[NS]Errinundera
06-06-2006, 10:47
On Australia's national broadcaster this evening was an opinion piece about equality of opportunity. It makes the argument that economic mobility is dependent on two things: 1) freeing up of markets; and 2) social investment.
It's a thoughtful commentary:
Australians are strong believers in individual responsibility and self reliance. But they also care deeply about equality of opportunity - the notion that everyone should have an equal chance to achieve their full potential, irrespective of their social background. It is the essence of what we mean by a "fair go".
The extent of equality of opportunity in a society can be assessed by following the same group of individuals over a long period of time and observing the ease with which they are able to move up the social hierarchy. In this way we can measure the degree of what we call "income mobility".
International studies have found that freeing up markets generally enhances income mobility but this alone will not produce the best results. A second, even more important ingredient for success is a relatively high level of social investment - in public education, health care, housing, transport infrastructure, employment programs, parental support services and so on.
Freer markets help create more economic opportunities - but without adequate and well targeted social investment, it will be those born to rich, well-educated and motivated parents who will be best able to take up the opportunities.
The US experience illustrates this well: it has the freest and most productive economy in the world but because of its relatively low levels of social investment, it does not rate well on social mobility relative to, say, the Nordic countries.
What of Australia? In the past few decades we liberalised our economy and invested heavily in our people. So it is not surprising that, looking back, Australia emerges as a fairly mobile society - at least relative to countries like the US, UK and Germany.
However , the outlook is much more uncertain because we seem to be making the same mistake as the Americans - relying too heavily on economic freedom and not enough on active social investment to equalise opportunities. If this policy trend continues, more and more Australians will be "stuck in the basement" not through lack of ability, effort or motivation but through lack of opportunity.
The warning signs are there. Many unskilled workers are becoming trapped in chronic under-employment, relative low-pay, insecurity and unpredictable hours. We have large and growing education inequalities - in pre-schooling, secondary schooling and tertiary education. The technological divide is wide. And the availability and quality of health services is becoming increasingly dependent on one's income and location.
Realistically, inherited wealth and parental skills will always be unequally distributed. And no one wants a nanny society.
But governments can do much more through social investment to enhance the upward mobility of disadvantaged Australians over their life cycle. Young children need good living conditions and adequate access to pre-schooling, child care services and health care to give them the same start in life as others. Older children need top class public schools which compete on equal terms with their private counterparts. Teenagers need assistance to ensure they are job ready and equipped for the demands of the labour market. And later in life, they need to have access to life long learning facilities, tertiary scholarships, preventative health care, affordable housing and good public transport.
Governments must also strive harder to even out regional inequalities of opportunity and where a region is no longer viable, provide generous relocation assistance. And low income families should also be helped to build up savings and access credit for sound productive purposes. Finally, a self-respecting society must do away with the last vestiges of discrimination against women, some migrants, indigenous Australians and mature workers.
Such programs can only be implemented gradually. But concerns about their economic sustainability are unwarranted. In the long term, giving everyone an equal chance not only produces a fairer society but also enhances national productivity and living standards.
Fred Argy
Visiting Fellow Graduate Public Policy Progarm Australian National University
What do you think?
It's a thoughtful commentary:
Australians are strong believers in individual responsibility and self reliance. But they also care deeply about equality of opportunity - the notion that everyone should have an equal chance to achieve their full potential, irrespective of their social background. It is the essence of what we mean by a "fair go".
The extent of equality of opportunity in a society can be assessed by following the same group of individuals over a long period of time and observing the ease with which they are able to move up the social hierarchy. In this way we can measure the degree of what we call "income mobility".
International studies have found that freeing up markets generally enhances income mobility but this alone will not produce the best results. A second, even more important ingredient for success is a relatively high level of social investment - in public education, health care, housing, transport infrastructure, employment programs, parental support services and so on.
Freer markets help create more economic opportunities - but without adequate and well targeted social investment, it will be those born to rich, well-educated and motivated parents who will be best able to take up the opportunities.
The US experience illustrates this well: it has the freest and most productive economy in the world but because of its relatively low levels of social investment, it does not rate well on social mobility relative to, say, the Nordic countries.
What of Australia? In the past few decades we liberalised our economy and invested heavily in our people. So it is not surprising that, looking back, Australia emerges as a fairly mobile society - at least relative to countries like the US, UK and Germany.
However , the outlook is much more uncertain because we seem to be making the same mistake as the Americans - relying too heavily on economic freedom and not enough on active social investment to equalise opportunities. If this policy trend continues, more and more Australians will be "stuck in the basement" not through lack of ability, effort or motivation but through lack of opportunity.
The warning signs are there. Many unskilled workers are becoming trapped in chronic under-employment, relative low-pay, insecurity and unpredictable hours. We have large and growing education inequalities - in pre-schooling, secondary schooling and tertiary education. The technological divide is wide. And the availability and quality of health services is becoming increasingly dependent on one's income and location.
Realistically, inherited wealth and parental skills will always be unequally distributed. And no one wants a nanny society.
But governments can do much more through social investment to enhance the upward mobility of disadvantaged Australians over their life cycle. Young children need good living conditions and adequate access to pre-schooling, child care services and health care to give them the same start in life as others. Older children need top class public schools which compete on equal terms with their private counterparts. Teenagers need assistance to ensure they are job ready and equipped for the demands of the labour market. And later in life, they need to have access to life long learning facilities, tertiary scholarships, preventative health care, affordable housing and good public transport.
Governments must also strive harder to even out regional inequalities of opportunity and where a region is no longer viable, provide generous relocation assistance. And low income families should also be helped to build up savings and access credit for sound productive purposes. Finally, a self-respecting society must do away with the last vestiges of discrimination against women, some migrants, indigenous Australians and mature workers.
Such programs can only be implemented gradually. But concerns about their economic sustainability are unwarranted. In the long term, giving everyone an equal chance not only produces a fairer society but also enhances national productivity and living standards.
Fred Argy
Visiting Fellow Graduate Public Policy Progarm Australian National University
What do you think?