Income Distribution in New Zealand
Institute of Policy Studies, $24.00,
ISBN 0 908935 09 9
Too Right Mate
Bernard Gadd, John O’Connor, Anna Tarm
Hallard Press, no price,
ISBN 0 86477 041 3
Ministers and Members in the New Zealand Parliament
G A Wood
University of Otago Press, $24.95,
ISBN 1 877133 00 0
The rich are getting richer and the poor poorer. That is a given in post-Rogernomics New Zealand. Or is it?
George Barker is manager of the Treasury’s strategic analysis unit. His monograph for the Institute of Policy Studies, to be followed by more substantial research, is a first cut at the basic questions in a very complex area.
Most statements like the one in the opening paragraph are based on static analysis: a given quintile or decile of the population at a given time has a certain relativity to another quintile or decile and a different relativity at another time. Most assertions that the poor are getting poorer are based on those sorts of figures.
But individuals do not stay in their quintiles or deciles. They get jobs and move up; they get qualifications and move up; their jobs disappear and they move down. Perhaps the central point of social policy should be to maximise mobility, facilitating upward movement by individuals, rather than simple redistribution. The welfare state’s original guarantee of a job in a sense did that.
Longitudinal data of the sort now available in quantity in the United States and Britain (and very sketchily here), Barker says, shows that “the measured inequality of earnings at a point in time overestimates the degree of lifetime inequality to a degree that depends on the amount of mobility in earnings”. Inland Revenue figures show nearly half of bottom quintile earners in 1980 had risen to another quintile in 1987. Those poor got richer.
Barker scans a number of other questions that prod into the opening paragraph’s comfortable assumption. Among them: Is part of the poor getting poorer simply that more are unemployed, which reverses as unemployment drops? What happens if the proportion of old people or young changes? How do gender and ethnicity influence figures? They are important questions for the evolution of a just social policy in an internationalised economy where intervention mechanisms (such as the guaranteed job) are constrained.
For many liberals it is more comfortable to sit out that sort of debate and retreat into assumptions of the “four legs good, two legs bad” sort, acquired from books or one’s own settled past. Gadd et al offer nice ointment: “Labour socialistically throbs / for the lucre of corporate mobs / proletarianly strives / to sweeten Wall Street lives.” And Wall Street’s lackeys here: “I will not cease from tricks and lies, / Nor shall I be but underhand / Till we have made a brothel of / This erstwhile green & pleasant land.”
Alternatively, go utilitarian. Tony Wood’s guide to MPs, published midyear, is already out of date, to the tune of 45 or so new MPs. But it is an invaluable database, reaching back to 1911, and should be on any serious political inquirer’s bookshelf. One titbit: Paul East’s middle name is Clayton.
Colin James is a political columnist and edits New Zealand Books.