the rich and the rest annual income in $ $150,000 $300,000 $25,000 $10,000
TRANSCRIPT
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
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
So why is it an issue?
THREE REASONS TO CARE:Social corrosion and divisionHealth and social problems increaseEconomic growth is weaker
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
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
Continuing the debate…
• www.inequality.org.nz• Robert Wade talks• Book tour in August-September• [email protected]• 022 694 0871