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