I recently saw the movie AmazingGrace. It’s a powerful, albeit Hollywood-style, retelling of thelife of William Wilberforce – the British politician who was instrumental inabolishing the slave trade throughout the British Empire. It’s the sort ofmovie that can make you pat yourself on the back and be pleased with how farsociety has come. But when future generations look back on us, it’s soberingto think they might judge us in the same light.
It’s six in the morning on a typical day in Bangkok. Near where I’m standing a man lays out his worldly possessions for sale on a rug. Thumbing his book, he settles down for a long and uneventful day. Nearby a mother of three is also starting her day. She fires the charcoal grill and gets to work chopping up day-old meat and vegetables. Although she will do a brisker trade than the gentleman with the rug, it’s not much of a living. This scene is typical of the developing world. But just a stone’s throw from this particular makeshift market is a bustling mega-mall where Bangkok’s growing middle class come to find an outlet for their new-found wealth.
Income inequality in New Zealand is likely to have increased sharply over the last two years as the recession will have disproportionately affected middle and lower income households. This increase will come on top of a small uptick in inequality in mid-2009.
As in most developed countries, inequality has increased considerably in New Zealand since the early 1980s. The most rapid increase occurred in the late 1980s following the market reforms. The upward trend reversed slightly during the 2000s due to the redistributive policies of the fifth Labour Government, but it tipped up again between mid 2007 and mid 2009.
Globally, the greatest source of disparity in income andwellbeing is between countries. Which country you happen to be born in has thebiggest influence on your lifetime prospects for income and wellbeing. Buteven within the richer countries of the world there remains a wide disparity inoutcomes and prospects. Children from poorer households are more likely to failat school; poorer adults are more likely to commit crimes and are more likelyto have poor health outcomes.
Real disposable incomes of Kiwi households have been rising on average for a considerable length of time even after taking into account increasing costs of food, fuel and mortgages. This was very clearly demonstrated by a colleague of mine – Chris Worthington – in this column some weeks back. But averages sometimes disguise differences across social strata. Have we all being been enjoying the fruits of growth?