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How does income inequality compare to more traditional measures of disadvantage, like poverty? Excessive inequality in any society is harmful. It is harmful to the ability of people to participate in social and economic opportunities, and it undermines social cohesion. Digital Editions- Sydney Districts. It looks like you're using Internet Explorer 11 or older.
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Those of the higher-income categories grow disproportionately faster. Every citizen should be concerned about this trend. If total incomes and the incomes of top earners grow faster than city size, but not those of lower income earners, then most of the income that makes bigger cities richer is only going to the top earners.
This is probably not a surprising finding. Large cities attract many economic activities, particularly those in financial services, that can generate very large incomes. However, it highlights an issue that has received increasing attention in recent years — the significant increases in inequality in many Western economies. While our research was largely a data-driven exercise, it does help us think about what might be some of the sources of inequality in our cities and the geography of that inequality.
What policy response might help to counter this characteristic of increased city size? As big cities like Sydney and Melbourne expand, it will be very important to establish and support clusters of activity away from the principal city centre.
Polycentric cities are more likely to achieve more equitable access to higher-paying jobs. Additionally, it will be important to establish spatial policies that support a mix of higher, middle and lower-income jobs in business districts to prevent the agglomeration of the super-rich in pockets of the city.
This has implications for establishing housing market stability encouraging a good spatial mix of all housing types in the vicinity and efficient commuting middle-income or poorer people not needing to travel long distances for work. This has been a strategic planning objective for decades. One example would be the development of a new airport in western Sydney.
Proximity to the airport is likely to stimulate investment in other economic activities. As city housing markets become more expensive, households on lower and moderate incomes spend an increasing proportion of their incomes on housing. The number of locations where they can live in the city becomes smaller, especially when certain pockets show agglomerations of super-rich.
The costs of housing mean the amount of spare income those on moderate and low incomes can invest in themselves and their children to improve their employment prospects what economists call investing in human capital becomes smaller.
The educational outcomes for their children are often poor. Also, because of rising transport costs, the number of potential jobs they can access gets smaller.
To reduce inequalities in cities, it is also important that we spread affordable housing out across the city. Proposed inclusionary zoning provisions in the new Sydney District Plans , while modest, are a good first step. Policy interventions must ensure a more spatially equitable allocation of infrastructure and public services, along with freer migration. Spatial inequality is defined as inequality in economic and social indicators of wellbeing across geographical units within a country.
There are two reasons why it should concern policymakers. When spatial inequality goes up, so does national inequality. The overall conclusion from the wealth of information presented in the studies is that spatial inequality is high, and in many countries, rising. While there are efficiency gains from the concentration of economic activity in urban centres and in coastal districts, the associated regional inequalities are a major contributor to overall inequality.
A two-pronged approach is needed to address the problem of rising spatial inequalities while still reaping the gains from agglomeration and international openness:.
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