It might surprise you to learn how little you need to earn to be in the top 50% of all income earners in Australia.

The median (middle) income of Australians is $853 per week – which means that if you earn more than this, you are earning more than 50% of all working Australians.

The distribution of wealth is even more uneven than the distribution of income. The average household wealth of the richest 20% of Australians is almost 3 million dollars ($2,906,400); while the average wealth of the lowest 20% of households is only $36,500.

This means that the average worth of the wealthiest 20% of households in Australia is over 70 times more than that of the lowest 20% of households. To put it another way, for every $100 the lowest 20% of households have, the top 20% of households have $7,000!

“ for every $100 the lowest 20% of households have, the top 20% of households have $7,000! ”

Although there are conflicting reports on whether economic inequality is rising or falling in Australia, what is clear from ABS data is that economic inequality is a reality. Along with this, there is an increasing number of people who are experiencing financial vulnerability.

Geographically our cities are being divided into areas of the ‘haves’ and the ‘have-nots’, with poorer Australians living further away from effective public transport, employment opportunities, facilities and services.

So why does all this matter?

Studies have shown that economic inequality can have negative impacts not only on those who are in financial difficulty (worse health and lower life expectancies) but can also have an impact on our broader communities.

High-income inequality has a strong correlation with declining trust and social cohesion. The greater the economic inequality, the more people feel distrustful of others in the broader community around them and the less they participate in community groups, clubs and organisations.

We have previously talked about the decline in club and community participation and the negative effects increased individual isolation can have on our health and wellbeing in the Creating Communities blog.

The work we do at Creating Communities across multiple sectors seeks to ease these negative impacts. We recognise that each community is unique and economic factors are a wider force that impacts us all.

Through our engagement with communities, and putting together social and economic ‘snapshots’, we are able to understand the economic strengths or limitations of the communities we work with. With this understanding, we are able to create connections both within communities, and beyond, assisting Australians in building the skills, networks, and relationships they need to thrive regardless of their socio-economic circumstances.

It is through listening and understanding that we are able to break down the economic barriers that exist to create strong communities that have a holistic positive lasting impact on both individuals and communities.

Although this might seem like a big issue, one that is beyond you as an individual we can all work to make a positive impact on our community. Some of the values we live by at Creating Communities might be helpful in seeing how you can make a small positive impact on a big problem:

• Give generously – this doesn’t necessarily have to be money! It could be in volunteering your time, speaking out for change, or creating space for others to succeed. If you are doing it tough yourself it could be through running or participating in small initiatives like the Open-Kitchen Project or organising a clothes-swap with friends
• Nurture relationships – join clubs, foster support networks, be a good friend/family member/neighbour. Listen, share and collaborate with those around you. Research shows that having, or facilitating connections between others can have a big impact on helping young people find work, and imagine bigger, brighter futures for themselves!
• Generate trust – get to know your neighbours, say good morning to others when you walk down the street. Social connections can have a huge impact on improving both our mental and physical health.

So where do you see yourself in our society? Are you surprised by how much of an impact income inequality has on everyone in our communities? What can you do to help bridge the gap of inequality in your own community?