Wednesday, May 23, 2012

National increases inequality

Campbell Live has been running a series on living on the median income in New Zealand, which pointed out that the median household income fell last year, while the average rose. Browsing back through old Household Economic Surveys, it looks like the median household income has dropped by roughly $1000 over the past few years, from $63,900 in 2009 to $62,900 in 2011 (these are from rounded decile boundaries, so its pretty crude, but the pattern is clear).

(I am assuming here that these are real figures. If not, then inflation makes the change even more extreme, as can be seen using the RBNZ's online calculator).

Meanwhile, the average household income has risen by the same amount, from roughly $78,019 in 2009 to $79,159 in 2011.

We've seen this pattern before, during the 80's and 90's. When the median falls while the average rises, it means that incomes are dropping at the bottom and growing at the top. Or, in English: the rich are making out like bandits, while ordinary kiwis are going backwards, making us a more unequal society.

This is what National does to New Zealand. They did it in the 90's, they're doing it now. And its not just unfair that they arrange policy to advantage themselves and their rich mates at the cost of the rest of us; such inequality imposes real costs on everyone, in the form of worse health, education, and violence in our society.

Tomorrow's budget promises more of the same, with public services slashed to protect tax cuts for the rich. It will do nothing to reduce this inequality, or restore the living standards of ordinary kiwis.