the rich and the rest annual income in $ $150,000 $300,000 $25,000 $10,000

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Page 1: The rich and the rest Annual income in $ $150,000 $300,000 $25,000 $10,000
Page 2: The rich and the rest Annual income in $ $150,000 $300,000 $25,000 $10,000

The rich and the rest

1984 1986 1988 1990 1992 1994 1996 1998 2001 2004 2007 2009 2010 20110

50000

100000

150000

200000

250000

300000

350000

400000

Bottom 10%MiddleTop 10%Top 1%

$55,000

$100,000

$30,000

$11,000

Annual income in $

$150,000

$300,000

$25,000

$10,000

Page 3: The rich and the rest Annual income in $ $150,000 $300,000 $25,000 $10,000

World famous – for inequality

• Once among the most equal rich countries• From the mid-80s to the mid-2000s, rich world’s

biggest rise in rich-poor gap• Now among the most unequal rich countries• Most unequal since records began in 1982

(despite extra working hours)• For wealth, the top 1% own 16% of all wealth –

three times as much as the bottom half• Disproportionate effect on Maori and Pasifika

Page 4: The rich and the rest Annual income in $ $150,000 $300,000 $25,000 $10,000

So why is it an issue?

THREE REASONS TO CARE:Social corrosion and divisionHealth and social problems increaseEconomic growth is weaker

Page 5: The rich and the rest Annual income in $ $150,000 $300,000 $25,000 $10,000

0.6 0.6

0.5 -

0.4

0.3

0.2•Germany

· •Sweden

•Finland

•Norway•Denmark

•United Kingdom

•France

· •Japan • New Zealand

•United States

- 0.5

- 0.4

- 0.3

- 0.2

0.1

0.1

The Great Gatsby CurveHigher income inequality associated with lower intergenerational mobility

Intergenerational earnings elasticity0.15 0.20 0.25 0.30 0.35 0.40Inequality(1985 Gini Coefficient)

Source: Corak (2011), OECD, CEA estimates

Page 6: The rich and the rest Annual income in $ $150,000 $300,000 $25,000 $10,000

What to do?

Getting people into work Skills training and schools

Making work pay Changing the power balance

When work is done Higher taxes, more support

Page 7: The rich and the rest Annual income in $ $150,000 $300,000 $25,000 $10,000

Continuing the debate…

• www.inequality.org.nz• Robert Wade talks• Book tour in August-September• [email protected]• 022 694 0871

Page 8: The rich and the rest Annual income in $ $150,000 $300,000 $25,000 $10,000