24 Mar 2015

A history of income inequality

From Nights, 8:42 pm on 24 March 2015

income inequality
Food kitchen

Brian Easton EconomicsIndependent economic scholar Brian Easton has studied income distribution and economic inequality in New Zealand since the 1930s.

He says that before the second world war income inequality was greater than it is today. After the war there were more jobs available, so anyone who wanted a job could have one. Also large numbers of women were joining the workforce for the first time, and urban drift by Maori meant more people were earning an income.

The biggest impact on income inequality in New Zealand came in the late 1980s/early 90s, as Rogernomics evolved into Ruthanasia -  income tax cuts for the well off and the cutting of a tax on dividends, followed by the cutting of social welfare payments in 1991 led to a wider gap between rich and poor. The number of children living in poverty had doubled by the early 1990s. The 1987 stock market crash also had a negative impact, and many people were worse off in the 90s than they had been in the 80s.

Income inequality in New Zealand has remained relatively stable since the 90s.

Brian Easton talks to Brian Crump.