Monday, May 24, 2010

Inequality and social mobility

Bill English isn't the only one bullshitting on inequality. Over on Kiwiblog, DPF spouts the old right-wing meme that inequality doesn't matter provided you have social mobility. This of course assumes that there is social mobility in New Zealand. And the evidence on that isn't very good.

The Standard looked at this last year, using Statistics New Zealand data on the movement of people between income deciles between 2002 and 2007. The short version:

most people are in the same decile five years later or very close to it. There’s some mobility among the lower deciles and some mobility among the higher deciles but very few people (only 18%) who were in the 10th (richest) decile in 2002 were below the 8th five years later. Only 10% of people who started off in the lower five deciles made it into the top two or three.

In fact, the mobility you can see is largely a factor of life-cycle – students moving into high paid jobs etc. The study breaks down the age groups and income mobility is very low with life-cycle movement taken out.

(Emphasis added).

That's just a five year period. I'd like to see more, but social class and inequality is largely unstudied in New Zealand because of our myth of being a "middle class society". That's something we need to change. Just as we can't talk about discrimination without facts, we can't talk about inequality either.

To add to the picture: the OECD looked at social mobility earlier in the year. While they didn't have direct data from New Zealand, they did have a good causal model, in which education policies play a key role. Unfortunately, New Zealand has a very strong relationship between parental socioeconomic background and educational achievement, which suggests lower than average social mobility. And the government seems intent on making that problem worse.

But apart from the evidence, DPF is just wrong. Inequality does matter, regardless of social mobility. The level of inequality in a society affects rates of physical and mental health. Societies with greater inequality have poorer educational outcomes and greater rates of violent crime and imprisonment (they also have low social mobility as well). This is not DPF-style ideological bullshit; it is a proven empirical fact. Inequality is bad for everyone. And social mobility doesn't solve that.