Stats Chat on inequality

Stats Chat does a gentle fisk of the Herald’s article on income inequality. They note:

Firstly, any comparison of money in 2006 to money in 2013 that’s not inflation-adjusted in some way is pretty pointless. The CPI went up 19% over that period.

Secondly, minimum wages are pretty obviously relevant. At the last Census, the minimum wage was $9.50; at this Census it was $13.50, a nominal increase of 42% and a real increase of  19%.

Their summary:

So, inequality in NZ is substantially higher than it used to be, and there are a lot of reasons to think this is bad, but the increase was in the 1980s and 1990s, not since 2006.  And this information is not hard to find.

I believe social mobility is the more important thing to measure than income inequality. Of course a 16 year old school leaver earns a lot less than a 45 year old executive. What is more important is whether those in the lower income deciles stay in them all their lives unable to break out and improve their income, or do you have social mobility.

The data for NZ is that we have a reasonable degree of social mobility, which I blogged on here. 74% of families in the bottom decile were not there seven years later.