The rich and the rest

When I started looking into income inequality several years ago, I thought I was searching for a story about rich and poor. I thought, in other words, that what was going on in the middle of New Zealand wasn’t interesting. Middle incomes had probably done pretty well, I figured, and the real problem was that incomes for the rich were soaring while going nowhere for people at the bottom.

The truth that I discovered, summarised in this graph, is that rather than being a story about rich and poor, New Zealand’s history over the last 30 years is a story of the rich and the rest.

Not only have low incomes barely increased over that time; income growth for the average person has also been negligible. The average income started out as a meagre $25,000 (after tax) a year in the mid-1980s, and by 2011 was just $30,000. Incomes for people in the richest 10% have doubled in that time.

No wonder that some politicians talk about ‘the squeezed middle’. Average New Zealanders are working harder than ever before, with longer hours and greater productivity, but the benefits of that effort are largely going to the richest 10–20%.

That, then, is the real story of the last 30 years: a system that has failed to deliver either for the poorest New Zealanders or those in the middle.

What can we do about it?


Further reading


max-headMax Rashbrooke has written for national newspapers and magazines in Britain and New Zealand, including the Guardian, the National Business Review and the Listener. He was the recipient of the 2011 Bruce Jesson Senior Journalism Award. He is the editor of Inequality: A New Zealand Crisis