treatise on social stratification in Australia.
Combining digestible anecdotes from pop culture and sport with thorough economic analysis, the Labor MP and former ANU professor of economics paints a lucid portrait of Australian society from the nineteenth century to the present day. Inequality rose throughout the nineteenth century to the 1920s – where it reached its apex – before declining significantly for five decades. This, Leigh notes, was due to an ‘important shift in the social compact’ as a result of the immense sacrifices made for World War II, which produced ‘a strong belief that the burden must be shared fairly across the community’. Significant economic reforms were made, including the federalisation of income tax, as well as the formalisation of a forty-hour working week almost a decade later. More Australians were able to afford cars as prices fell relative to wages. More importantly, postwar Australia bestowed ‘new opportunities’ in higher education, with many soldiers receiving university scholarships.
Perhaps more remarkable was the share of wealth held by what Leigh terms the ‘opulent’ stratum, defined by those earning incomes in the ‘top 0.1 per cent’. In the 1920s this class had a four per cent share of household income, Leigh notes, a figure that had decreased to one per cent by the 1980s. This egalitarianism was borne out by cultural factors, too: the nascence of the trade union movement played a significant role, as did the ‘romanticised notion of the bush ethos’ epitomised by the man from the Snowy River and Henry Lawson. But it was not a phenomenon experienced uniquely by Australia: Leigh cites examples from his research in New Zealand, as well as examples in the United Kingdom, United States, and Canada, which illustrate a broad downward trend of income convergence among developed nations until the 1980s. Today the opulent class has a three per cent of share of household income; the one percenters have a nine per cent share. This pyramid-shaped income distribution, Leigh writes, is how most Australians describe the state of our society, yet only a minority – some nineteen per cent – actively desire it.
Still, the spirit of Australia’s egalitarian social contract kicks on, in spite of a reversal in income equality. Lessons from the sporting arena are instructive. Leigh uses the example of rugby league’s split from rugby union. The latter iteration, we learn, ‘refused to allow player payments [and] was a fine game for private schoolboys, but no way for a working-class man to make a living’. In fact, it would seem that Australian sport encompasses a hardwired preference for egalitarianism. Why else, Leigh ponders, would so many Australian team sports have salary caps? Handicaps like these have a sort of redistributive mechanism, allowing for a more level playing field. The English Premier League, for instance, operates without a salary cap. The effects of the financial disparities are obvious: Manchester United, one of the richest sporting clubs in the world and worth some US$3.17 billion, has won twelve of the last twenty seasons. But in the Australian Football League it is an entirely different story: no team has won a premiership more than three times over the same time frame.
There is no doubt that equality makes sport a better spectacle. But conservatives and progressives are divided on its role in the social compact. Is inequality a natural phenomenon, as many libertarians and conservatives would have us believe? Or are we all born as equals, thwarted only by the malevolent influence of social and cultural institutions? This attitude to the welfare state, says Leigh, is a reliable indicator of whether one votes Labor or Liberal. But the distinction between the two parties has been eroded. Leigh notes the remarks made by Tony Abbott, who has said that ‘we have to be a productive and competitive society and greater inequality might be inevitable’. This statement, coupled with Gillard’s statement made in January this year, where she said that ‘fairness can only be funded through economic strength’, illustrates a bipartisan preference for market-based solutions to policy problems. But is it in the market’s remit to care about social mobility?
And perhaps it is the idea of mobility – rather than equality – that sustains the legend of the fair go. The ability to climb the class ladder is priceless, even if it is becoming harder to achieve in Australia, as Leigh demonstrates with his thorough citing of research linking higher equality levels with mobility. Indeed, it is the drivers of mobility that are most fascinating, if not controversial. Leigh names the three factors that determine a child’s chances in life: ‘money, parents, and time.’ Parenting style, Leigh writes, is highly influential in securing a socially mobile future, but we ‘tend to cringe at the idea that what we’re doing is transmitting privilege across generations’. He notes that family structure has a significant effect on a child’s mobility: evidence suggests a stable two-parent household provides a significant social advantage over households with a lone parent. There is even a style of parenting that encourages greater mobility, writes Leigh – what US sociologist Annette Lareau calls ‘concerted cultivation’ – that affords children a greater sense of entitlement and encourages them to address adults as equals. Lareau’s research suggests that this approach is culturally different from the parenting style used by working-class and low-income families. Leigh’s emphasis on poverty’s cultural dimension has complex implications for policy: for instance, how can governments legislate for stable relationships, or certain parenting styles, without adding stigma? Leigh suggests ‘light-touch programs’ that encourage stability or ‘concerted cultivation’ in disadvantaged households may be a way forward.
Conversations about culture are necessary, but they are politically fraught. It is hard enough to talk about tax reform. For all the elegant analysis Leigh provides, Battlers and Billionaires expresses these fairly urgent quandaries rather cautiously. The tone perhaps reflects Leigh’s own double-bind. As a politician, he knows that any dream of an alternative social architecture for Australia has electoral constraints. But as an economist, the data tells him that his dream of an ideal society is slowly disappearing from view. Here’s hoping that the nuance of Leigh’s vision isn’t drowned out by dog-whistling.