About that income inequality thingy the left always bang on about

All last year we heard various Green and Labour politicians go on about income inequality…and how the “poor” of New Zealand are sooooo hard done by.

On top of that they claim that National is evil incarnate and the poor are being hammered by National just for shits and giggles.

They point to all sorts of weird economists who have written books that upon examination the facts don;t stack up.

Buy that has never stopped the left-wing pushing a massive lie on the people, just look at global warming by way of an example.

Since they like quoting reports and overseas facts how about they report this one…the one that says that inequality isn’t growing, it is reducing….and has been for 20 years. (Kind of like there has been no warming for 20 years also)

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough.

The finding comes from a recent investigation by Christoph Lakner, a consultant at the World Bank, and Branko Milanovic, senior scholar at the Luxembourg Income Study Center. And while such a framing may sound startling at first, it should be intuitive upon reflection. The economic surges of China, India and some other nations have been among the most egalitarian developments in history.

Of course, no one should use this observation as an excuse to stop helping the less fortunate. But it can help us see that higher income inequality is not always the most relevant problem, even for strict egalitarians. Policies on immigration and free trade, for example, sometimes increase inequality within a nation, yet can make the world a better place and often decrease inequality on the planet as a whole.

And you’ll never guess what has assisted the reduction in inequality.

International trade has drastically reduced poverty within developing nations, as evidenced by the export-led growth of China and other countries. Yet contrary to what many economists had promised, there is now good evidence that the rise of Chinese exports has held down the wages of some parts of the American middle class. This was demonstrated in a recent paper by the economists David H. Autor of the Massachusetts Institute of Technology, David Dorn of the Center for Monetary and Financial Studies in Madrid, and Gordon H. Hanson of the University of California, San Diego.

At the same time, Chinese economic growth has probably raised incomes of the top 1 percent in the United States, through exports that have increased the value of companies whose shares are often held by wealthy Americans. So while Chinese growth has added to income inequality in the United States, it has also increased prosperity and income equality globally.

Oh no…and the left-wing protests international trade…despite the evidence it reduces global income inequality. I wonder if they will still be opposed to the TPPA? Silly me, of course they will, they want everyone to suffer equally.

The message from groups like Occupy Wall Street has been that inequality is up and that capitalism is failing us. A more correct and nuanced message is this: Although significant economic problems remain, we have been living in equalizing times for the world — a change that has been largely for the good. That may not make for convincing sloganeering, but it’s the truth.

A common view is that high and rising inequality within nations brings political trouble, maybe through violence or even revolution. So one might argue that a nationalistic perspective is important. But it’s hardly obvious that such predictions of political turmoil are true, especially for aging societies like the United States that are showing falling rates of crime.

 


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  • MAWG

    The left want equality by making everyone equally poor. The right want to bring the poor up. The problem is that the rights solution requires the poor to get up and work for it.

    • And why is it the “poor” believe they have to take the lead in overpopulating the planet?

      • Ignorance breeds …

      • Chiefsfan73

        Because we are stupid enough to be extorted into paying them to.

    • Bayman

      True, and the leaders of the left will be not quite as poor as they ‘have work yet to do’

  • BigDes

    And this will be MSM news in 5,4,3,2 yeah, na.

  • Catriona

    Some people just aren’t born with enough brains to make it to the top I’m afraid.
    There will always be ‘poor’people’ not matter much much money is thrown at them.
    I’d hate to see equality translate into – the boss having to pay the staff exactly what he earns – is this what the left want?

    • 1951

      That is the sad thing about the socialist’s way…if someone didn’t have too-much-up-top he was still given a place, even if it was just sweeping the floor, it was a job, it was giving him a sense of worth, a place to be and a feeling of belonging. I feel thanks to socialism, that is what is missed by those receiving a benefit. I love seeing the ‘disadvantaged’ kids heading back to their communal flat after a days work at pak&slave or where-ever, they look wary yes, but they still have a ‘spark’ of life about them. That’s not what you see in a beneficiary.

      • Catriona

        Agreed.

  • 1951

    There is so much in that article one can agree with. If comparing when we were starting- out in the 70s to those starting-out now. Clothing alone was a major cost. As a child in the 50s most clothing was hand & home made, you didn’t question receiving hand-me-downs. Today there is no need for such. Anything imported into NZ was hugely expensive back then, compared to now.

    • LabTested

      Mum used to Darn my socks. It’s hard to imagine anyone now even contemplating that. I remember the screams when the NZ textile industry was really opened up to foreign imports. Sure lots of people lost their jobs as sewing machine workers, but NZ got cheap clothing & lost the need to spend the evening mending socks

      • 1951

        I was openly gob-smacked when my daughter-in-law told me she had never ever sown a button on. My boys learnt that in cubs! (mind you, she was brought up in the States)

      • taurangaruru

        Like my Mum probably spent her evenings sitting in front of the open fire knitting jerseys for the kids – after putting in a full days work.

        • exactchange

          Not to mention unpicking the worn or outgrown ones, skeining up the wool, washing it and then the two person thing with one holding the skein and the other winding it into balls.

          And *then* knitting it up again.

    • Platinum Fox

      At primary school I wore shirts that, in the interests of efficiency, Mum made without collars or pockets. Home made shorts had one patch pocket. I don’t think I had a pair of long trousers until I was at intermediate at least. Jerseys were home knitted.
      Clothes we grew out of were generally bundled up and handed down to cousins who were a few years younger than us.
      A fond early memory is going with Mum to the fabric shop (White’s, I think it was called (in NP)) pre-1960 and being enthralled by the wire-borne system by which the sales people propelled the docket and cash up to the cashier who sat up high above the shop floor.

      • 1951

        I think the reason I objected (quietly to myself) when my kids as students would come home wearing dead-mans clothes from the op-shop. I guess being the youngest of 7, I was lucky that three of them at least were girls so what I wore was in the most part feminine to look at :).
        Seriously, changes in trade & transport have made huge improvements to NZ’s economy/society over time.

      • ex-JAFA

        Cousins had six boys and a girl; we had five girls and two boys. The cousins’ hand-me-downs didn’t last to the youngest boy, so he got the ones my brother and I had finished with. My sisters’ clothes eventually made their way to my cousin. Waste not want not!

  • kiwibattler

    The focus by the lefties and MSM on the gap between rich and poor still irks me. If the poorest person in New Zealand can still live relatively comfortably and has the support net of endless govt agencies and charitable organizations then who cares how much the richest person in the country earns?
    The ‘Living wage’ is another joke – it really should be renamed the ‘Nice to have wage’ as it represents an hourly rate that comfortably allows for luxuries such as overseas travel, gadgets and unnecessary items. I mean having internet access to your home nowadays is seen by many academics as an essential item alongside food & shelter – great to have but really??

  • johnnyB

    I often think that this issue is being misrepresented when I see it announced that the ‘Gap’ between the Rich and poor is getting Bigger – the Gap is largely immaterial so long as the poor are also earning more. In this country we don’t often see what constitutes being poor (it certainly would be a far greater level of earnings than most others ) I suspect it is sometimes being dragged upwards by using the increasing wages of our high earners as the benchmark. I personally don’t care that somebody else may be getting paid a lot more than me, I care about how much I am earn. It is the Politics of envy being pushed by the Greens and labour.

    • kiwibattler

      Pretty much sums it up – but have we ever seen this sentiment expressed in ANY New Zealand newspaper?

      • johnnyB

        No its easier to write about the 1st world poor problems like “the Salvation Army didn’t provide me with Xmas this year”

    • Michael_l_c

      Poverty is set as a percentage of the average income. Therefore a certain percentage will statistically, always, be in poverty no matter how much their wages or benefit increases.
      What matters how you spend your money & the price of what you buy.

      Lies, damn lies & statistics.

      • Terence Hodgson

        I believe poverty is measured as a percentage of the MEDIAN income. Quite different to the average. The poverty level for NZ is $230 a week in the hand AFTER accommodation costs are paid. That’s for a single person.

    • taurangaruru

      From the Socialists point of view it is not being misrepresented, the Commies talk about equality all the time, they are all about taking from the so called rich to give to the so called poor, they do not see the reasons for giving the poor the tools to make their own lives better. As Maggie Thatcher said “they would rather have the poor poorer provided the rich were less rich.”

  • ozbob68

    Having argued about income inequality with a friend over christmas, I determined that he was all for having more money but completely disinterested in doing something over-and-above to get it. I’ve heard that the mobility scores (the ability to move out of poverty) are really high for NZ, is that true?

    • MrBarrington

      Yes….. read Dr Eric Crampton at Offsetting Behaviour…

    • I don’t know about that…my old man was brought up in a state house, with a sole parent…so was John Key, neither of them are now in poverty.

      Education is the great leveller. Unfortunately most of the feral poor don’t appreciate the saviour that education can be.

    • taurangaruru

      Sorry it is not about doing “something over & above to get it” it is about doing something. In NZ we have a good education system, with internationalised labour markets we can go places where we can earn good money with those skills. That applies to every one – there are plenty of migrants from the third world heading for countries like NZ because of the (from their point of view) high wages they can earn in our factories & farms etc. If someone thinks leaving school in NZ with little education & working in factories is the way to go then they are destined for a life of low income, they are competing (almost directly) against the low wage economies of places like China & Bangladesh. They are setting themselves up for failure, it is that simple.

  • cows4me

    Equality spouted by these leftist fools is a flawed concept from the get go. Economic equality is madness and simply akin to pushing very runny crap up a very steep hill with a very sharp stick. The notion that all should share an equal amount of wealth would end up with all sharing an equal amount of poverty. Life isn’t fair, countless factors like sex, age, physical ability, location born, disabilities, ambition, laziness, etc, contribute to how well they will we do in life economically. The left constantly try to challenge the laws of nature and they constantly get their butts handed to them, they’ll never learn, I pity them.

  • Alloytoo

    Global abject poverty has (and continues to) decline following the fall of the Soviet Union. Remember that great experiment in “Equality”, and how it extended global poverty for decades.

  • Reid

    Lefties love labels because their policies are so lousy propaganda is not a nice to have it’s a necessity for them: hence “progressive” was mooted a few years ago. So watch for “Egalitarian” to start worming its way into the articles and press releases over the course of the next few years.

    Of course lipstick can’t hide the pig when its as massive and ugly as the left’s policy settings, but that won’t stop the left’s media acolytes from desperately applying it. You watch.

  • MrBarrington

    The problem with the lefties and their go to guys like Piketty is that they can’t accept that economics is not a zero sum game… of the order for me to win you have to lose etc… modern economies with open borders, free capital flows and lots of international trade do not participate in a zero sum game….

    The key difference is innovation… the left can only think of the dark satanic mills of the 19th century… but the real wealth to the global economy comes from innovation – developing new products, reducing costs and making better quality things….

    Look at an iPhone 6… it has 625 times the computing power of a 1995 desktop computer… 625x!! Now not everyone can afford an iPhone 6… but such is the pace of innovation that in five years its likely that just about everyone on earth will be able to afford a phone that has most of the features of an iPhone 6.. especially from those phone companies such as Xiomai and others selling phones into Africa and India…

  • jono

    I cant understand the logic in the way the statistics are presented.
    If we take in economic or environmental refugees with no skills NZ needs, especially as we have shipped off all the unskilled jobs offshore, and the newcomers end up on the dole how are we going to reduce the income gap?
    I have the same problem with a number of statistics which are used to compare NZ with other countries, TB levels, school standards etc.
    Shouldn’t we remove the immigrant effect before considering NZ performance?

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