Economic Inequality and Social Justice in USA, Australia and New Zealand

Business Ethics
1
Business Ethics

Business Ethics 2
Introduction:
There are number of evidences related to the cross section of the companies which clearly states
that inequality in economic terms is the result of the adverse social and economic outcomes.
Persson and Tabellini (1994) state that inequality in society reduces the economic growth, and
mainly in the democratic countries. However, this statement was argued by the Barro (1996) on
the ground that this situation occurred only in the poor countries.
Generally, inequality in society is defined as the gap which occurred between the earnings of the
richest members of society and poor members of the society. However, gap not only arises
between the financial figures, there are some other inequalities and unfairness also such as
inequality related to health, justice, basic resources, etc. There are number of societies across the
globe which increasingly becomes the unequal and unfair. This occurs even though evidences
show that economic inequality mainly challenges the personal and social wellbeing, and it also
affects the safe functioning of the societies. The most important causes of the inequality in
societies are the macro-economics and psychosocial factors which contribute in maintaining the
same.
Social Justice can be described as the situation in which dominant population suffers inequality
and this happen because of their relative position in power structure of the country. Social
inequality is considered as that way through which unjust actions are conducted in the society
(Honor Society, 2016}.
Structure of this essay mainly discusses the concept of the justice which plays important part in
any discussion which deals with the organization of society. This question of justice arises at the
time when there is unequal distribution of income and Wealth in the societies of USA, Australia,
New Zealand and other countries. In context of this discussion, this essay mainly focuses on the
question whether society is just or unjust.
Discussion
Inequality and poverty are different but completely related concepts, and in this context poor
means an individual who does not have sufficient resources in terms of functioning at the level
which is socially acceptable. Generally, national poverty levels are measured through the
percentage of the population which holds the income or wealth less than the benchmark thought
in context of representing the minimum requirement of the individual to flourish. United States
of America established the threshold for poverty in 1960s, and this threshold based on the cost
related to the nutritionally adequate but plain food consumption basket. The actual threshold in
this context have been adjusted in terms of inflation but applied in equal manner across the
country instead of the fact that there is great differentiation in the cost of living from one city or
state to the next (Stiglitz 2013).

Business Ethics 3
The poverty rate in U.S. fell from almost 22% in the early years of 1960s to the low of 11% in
the mid years of the 1970s, and after that period this rate differentiate between the 11% and 15%
and this mainly depends on the economy of the state (Census 2017b). The World Bank track
down the poverty levels across the globe from large number of years and this is grounded on the
original income threshold of single U.S. dollar a day. Recently, the standard related to the risky
poverty has been adjusted for showing the power of purchasing related to the national currencies
and also by considering the inflation with extreme poverty and this inflation are presently
defined as the income below the 1.90 international dollars a day (World Bank 2017). However,
poverty is defined as the important issue of the society, but this is not the main topic of this
essay. This essay mainly defines the issue of economic inequality.
Economic inequality is the concept which measures the position of individuals in the society as
compared to position of other individuals and groups. Generally, it can happen that those
individuals who stand at the bottom of the income distribution can be considered as both
absolutely and relatively poor, but it is possible to imagine such society in which absolute
poverty can be removed even in those situations when relative poverty (inequality}can still
present.
The inequality in context of this discussion deals with the income, wealth, and prestige of the
individual and groups. Economic inequality includes both the terms that are income distribution
and wealth distribution, at that time when these economic variables have no intrinsic value. It is
necessary to understand that income inequality also relates with the different valuable factors
such as good health, longevity, education, and general satisfaction and happiness. As stated by
the Skidelsky and Skidelsky (2012), there are number of studies which show happiness of the
individual mainly relates with the rising of the income up to the level of threshold, and after it
reach to the level of threshold rise in income level does not provide any contribution in the level
of happiness and life satisfaction (Markus& Lederman, 2015}.
This is also the fact that those who have higher income enjoy good health, better education, and
also the opportunity to take part in the social and political lives of their communities. As defined
by the sandel (2012}, money cannot buy everything, but still equal distribution of income can
serve as the proxy in terms of distribution of the wide range of desirable things. At least there is
one type of inequality; however such inequality is not well represented by the disparities in the
income and wealth. Therborn (2013} also states the type of inequality which deals with the
unequal socio-economic positions which emerge because of the race, sex, religions, etc. All these
factors ultimately result in the increasing inequalities in income or wealth. In the united States of
America, situations in the society for African-American man are very different in comparison of
the European-American man even they both have same education and same age.
Similar situation occurred in the society of the Australia, which means, there are number of
studies which clearly reflects the unequal practices occurred in the societies of Australia. As per
one report, following are the facts and figures in context of income inequality (ACOSS, 2018}-
 Some individual with the highest 20% of the income scale lives in the household with
almost five times of the income in which some individual lives in the lowest 20% of the
income scale.