In the arguments about how wealth and income are shared out, one of the common lines is that poverty matters, but inequality, in the sense of the gaps across all of society, is a distraction. This is usually buttressed with a reference to China: just look, people say, at the way that hundreds of millions of people have been pulled out of poverty, even as the gap between the rich and the rest has widened. Inequality doesn’t matter; fostering economic growth is the key.

This week’s report from Oxfam – the one pointing out that 62 billion years have as much wealth as half of the world’s population combined – neatly destroys that argument.

It acknowledges that, between 1990 and 2010, the number of people in the world living below the extreme poverty line halved. But, crucially, it also points out:

Yet had inequality within countries not grown during that period, an extra 200 million people would have escaped poverty. That could have risen to 700 million had poor people benefited more than the rich from economic growth.

The point here is that although countries used some of their economic growth to lift people out of poverty, a disproportionate amount of that growth went to the already rich. Had the growth been fairly shared, poverty would have fallen even more.

The reason that growth wasn’t shared fairly is to do with inequality: the failure to curb monopolies that benefit the wealthy; a lack of bargaining power for workers that sees them unable to claim their share of company profits; weak tax and benefit systems that don’t provide an adequate safety net or recognise the gains everyone gets from public infrastructure; corruption and other ways that wealth influences power. Underlying all that are attitudes about inequality – beliefs that some people are more deserving than others.

So, yes, you may need economic growth to lift people out of poverty; but if you don’t think about how it will be shared, it’s going to be severely limited in its effectiveness. Shared economic growth is a key challenge of the years ahead – and that forces us to think about inequality.

A little while back, Finance Minister Bill English gave a speech in which he claimed that “poor urban planning is one of the significant drivers of inequality”. His logic is that bad urban planning drives up the cost of building new houses, limiting supply and thus causing rents to rise sharply and house prices to skyrocket. This effect is felt most strongly by the poor, who pay more of their income on housing costs, and so it widens income gaps.

Leaving aside whether urban planning is really to blame for the housing crisis, these claims are part of a wider government argument that housing is a key driver of inequality – an argument they make, sceptics would say, because it’s an area they happen to be taking action on already. Now, it’s true that, as English says, “the gap between incomes measured before housing costs and after housing costs is growing. Housing costs are becoming a larger proportion of incomes – and that matters the most at the bottom end of incomes among people who have few choices.” So it’s good to see the government recognising this fact.

But just because housing costs are making inequality worse doesn’t mean that they are the main driver, or even “significant”. Running the numbers on this, which I’ve just got around to doing, makes the point. The 2015 Household incomes in New Zealand report shows that in 1982, someone just on the edge of the poorest tenth of the country had housing costs of $4,200, on income post-tax of around $15,000.

By 2013, that same person had housing costs of $7,300 on around $17,700 of post-tax income. So housing costs are clearly a massive issue for poor people, consume a large chunk of their income, and have increased for them by around $3,000 in 30 years. (And, the maths show, have left poor people poorer than they were 30 years ago, despite all the promises of economic growth and so on.)

But housing costs have increased at the richer end a little bit as well, so in the end housing costs by 2013 were widening the rich-poor gap (that is, pulling the poor down more than they pull down the rich) by about $2,200 more than they did in 1982. (If that statement isn’t completely clear, well, there’s no simpler way to put it, sadly.) That’s housing’s contribution to increased inequality – $2,200. But in the same period, the overall rich-poor gap widened by nearly $21,000.

That implies that the increased housing cost contributed about one-tenth of the overall increase in inequality in the last 30 years – not nothing, but hardly enough to qualify housing in general – let alone poor urban planning, which is just one part of the housing issue – as “one of the significant drivers” of inequality.

The combined wealth of New Zealand’s Rich Listers in 2015 turns out to be $57.4 billion, around $2.4 billion higher than initially estimated and a striking 12 per cent increase on the previous year’s figure.

When the Rich List was announced in July this year, the National Business Review (NBR) put the value of its 184 individuals and families at $55 billion. (The cut-off for inclusion is having a fortune over $50 million.)

But when I tallied up the entries for each individual/family listed on the website (as preparation for some data analysis), the total came to $57.4 billion.

The explanation, kindly provided to me by NBR staff, is that there were a couple of late-breaking big revaluations owing to shifts in the New Zealand dollar and other currencies. (Since many of the Rich List hold part of the fortunes overseas, shifts in exchange rates can make a big difference to their net worth.) These revaluations made it onto the website figures but not the commentary or the print version.

The result of this correction is that the year-on-year rise in the Rich List’s value was 11.7 per cent over 2014’s figure of $51.2 billion. That’s a pretty striking increase at a time when Reserve Bank figures show households have in the last few years reverted to going into debt rather than saving, and probably only people who own houses in desirable parts of Auckland will have seen their wealth increase by anything like 12 per cent.

Some would say that such a big shift in value just because of currency changes points to the inherent inaccuracy of the Rich List’s figures. But I think it just reflects the fact that these wealthy individuals do have huge variations in their net worth, with sums unimaginable to most of us appearing and disappearing in the blink of an eye.

And it’s worth noting that Thomas Piketty, one of the world’s foremost experts on wealth, uses such surveys in his work and believes they help “impose some discipline on public debate”. Certainly the fact that the Rich List’s value has (once adjusted for inflation) risen from $12.6 billion in 1986 to $57.4 billion today is a useful one to know, and gives us a sense of how much fortunes have increased at one end of the scale (even as debt has increased at the other).

Following the announcement that the Green Party’s Russel Norman would be stepping down, to be replaced by Marama Davidson, I did this chart of Parliament’s gender breakdown.

It doesn’t make pretty reading.Only the Greens have more female MPs than male. Labour have 12 female MPs to 20 male (although if they had won more seats, their list was designed to get pretty close to gender parity at around the 40-seat mark). National have 17 female MPs to 42 male. New Zealand First has three female MPs out of 12 in total.

Overall, just 41 of the 121 MPs are female – almost exactly one-third.

Responding to this graph on Twitter, National Party member Hamish Price said the answer was to do a serious outreach campaign to women who could stand for Parliament but don’t because it seems like a forbidding and complex process.

The response from the other side of the debate would be that such outreach is all very well, but doesn’t address the deep-seated sexism that exists in politics and which blocks women from getting into electable positions.

It’ll be interesting to see where that debate goes.

This document summarises the key points on inequality and poverty from the 2015 Household Incomes Report, published by the Ministry for Social Development.

Inequality

On most measures, income inequality is either at the highest level it has been since records began in 1982, or is very close to that level. It has also risen sharply in both the last two years.

The government generally claims that inequality is not increasing. The Household Incomes Report, which is quite rightly cautious, continues to say there is no “conclusive” evidence of rising inequality. But as the graph (at left) of the Gini coefficient shows (in which 0 is perfect equality and 100 is perfect inequality), it is starting to look like an upward trend, and the Report says that one more year of data at this level will be enough for it to conclude that inequality is indeed rising.

One way to look at what has happened with income inequality recently is to consider the contrasting fortunes of different groups, as in the table below.

As can be seen, since the crisis (and the beginning of the current government’s term in office), those in the poorest groups have seen average income increases of just $200, while the increases have been of the order of $5,000-6,000 at the richest end. (There was no information for the poorest 10th in 2014 because of problems with the way that benefits income was recorded.)

Poverty

Total poverty has been relatively steady since the global financial crisis, under the measures that look at how many households (HH) have less than 50% or less than 60% of the typical household’s income (adjusted for household size). However, poverty is far higher than in the 1980s.

Year       HH under 50%   HH under 60%

1986                       6%                          13%

2009                       10%                        19%

2014                       10%                        20%

On the under 60% figure, and assuming a population of 4.42 million, there are approximately 880,000 New Zealanders in poverty.

When housing costs are taken into account, the above trends and figures are roughly the same, with the difference that the under 50% rate has gone from 13% in 2009 to 15% in 2014, indicating that housing costs make the biggest difference among the very poorest, and are increasing. After housing cost poverty is roughly double its 1980s level, again pointing to housing’s growing role.

Child poverty

There are many different measures for child poverty, as the table below shows. However, the overall trend is for an increase in child poverty of somewhere between 10,000 and 45,000 children since 2009. The exception is the ‘anchored line’, which looks at how many children are under the 2007 poverty line (as opposed to how many are under today’s poverty lines). But even here, where one would expect poverty to decline consistently as the economy grows, the figures look static.

Reference: Household incomes in New Zealand: Trends in indicators of inequality and hardship, 1982 to 2014, MSD

Did the small child poverty package in May’s Budget makes the issue go away for National? Not in the slightest, according to the polling shown in the graph below. Concerns about poverty and inequality, which had already skyrocketed since 2010, have only increased in recent months – and the last poll was taken in June, when the Budget would have been most in people’s minds.

Note, also, that concern has continued to rise since last year’s election, when you might reasonably have expected it to die down for a while, as the campaigners in that field took a bit of a break.
So clearly, this isn’t an issue that is going to go away quickly. And that’s not surprising. The Budget’s announcement that core benefit rates would rise for the first time in 40 years marked a huge ideological shift, after decades of arguments that keeping benefits low was important for ‘incentives’. But in practical terms, it didn’t deliver much: just $25 a week, some of which would be clawed back in reduced housing allowances and so on.
And when it comes down to it, I don’t think that what lies behind the huge concern about poverty and inequality is a whole bunch of people thinking, ‘Gosh, if only poor households had another $25 a week, everything would be all right.’ That’s not what is going on in people’s minds. The concern goes much deeper than that. People see kids going to school without food (or at least they did while Campbell Live was running). They see increasing concentrations of advantage and disadvantage. They see the unbelievable rates of Third World childhood diseases (thanks to Bryan Bruce’s documentaries).
While I wouldn’t argue that the bulk of the public understands the issues in detail or knows how to tackle them, I think the concern about inequality and poverty is a deep one. The words have entered the mainstream narrative about this country (and rightly so), and changing that will require big, structural shifts, not $25 here and there.
In electoral terms, it’s a different matter. The Budget’s package may be enough to keep swing voters happy and stop them moving over to Labour. But without bigger change, the issue will continue to haunt our government, whichever party may be running it.

At the end of last week, there was a brief flare of outrage about a shot from Beyonce’s new video (available only on Tidal), in which she apparently pours a bottle of champagne worth thousands of dollars into a swimming pool. As someone observed on Twitter, when there are people starving and homeless, this isn’t such a great look.

It has to be said that, on the scale of ridiculous and wasteful things that celebrities do, Beyonce’s act, though particularly blatant, isn’t a huge misdemeanour. But it’s fascinating that it attracted such criticism, when you consider that Beyonce is an especially glittering celebrity, one often lauded for her stance on issues such as feminism.

It’s fascinating, too, to think about this criticism in the context of another incident of a celebrity deliberately spilling drinks into the pool. I’m thinking, of course, of the gesture that in many ways sums up the 1980s, the moment in the video for Club Tropicana when George Michael pours his cocktail into the rippling blue waters on which his lilo floats.

While I was barely sentient at the time the video came out, I don’t recall that at the time when I did finally see it, sometime in the 1990s, there was any outrage expressed, nor does a quick Google search throw up any such commentary – and nor would one expect it. At the time, such extravagance probably looked exciting, challenging, a one fingered salute to the conventionality and respectability of previous eras. It would have been legitimised, too, by the ideology sweeping the world at the time, the one that held that greed was good and that concerns about inequality either reflected a small-minded desire for conformity or were simply irrelevant.

We live in a changed world now. Most people are aware, on some level, of the dark side of George Michael’s insouciant flip of the wrist – the spiralling gap between the haves and have nots that has opened up in the last 30 years. In this light, Beyonce’s champagne spillage looks much less exciting, and much more offensive.

This is not to say that I expect anytime soon a revolt against the celebrity system and its excesses, which go far, far beyond anything one hip hop star might do in a music video. And it’s dangerous to read too much into two snapshots. But I still think that last week’s reaction is another pointer to the public’s decreasing tolerance for inequality – and that this might be a good thing.