Polarising Prosperity

The London Business School Review out this month includes an article on increasing Income Inequality. It concludes, emphatically, that we should be concerned.

The figures are staggering. In the USA the bottom 50% of households average income in 1980 was $16,000. By 2014, adjusted for inflation, this had risen [marginally] to $16,200. For the top 1% the comparable figures are $428,000 and $1,300,000. And mobility between generations is actually less where income inequality is greatest, in the USA and UK.

This has many knock on effects, such as on health. “An American male in the bottom one percent of the income distribution is likely to die before his 73rd birthday, whereas a man in the top one percent can expect to live to 87”.

LBS is a global citadel of uber-capitalist and uber-free-market thought. So for the LBS review to include such an article is encouraging. Income inequality in New Zealand is not [yet] comparable to the USA and the UK. They lead the world in this regard. However, under the National Party, New Zealand showed all the signs of heading in that direction. In the UK the Labour party, under Tony Blair, only made the situation worse. Can this New Zealand Labour Party led government find a different course? Jacinda Ardern worked in Tony Blair’s policy unit, so she is well placed to know what not to do.