by Jan Logie
It is hard to find reason to celebrate the latest NBR rich list while one quarter of all New Zealand children are living below the poverty line.
The NBR’s annual publication, out yesterday, reports an increase from 2012 of $3.5 billion in total minimum net worth among Rich Listers a total minimum net worth of members is now at $47.9 billion.
This year’s increase in wealth has come primarily from the stockmarket.
The growth in wealth of these New Zealanders doesn’t mean they are better than anyone else or necessarily working harder or smarter than anyone else. The system is currently skewed to the advantage of the wealthiest and perpetuates values that most of us don’t share.
In the book, Inequality- A New Zealand Crisis, Max Rashbrooke writes, “Using the concept of “social return on investment” (the broader benefits to society created by a particular activity) British researchers have suggested that high-paid investment bankers by engaging in predatory lending and contributing to financial crises, destroy 7£ of wider social, economic and environmental value for every 1£ value they create.”
In contrast low paid childcare centre staff help nurture the workers of the future and generate between 7 and 9.5£ in value for each pound they are paid.
Many people are working multiple jobs/long hours in very demanding work. Rest home workers, small business owners as examples. It’s just they’re not getting the benefit.
Many people are very smart, and innovative – academics, community workers, social entrepreneurs, rest home workers. I’m not sure if you did comparative intelligence tests the rich list would come out top. Though there is a ‘competitive advantage’ if you’ve been to the right schools, had a great education etc. etc. It has to be asked though how was that possible. I know for myself my educational achievements and luck in life have significantly been a result of our shared national resources i.e parents had two good public sector jobs, child benefit, it was a time of full employment and state housing so they could afford to buy a house. I know many others who haven’t been as lucky who haven’t had the same opportunities as me.
The top 1% owns three times as much wealth as the poorest 50% in New Zealand.
This degree of inequality hasn’t always been part of our landscape and it doesn’t have to be. I don’t want to return us to the past although I do want a future though where our shared interests are better acknowledged.
While we look to those who have achieved great wealth we are also brutally aware of families living in damp, cold houses and children are going to school without food or shoes.
An Organisation for Economic Cooperation and Development (OECD) report in June found that in New Zealand “income inequality is higher than the OECD average” and that “the system of taxes and transfers reduces inequality less than in most OECD countries”, leading the OECD to recommend New Zealand adopts a capital gains tax.
There is a growing conversation among New Zealanders about income inequality and the gap that exists under the current Government.
Lower incomes are getting squeezed, with the median wage going down for the second consecutive year.
We now have a Living Wage movement that is drawing attention to low wages in New Zealand.
The “Gatsby effect” is alive and well with Inter generational earnings mobility remaining lower in high inequality countries. These effects accumulate over time and across generations. There is a clear link between today’s inequalities and opportunities over time.
As RH Tawny says, “A good society is not just one in which people can rise, but also one in which ‘they should be able to lead a life of dignity, whether they rise or not.”
New policies like extending the child payment to families on a benefit, raising the minimum wage to a living wage, and taxing capital gains would help families and make us a more equal society.