According to Radio NZ this morning, Mr Peter Sherwin of Grant Thornton has been doing some homework and looking at the data on inequality from the OECD statistics. Unfortunately he could get data from the last 20 years only in which the top 10% incomes were related to the bottom 10% incomes for New Zealand.
Surprise, surprise, he could find no evidence of a worsening of the income gap over that period. Most of us would agree that that was not the time when inequality got under way here. In fact I would agree that the level has stayed much the same over the last 20 years with some minor fluctuations.
The real problem is the massive changes induced by policies in the late 1980s and 1990s which have left a large number of New Zealanders in trouble with lack of resources, financial and otherwise, and many families struggling to bring up children so that they can gain their true potential and contribute to our society.
There are ways of measuring inequality in society other than the ratio of the top 10% to the bottom 10%. If Mr Sherwin had looked further at the OECD Statistics he could have found more comprehensive measurements of the Gini Coefficient going back to 1983 for some countries.
The Gini coefficient measures inequality and would be zero for a completely equal society and one for a society in which one person gets everything. In real life equal societies are under about 0.5 to 0.3 and unequal ones are 0.4 or more.
The graph shows that NZ was 0.27 in the mid 1980s and rose to a peak of 0.34 in 2000. We have settled back to the 0.325 level over the last five years or so which is good, but not good enough. We are still a long way from the levels of the 1980s.
As expected USA tops all those shown over the whole period. Denmark, “the best place to go to follow the American dream” according to Kate Pickett, has risen a little, but remains consistently equal in their wealth distribution. The UK has a similar pattern to us, but a little worse. Mr Sherwin was keen to mention Iceland, but the data is meagre and things can change a lot very rapidly with a population of only 300,000.
What’s the message from all this? Yes we have steadied off a bit over the last 20 years, but the changes induced then have left a lot of New Zealanders disadvantaged in the long term and too many in trouble at the moment to be acceptable in a wealthy country like ours.