Nigel Latta presented an excellent documentary on the growing inequality in the New Zealand economy with the redistribution of income from low income families to high income families.
Since 1982 real GDP has grown by about 35% but about 50% of that extra income has been acquired by the top 10% of income earners – their average incomes increased from $56,300 to $100,200. The lowest 10% of earners saw their incomes grow from $9,700 to $11,000 – see graph.
The lost share of the national income with the lower income groups is indicative of economic conditions in the early 1990‘s and the 1991 Employment Contracts Act which acted as a catalyst to the loss of union power – see graph above. When you consider the proportion of income that is spent by both groups you will find that the lower income groups consume a much greater percentage of the their income than their higher income counterparts. Therefore we take more consumption out of the economy with slower growth and ultimately a loss of jobs = higher unemployment. There are also some telling stories of hardship amongst many New Zealanders. Well worth a look.
Click the link below to view the programme.