When politicians say things such as that the poor don't buy petrol, it's easy to accuse them of being "out of touch". Actually,
all politicians face that accusation before they're through. It's one
of our favourite things to say about pollies we disapprove of.
But let's turn it around: exactly how in touch are you and I? Much less than we imagine.
We
know a lot about our own circumstances and those of our friends and
neighbours, but are surprisingly deficient in our understanding of
people outside our circle.
And one of our greatest deficiencies is our inability to see ourselves as others see us, to place ourselves on the spectrum. Take the question of income.
In
1999, researchers at the University of NSW conducted a survey asking
people to nominate their family's gross income and then to say where
they believed that income placed them in the distribution of all
families' income.
The results showed that more than 93 per cent of
respondents believed their income to be in the middle 60 per cent of
the distribution.
Most of us like to imagine we're middle-income earners. Ask us where we fit and almost no one admits to being either rich or poor (unless they're accused of not using much petrol).
A
survey conducted this year for the Australia Institute, found a similar
result but put it a different way: nearly all Australians think the
average income is the same as their own income.
Of those
respondents reporting their own annual household income to be between
$20,000 and $40,000, 58 per cent believed the average income of all
households lay within that range.
For those on $40,000 to $60,000, 71 per cent thought this was average. For $60,000 to $80,000 it was 61 per cent, for $80,000 to $100,000 it was 55 per cent, and for $100,000 to $150,000 it was 51 per cent.
Even
for those on more than $150,000 a year, a third of them thought that
was average. According to the Australian Bureau of Statistics, the
average household income in Australia is $80,700.
But how could so many of us be so out of touch? How could we be so unaware of how the other half lives and which half we fit into?
I'm sure there are various reasons, but one of the big ones is something that's been going on for
years without most of us noticing. Our cities are becoming more
socially stratified, with the better-off congregating down one end and
the less well-off down the other.
These days, you're less and less
likely to find suburbs with a cross-section of high and low
income-earners, or highly and lowly educated people.
So we don't
know how the other half lives because they are in the other half - the
half we live far away from and rarely visit or even drive past. Pretty much all our family, friends and workmates are in the same half we're in.
A
study conducted last year by Jane-Frances Kelly and Peter Mares, of the
Grattan Institute, Productive Cities, looked at maps of who lives where
in Australia's largest cities and tracked how this had changed in the
20 years between 1991 and 2011.
The authors found that the
residents of our four biggest cities have enjoyed rising incomes and
have become much better qualified. At the same time, however, our cities had become more polarised.
"Increasingly,
high-income residents with university-level qualifications cluster in
suburbs close to city centres, while residents on lower incomes, and
residents with vocational [trade certificate and diploma]
qualifications, are more likely to live around the city fringes," they
say.
"In each city, it is also possible to identify particular
areas of disadvantage, where a high proportion of residents have no
formal qualifications beyond secondary school, where labour market
participation is low and where a high proportion of young people are
'disconnected' - that is, neither working nor engaged in education or
training."
In Sydney and Melbourne, individuals on higher incomes
are clustered in inner suburbs and suburbs with desirable natural
attributes such as beaches, trees and hills.
In Sydney, the
highest median incomes are found in inner, northern and harbourside and
beachside suburbs, while the lowest median incomes are concentrated in
western and south-western suburbs more distant from the CBD.
In
Melbourne, the highest median incomes are found in inner, eastern and
bayside suburbs, while the lowest median incomes are concentrated in
more distant western, northern and south-eastern suburbs.
A map also shows a clear pattern in house prices. "The
premium placed on proximity to the city centre is evident in steep
house-price gradients in Sydney, Melbourne, Brisbane and Perth," they
say.
Research by the Reserve Bank shows that, if you rank house
prices for any of those cities according to their distance from the
central business district, you get an almost perfect curve that (using
figures from 2010) starts well above $1 million in Melbourne and Sydney
and then declines steadily to about $300,000 when you're more than 60
kilometres from the centre.
This relationship between proximity
and house prices has strengthened in recent decades, with average annual
growth in house prices about 2 per cent higher in inner suburbs within
five kilometres of the centre than on city fringes.
Those people
out in the boondocks have no idea how much we struggle with our
mortgages - and we have no idea that they have problems too. Price of
petrol, for starters.
