17 Mar 2016
by Jim Rose
in applied welfare economics, economic growth, economic history, labour economics, poverty and inequality, unemployment
Tags: antimarket bias, pessimism bias, rational irrationality, The Great Enrichment, top 1%
Source: Do inequality and poverty matter? | Pundit – Brian Easton (2016) .
I will outsource to Brian Easton, the CTU, the CTU’s Bill Rosenberg and Closer Together Whakatata Mai – reducing inequalities because the continual correction of Max Rashbrooke on poverty and inequality is becoming tiring.
Source: Love in the time of crisis, James Robins, Wednesday, 16 March 2016, Newstalk NZ.
Inequality has not risen for at least 20 years as Bill Rosenberg tweeted. The rise in inequality in the late 1980s and early 1990s was followed by an employment boom that lasted to 2009.
Unemployment was as low as 3 1/2% for several years despite a large increase in labour force participation. Furthermore, the gender wage gap in New Zealand fell rapidly to now be the smallest in any industrialised country.
As the Facebook photos show, there has been strong income and wage growth despite the grizzling of the left. The return of income growth and wages growth after 20 years of real wage stagnation followed the economic reforms of the 1980s and the passage of the Employment Contracts Act in 1991.
As the CTU shows below, the economic reforms in the 1980s put an end to a sharp decline in the relative economic performance of the New Zealand economy.
17 Mar 2016
by Jim Rose
in applied welfare economics, economic history, economics of education, entrepreneurship, human capital, labour economics, politics - New Zealand, poverty and inequality
Tags: pension fund socialism, top 1%, Withering away of the proletariat
New Zealand working class is wealthier than the entire capitalist class. Their human capital, shown in the chart below as the human capital of the unskilled and non-degree workers, far exceeds the value of the physical capital stock of New Zealand.
Source: Lˆe Thi. Vˆan Tr`ınh, Estimating the monetary value of the stock of human capital for New Zealand, University of Canterbury PhD thesis (September 2006).
Only part of this physical capital stock is owned by the capitalist class given we live in the era of pension fund socialism. About a 3rd of that physical capital stock is owner occupied homes.
Source: Lˆe Thi. Vˆan Tr`ınh, Estimating the monetary value of the stock of human capital for New Zealand, University of Canterbury PhD thesis (September 2006).
The only reason that the share of unskilled and non-degree workers is in any way declining is the withering away of the proletariat. More and more people are joining the middle-class and going on to higher education.
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17 Mar 2016
by Jim Rose
in applied welfare economics, economic history, economics of education, entrepreneurship, human capital, labour economics, politics - New Zealand, poverty and inequality, urban economics
Tags: household wealth, housing prices, pessimism bias, top 1%
Tring Le found that the human capital stock was consistently 2.6 times the value of the physical capital stock of New Zealand.
I decided to apply that ratio to the net capital stock of New Zealand estimates of Statistics New Zealand back to 1987 to see what we get. It is pretty standard for the value of human capital to be two to two and one-half times the value of physical capital.
Source: National Accounts (Industry Benchmarks): Year ended March 2013 and Lˆe Thi. Vˆan Tr`ınh, Estimating the monetary value of the stock of human capital for New Zealand, University of Canterbury PhD thesis (September 2006), Table 4.8: Human and physical capital stocks.
All the above chart says it is most wealth in New Zealand is held by ordinary people either as their human capital or the value of their homes.
17 Feb 2016
by Jim Rose
in applied welfare economics, development economics, economic history, economics of regulation, entrepreneurship, growth disasters, growth miracles, industrial organisation
Tags: billionaires, entrepreneurial alertness, India, superstars, top 1%
16 Feb 2016
by Jim Rose
in applied welfare economics, economic history, economics of regulation, entrepreneurship, financial economics, human capital, industrial organisation, labour economics, poverty and inequality, survivor principle
Tags: billionaires, British economy, entrepreneurial alertness, superstars, top 1%
Inheriting wealth is not what it used to be in Britain. There are all these upstarts running businesses or working in the City.
Source: Caroline Freund and Sarah Oliver, The Origins of the Superrich: The Billionaire Characteristics Database (2016).
15 Feb 2016
by Jim Rose
in applied price theory, development economics, economic history, entrepreneurship, growth miracles, human capital, industrial organisation, labour economics
Tags: billionaires, China, entrepreneurial alertness, superstars, top 1%
20 Jan 2016
by Jim Rose
in applied welfare economics, economic history, labour economics, politics - New Zealand, poverty and inequality
Tags: Employment Contracts Act, employment law, Leftover Left, rational ignorance, rational irrationality, top 1%, union power, Withering away of the proletariat
The union movement posted two excellent charts during the last election showing how well things have gone since the 1980s economic reforms and their consolidation in the early 1990s.
The charts show that real wage growth returned in the early 1990s after the passage of the Employment Contracts Act and the consolidation of government finances. This was after two decades of wage stagnation in what the unions regards as the good old days.
Furthermore, as the union chart shows, the average incomes of the top 1% in New Zealand is a pretty stable for several decades. Whatever else is happening New Zealand, you cannot blame it on the top 1% because they are lazy. What increase there was in average top incomes in New Zealand was followed by the return of real wage growth in New Zealand and a long economic boom where the unemployment rate drop below 3.5%
The main bugbear is housing affordability which is a result of the Resource Management Act passed in 1993 as the union chart shows. The unions, the Labour Party and Greens all support the laws that result in this housing unaffordability.
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