Everybody from the top 10% to the top 0.01% have to work for their living these days with much of their income coming from wages.
Source: The World Wealth and Income Database.
% of top incomes from wages, salaries and pensions
23 May 2016 Leave a comment
in applied price theory, applied welfare economics, economic history, entrepreneurship, human capital, industrial organisation, labour economics, labour supply, occupational choice, poverty and inequality, survivor principle Tags: entrepreneurial alertness, envy, superstar wages, superstars, top 1%, top incomes
Bryan Bruce’s boy’s own memories of pre-neoliberal #NewZealand @Child_PovertyNZ
23 May 2016 Leave a comment
in applied welfare economics, comparative institutional analysis, economic history, economics of regulation, income redistribution, industrial organisation, politics - New Zealand, poverty and inequality, Public Choice, rentseeking Tags: child poverty, conspiracy theories, expressive voting, family poverty, Leftover Left, living standards, neoliberalism, Old Left, pessimism bias, rational irrationality, reactionary left, top 1%
New work by Chris Ball and John Creedy shows substantial *declines* in NZ inequality.
initiativeblog.com/2015/06/24/ine… http://t.co/f94fw4Bhae—
Eric Crampton (@EricCrampton) June 24, 2015
You really are still fighting the 1990 New Zealand general election if Max Rashbrooke makes more sense than you on the good old days before the virus of neoliberalism beset New Zealand from 1984 onwards.
Source: Mind the Gap: Why most of us are poor | Stuff.co.nz.
Bryan Bruce in the caption looks upon the New Zealand of the 1960s and 70s as “broadly egalitarian”. Even Max Rashbrooke had to admit that was not so if you were Maori or female.
The present rate of technology adoption is nearly a vertical line —@blackrock https://t.co/3oS3YAI4ld—
Vala Afshar (@ValaAfshar) January 22, 2016
Maybe 65% of the population of those good old days before the virus of neoliberalism. were missing out on that broadly egalitarian society championed by Bryan Bruce.
As is typical for the embittered left, the reactionary left, gender analysis and the sociology of race is not for their memories of their good old days. New Zealand has the smallest gender wage gap of any of the industrialised countries.
The 20 years of wage stagnation that proceeded the passage of the Employment Contracts Act and the wages boom also goes down the reactionary left memory hole.
That wage stagnation in New Zealand in the 1970s and early 80s coincided with a decline in the incomes of the top 10%. When their income share started growing again, so did the wages of everybody after 20 years of stagnation. The top 10% in New Zealand managed to restore their income share of the early 1970s and indeed the 1960s. That it is hardly the rich getting richer.
“Bourgeois Equality” lecture
28 Apr 2016 Leave a comment
in applied welfare economics, development economics, economic history, economics, economics of regulation, entrepreneurship, growth disasters, growth miracles, history of economic thought, industrial organisation, poverty and inequality, survivor principle Tags: Deirdre McCloskey, industrial revolution, The Great Enrichment
@Economicpolicy shows that top CEO pay has been a miserable rollercoaster for 15 years
25 Apr 2016 Leave a comment
Why tertiary education is ‘out of reach for many’
24 Apr 2016 Leave a comment
in economics of education, human capital, income redistribution, labour economics, minimum wage, poverty and inequality, rentseeking Tags: Director's Law, IQ, rational irrationality, social justice warriors
The majority of New Zealanders do not qualify for university. Perhaps Labour and the Greens should spend more time worrying about those who do not achieve university entrance standard.
Source: School leavers with NCEA level 3 or above | Education Counts.
Anyone who achieve university entrance standard is among the intellectual elite. They have a head start in life. Labour and the Greens are preoccupied with giving those with a head start in life more freebies.
Did the rise of welfare state cause more inequality in wealth?
18 Apr 2016 Leave a comment
in fiscal policy, labour economics, labour supply, macroeconomics, poverty and inequality, public economics Tags: growth of government, income inequality, measurement error, Ricardian theory of budget deficits, Social Security, top 1%, wealth inequality
Markus Poschke and Barış Kaymak have just put out a paper arguing that increased social spending is a major driver of wealth inequality:
Another important and often overlooked third factor is the rise in the generosity of government transfers since 1960, mostly due to the expansion of public pensions (social security) and the introduction of public health insurance for the elderly (Medicare).
Combined spending on these two programs accounted for almost 9% of US GDP in 2010, up from less than 3% in 1960…
These government programmes tend to curb the need to rely on personal savings for retirement, especially among low and middle-income households, and might thus explain why their share in total wealth has declined.
This makes a good to good degree of sense. I have previously argued that using the arguments of Edward Prescott that it is not wise for people on ordinary income to save for their retirement when they can go down to the local Social Security office and claim an old age pension.
51% of nonretirees doubt they will receive Social Security… on.gallup.com/1NcwzEa #GallupDaily http://t.co/ZhKnHYtr1X—
(@GallupNews) August 13, 2015
It is even less wise to save that for retirement if those savings reduce your eligibility for an old age pension. Far better just to invest in a nicer house and pass it on to your children. Poschke and Kaymak note that measures of private wealth inequality miss these claims to old age pensions:
… statistics on wealth inequality that do not capture households’ claims on the public sector are incomplete and overstate top wealth shares.
This is not a new argument. Back when the Ricardian theories of budget deficits came to prominence and before that in debates on theories of the public debt, the more Keynesian sides of those arguments did argue that people were irrational for not including their old age pension entitlements under social security schemes in their calculations of their wealth.
Some of their taxes were paying for their future old age pension and were another form of wealth rather than a tax. As such, taxpayers should regard this part of their taxes as investments and not cutting back their labour supply in response as they do to other taxes.
How much of the rise in wealth inequality is due to this failure to measure Social Security wealth as represented by old age pension entitlements? Their estimate is about 25%:
…technological factors play a dominant role not only for changes in income inequality, as is well known, but also for wealth inequality. As high-earning households save part of their additional income, their share of wealth also rises.
This channel accounts for about half of the total increase in wealth inequality. Tax cuts and the expansion of transfers each account for about half of the remainder…
While tax cuts encourage saving, larger transfers reduce saving incentives for retirement, in particular for low and middle income groups. This implies that these groups’ share of private wealth declines.
Note though that this is partly due to the fact that measures of private wealth inequality, like those compiled by Saez and Zucman, do not include claims to future government transfers, like social security, which constitute wealth for their owners.
@BernieSanders @HillaryClinton Who is below the poverty line in America? #fightfor15
18 Apr 2016 Leave a comment
in labour economics, politics - USA, poverty and inequality Tags: child poverty, family poverty, single mothers, single parents, social insurance, unemployment benefit, welfare state
@FairnessNZ NZ leads world in closing the gender pay gap #equalpayday @greencatherine
13 Apr 2016 Leave a comment
in discrimination, economic history, gender, human capital, labour economics, labour supply, politics - Australia, politics - New Zealand, politics - USA, poverty and inequality Tags: Australia, British economy, gender wage gap
@billclinton absolutely nails #blacklivesmatter
09 Apr 2016 Leave a comment
in discrimination, economics of crime, law and economics, politics - USA, poverty and inequality Tags: 2016 presidential election, Bill Clinton, crime and punishment, law and order, police shootings, street gangs
@BernieSanders @GrantRobertson1 why does anyone bother to work in #Denmark?
06 Apr 2016 Leave a comment
Do minimum wages stimulate productivity? @BernieSanders @livingwageNZ
06 Apr 2016 Leave a comment
in econometerics, labour economics, labour supply, minimum wage, politics - New Zealand, politics - USA, poverty and inequality Tags: living wage, The fatal conceit, The pretence the knowledge
@garethmorgannz’s @grantrobertson1’s #UBI is worse than I thought @JordNZ
03 Apr 2016 Leave a comment
in applied welfare economics, labour economics, labour supply, politics - New Zealand, poverty and inequality, welfare reform Tags: expressive voting, New Zealand Labour Party, rational irrationality, universal basic income
The Universal Basic Income of $11,000 per adult proposed by the Morgan Foundation and floated as a idea to consider by the New Zealand Labour Party leaves the poor way below even that the stingy as the poverty line switch is that 50% relative poverty line. Little wonder that the Labour Party said that increasing the Universal Basic Income to avoid leaving current beneficiaries worth off would lead to a very high tax rate.
Source: A Universal Basic Income may be a good idea – but we will still need social security that works.
@JordNZ best way to talk yourself out of #UBI is listen to advocate list new taxes required
01 Apr 2016 Leave a comment
in economics, income redistribution, labour economics, labour supply, politics - New Zealand, poverty and inequality, Public Choice, public economics, welfare reform Tags: universal basic income
Utopia, you are standing in it! 
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