In its latest update on income inequality, the OECD has noted that the economic recovery underway has only led to gradual improvements in labour markets and household incomes.
And it says the recovery has not yet delivered inclusive growth, nor has it reveresed the trend towards increasing income inequality.
Although they did not single out New Zealand for any special mention in their analysis, New Zealand is included in their data summaries.
And in Panel B, New Zealand stands out as one of the few countries that between 2010 and 2014 where those on the bottom 10% of incomes made significant gains in the period (more than +10%) while those on the top 10% only gained a quarter of that (see page 2).
The Report allows us to benchmark New Zealand results against the usual countries we like to measure ourselves against. Here are three such benchmarks:
The Gini coefficient (sometimes expressed as a Gini ratio or a normalised Gini index) is a measure of statistical dispersion intended to represent the income distribution of a nation's residents, and is the most commonly used measure of inequality.
You read this data where 1 = "one person has all the income" and 0 = "everyone has the same income". So a lower score indicates a more equal distribution.
| Gini coefficient | 2007 | 2012 | 2014 | 2007-2014 change |
| Australia | 0.338 | 0.326 | 0.337 | -0.001 |
| Canada | 0.318 | 0.321 | 0.322 | +0.004 |
| Germany | 0.285 | 0.289 | 0.292 | +0.007 |
| Ireland | 0.305 | 0.304 | 0.309 | +0.004 |
| Netherlands | 0.298 | 0.280 | 0.283 | -0.015 |
| New Zealand | 0.330 | 0.323 | 0.333 | +0.003 |
| Norway | 0.250 | 0.253 | 0.252 | +0.002 |
| Sweden | 0.259 | 0.274 | 0.281 | +0.022 |
| UK | 0.373 | 0.351 | 0.358 | -0.015 |
| USA | 0.374 | 0.396 | 0.394 | +0.020 |
| OECD average | 0.317 | 0.316 | 0.318 | -0.001 |
Disposable income adjusted for household size
The S80/S20 income share ratio refers to the ratio of average income of the top 20% to the average incoem of the bottom 20% of the income distribution. Lower is better.
| S80/S20 income share ratio | 2007 | 2012 | 2014 | 2007-2014 change |
| % | % | % | ||
| Australia | 5.8 | 5.5 | 5.7 | -0.1 |
| Canada | 5.3 | 5.4 | 5.5 | +0.2 |
| Germany | 4.3 | 4.3 | 4.4 | +0.1 |
| Ireland | 4.7 | 4.7 | 4.8 | +0.1 |
| Netherlands | 4.4 | 4.2 | 4.3 | -0.1 |
| New Zealand | 5.3 | 5.3 | 5.3 | 0.0 |
| Norway | 3.7 | 3.8 | 3.8 | +0.1 |
| Sweden | 3.9 | 4.1 | 4.2 | +0.3 |
| UK | 6.6 | 5.9 | 6.0 | -0.6 |
| USA | 7.9 | 8.6 | 8.7 | +0.8 |
| OECD average | 5.4 | 5.5 | 5.5 | +0.1 |
Poverty measures
The poverty threshhold is 50% of median disposble income for each country. In this table, lower is better.
The working poor are those with income below the poverty line, living in households with a working aged head and at least one worker.
| Poverty rate | 2007 | 2012 | 2014 | 2007-2014 change |
Working poor (2014) |
| % | % | % | % | % | |
| Australia | 14.9 | 14.0 | 12.8 | -2.1 | 4.8 |
| Canada | 12.2 | 12.8 | 12.6 | +0.4 | 9.8 |
| Germany | 9.0 | 8.4 | 9.1 | +0.1 | 3.5 |
| Ireland | 9.6 | 8.4 | 8.9 | -0.7 | 4.3 |
| Netherlands | 6.6 | 7.9 | 8.4 | +1.8 | 6.9 |
| New Zealand | 11.0 | 9.8 | 9.9 | -1.1 | 4.7 |
| Norway | 7.8 | 8.1 | 7.8 | +0.0 | 6.2 |
| Sweden | 8.4 | 9.0 | 8.8 | +0.4 | 5.7 |
| UK | 12.8 | 10.5 | 10.4 | -2.4 | 5.8 |
| USA | 17.4 | 17.2 | 17.5 | +0.1 | 11.5 |
| OECD average | 5.4 | 5.5 | 5.5 | +0.1 | 8.3 |
The full OECD Report is here.
7 Comments
Whatever our Prime Minister does, affects all New Zealand's finances in so many different ways. Particularly the Governments coffers.
His name is Mr Key.
My comment was that not every one thinks like he does.
That includes the program I was referring to. He had no answers, only the usual platitudes and waffles.
I do not buy them, I never did.
We should be in a much better situation financially, there is nothing wrong in stating that, it is common knowledge.
It affects our standing in those Charts.
The thinking does affect our Finance and what outcomes are created from it.
If we all thought the same. I would be as poor as a Church Mouse, unlike those heavily in debt. That includes our Government. Or am I wrong.?
Was 'The Nation" also wrong.
I do not try to promote his agenda, I know why Mr Key and his cohorts think the way they do, however.
That my version of the truth, does not gel with yours, is why we have issues, that I have to work around.
The Nation program can be seen by all New Zealand people but not my comment on what was said.
If you want me to spell it out more reasonably please say so and how I must think in future.
How is income from capital gains treated in this survey?
It occurs to me that, being one of a very few countries that don't regard or tax capital gains as income, our income inequality statistics are heavily distorted and not for the better. The effect can be seen in our share of wealth with 10% of the population owning 52% of assets and the top 5% with almost 40%. Half of us own 5% of assets which suggests that the income distribution statistics are suspect and that we are a far less equal society than we like to believe.
http://www.stats.govt.nz/browse_for_stats/people_and_communities/Famili…
Be interested in an article on this topic from you David. http://mediawhores.co.nz/2016/11/23/roger-douglas-suggests-john-key-bil…
Not 100% sure I support the claim for this type of accounting, but the future liabilities should still be stated in some way. I guess the real question is if there is an intent to obfuscate.
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