One of the things that banks like to do is send out research notes about what they think the “key themes” of the future will be. The ANZ research note issued earlier this month is typical of the genre, with a lot of phrases like “change is the new normal” and “the trend is your friend”.
But, fascinatingly, the final one of its six key themes is “addressing income inequality”. The bank says:
A degree of inequality can be expected (and is necessary) in any market economy. However, rising income inequality dampens economic mobility, reduces education standards, and makes an economy less flexible. Rising social tensions can also lead to political instability. There are good economic reasons for addressing inequality. New Zealand looks to be pushing a number of the correct buttons but has a way to go. Job creation, raising educational achievement, and encouraging flexibility across the education sector need to be at the epicentre of a multi-pronged strategy.
One could quibble with much of the analysis, of course. The focus on education, while not completely without merit, is in many ways a distraction, an attempt to shift the debate to social mobility, as opposed to directly addressing inequality. We have to remember that it’s the actual size of our income gaps that are the problem, and you don’t change them by making it easier for people to move up and down the ladder.
Nonetheless, the research note is a striking demonstration of how central inequality has become to our public debate.
In fact, the note points very much to what we will see this year, and the ones after: lots of people talking about inequality, but many of them trying to divert the debate into related, but less important areas.