Larvatus Prodeo

One interesting by-product of the tax stoushes that Naomi wrote about the other day might be an awareness of how few Australians are in the top bracket, and how many are struggling along with 30-60k household incomes (and that’s before we even talk about the large number of really poor people on welfare and/or very low incomes). There may or may not be a case for tax reform at the top end, but Emerson and Swan are quite right to say that fixing the welfare to work barriers and meaningful tax reform for the great majority of Australian citizens are far higher priorities. In this context, Wayne Swan’s book Postcodes: The Splintering of a Nation might be an instructive read for citizens, and particularly commentators and journos.

It’s not hard to assume from the assumptions that underlie most media reporting (with some distinguished exceptions like George Megalogenis) and interviews by the likes of Maxine McKew that the Canberra elites seem to have great difficulty understanding that over a decade of economic growth doesn’t mean that most Australians are rolling in dosh, driving SUVs, feeling aspirational, obsessed with property, building McMansions, troubled only by whether to go for the platinum as opposed to the gold Visa card, and so on. It’s been really weird watching McKew’s face as various Labor pollies and ACTU folks have explained the circumstances and choices which beset rather than empower most working Australians.

Sociological research - beginning in the 1960s with the debate over the (then) new phenomenon of the affluent worker - has shown that most people have very little idea of the prevailing wage levels and distributions across the economy as a whole. Rather, people pick what they know as a comparator. Thus, journalists like McKew or pollies like Costello who think it’s important to preserve uber-generous super lest Parliament become populated by useless timeservers, are probably comparing their own generous remuneration to the much higher levels of professionals and business people with whom they interact. Similarly, white collar workers in most public sector organisations earning in the low to mid 40ks will tend to compare their wages to those below them and above them and think in terms of what they could get through their next pay increment or promotion.

The individualised myth of meritocracy so deeply embedded in our society - reinforced by constant hammering on the bludgers and ladders of opportunity themes - tends to make those doing really badly more aware of the constant stories - often reported in the tabloid press - of prosperity and average wages over 50k and assume either that they are in fact the useless old economy drones the press and pollies accuse them of being or to place false hope in the promises of social mobility constantly held out as a carrot, even as they labour under the many sticks of a deeply unfair tax and welfare system.

So one of the many merits of Swan’s book - which deserves not only a wide audience but also careful study by the punditry and political classes - is the way that he uses both statistical data from the ABS and also puts a human face on the real situation of many families to drive home the facts about actually existing inequality and financial distress in this land of plenty. I was struck, among many other things, by his pointing out that the Byron Hospital only has 28 beds. You may well think - hey, that’s ok, people can travel to Lismore if they need to access hospital services (for instance, bulk-billed specialists or day surgery). But the bus fare is $26. That might sound like nothing to you and me, and in fact I’m enjoying a glass of Pinot worth $25.99 a bottle as I type, but think of how you’d manage it on a regular basis if you were a single parent with health problems. Most of us here in the blogosphere might not be on a Maxine McKew wage, but we’re generally doing ok comparative to most folks. Again, Swan points out that in suburbs where the average mortgage is over 400k, repayments are $150 a week more than the minimum wage. And we should never forget that 75% of people earn under 50k a year, according to the ABS.

That’s why we need to take with a massive truckload of salt Howard’s claims about wages growth for all of us, for a start.

All this provides a necessary and important platform for evaluating and formulating policy. There’s no doubt scope for another post on Swan’s policy ideas and suggested approach for the ALP. But think also - next time you’re on a bus - of this woman’s experience:

If you look hard enough, it’s not difficult to see what’s going on. Consider, for instance, the 40 year-old mother sitting by herself on the early morning bus. She might seem to be heading out for a day’s shopping but in fact she is returning from her shift cleaning someone’s office. Behind her blank expression, beyond the exhausted look, she is fretting about getting home before her husband has been called out for casual work. She is worrying about making the kids’ school lunches, about unpaid gas or electricity bills and the precious time she will have to spend on the phone negotiating a late payment - time she would rather spend sleeping before heading out on the night shift again. Most of all she is wondering how to arrest her family’s spiralling descent into poverty. On that bus, dignity maks the distress of financial hardship and failing hope.