Inequities in wealth and income are one of the biggest social, economic and political challenges of our time, writes Professor Sharon Friel ahead of this week's Boyer Lecture.

Addressing these inequities is important for three key reasons.

Economic costs: Inequity undermines the well-being of a nation's economy and impedes efficient economic growth. Being financially reliant on and influenced by a small few also builds vulnerability into the economic system.

Social costs: Inequity erodes daily living conditions, wastes human capital, and reduces social cohesion. Each of these are necessary for a flourishing, cohesive and secure society.

Health costs: Inequity harms peoples' sense of self and prevents access to the conditions necessary for health.

So how do these inequities play out in Australia, and what are the implications for the nation's health?

A fair go for health?

Not everyone has a fair go at living a long, healthy and prosperous life. People at the bottom of the social hierarchy tend to have worse health than those in the middle, who in turn have poorer health than those at the top.

This observation, known as the social gradient in health, is seen in countries around the world, including Australia, and for a number of health outcomes including depression, diabetes, heart disease and cancer.

"Who" you are and where you come from has a remarkable impact on your health. Take Anna's story, for example:

Anna is 44 years old and lives with her elderly mother in one of the most socioeconomically disadvantaged urban areas in the country. She is quite overweight, smokes a lot and suffers from depression but is not inclined to visit her doctor. Like Anna, the poor consistently gain less from health services than the better off, which leads to untreated disease. This is known as the inverse care law. Anna left school with very few qualifications. Like her economically disadvantaged peers, Anna was always more likely to do poorly in school and drop out earlier than students in the wider population. These teens grow into adults who have lower incomes and are less empowered to provide for themselves and family.

The growth of temporary, part-time work and informal work in high-income countries has affected working conditions, with increasingly less job control, financial security and access to paid family leave and flexible working hours.

Anna works in a call centre for a large telecommunications company. Her job involves dealing with customer complaints all day, every day. She has no control over the nature of her work or how it gets done, other than to use the mute button on the call. On the up side, Anna has a permanent position with six weeks of holidays per year. But her wage has not increased in the past five years. Anna is financially reliant on her single wage. She cannot afford to buy her own place, which is why she lives at home with her mother.

People such as Anna who work in precarious or low-paid jobs do not have the easy choice of living in areas close to their work. House prices are partly to blame for this social disconnection. The land value gradient growth in recent years in many Australian cities is reinforcing a very strong social stratification of choice and opportunity for generations to come.

The quality of working conditions is related to mental health. For people such as Anna, poor-quality work can in fact be worse for health than not having a job at all.

It's about more than money

Income inequity is related to the rates of poorer health in a number of areas, from alcohol-attributable hospitalisations and deaths, to child health, and to oral health.

These findings suggest health is not determined by absolute wealth. Rather, it is contingent on those around us and how wealth is distributed and spent — what people are able to be and to do.

Three interconnected pathways may explain the association between income inequity and health inequities.

The "social capital" hypothesis suggests that higher levels of income inequity in a society increase status differentials between individuals. This reduces social mixing across groups, thereby reducing levels of interpersonal trust.

This can give rise to feelings of social exclusion, insecurity, stress and can lead to decreased life expectancy.

The "status anxiety" hypothesis argues that inequity damages individuals' perceptions of their place in the social hierarchy. In other words, less wealthy people see themselves as less worthy.

The perception of inferiority induces shame and distrust, which directly damages individual health via processes in the brain but also by reducing levels of social capital.

The "neo-materialist" hypothesis suggests there is systematic under-investment in social infrastructure and services in more unequal societies. Social infrastructure influences the level of individual financial resources and provides services such as education, health services, transportation and housing.

The Federal Government's proposed removal of the energy supplement, for example, means people who are unemployed, living on $38 per day, face losing a minimum of $4.40 a week. For people on Newstart, $4.40 buys essentials such as bread or milk.

Time to redress the inequities

As elsewhere, modern Australia has not served all social groups equally. The systematic differences in social and health outcomes suggest that the opportunities open to people were not equal to start with.

In a society where material rewards are used as the yardstick of success and failure, it is hard for those who fall behind to flourish.

As a society we need to redress the inequities in people's material resources, the degree of control people have over the conditions that affect their lives and the amount of political voice that they can express.

Sir Michael Marmot's presentation of Health inequalities and the causes of the causes, the first lecture in his 2016 Boyer Lecture Series Fair Australia: social equity and the health gap, will be broadcast on Radio National at 1:00pm on Saturday, September 3.

Sharon Friel is the Director of the School of Regulation and Global Governance (RegNet) and Professor of Health Equity at Australian National University.

Originally published in The Conversation.