Seymour on inequality stats

David Seymour makes a good point:

We can congratulate Mr Little on focusing on the need for wealth creation, but not for his use of entirely bogus statistics from Oxfam on global wealth distribution, suggesting that the richest 1% will soon exceed the bottom 99%. The Oxfam data shows that China has zero people in the lowest decile of world income, while the US has 7.5% of their population in that bracket. Why? A modern financial system. Because these statistics don’t count human capital, every student borrowing to get an education has negative net worth, which puts them below all those people in China and India with zero net worth. The same applies to every entrepreneur, and many small businesses which are borrowing and investing to build up a business. If Labour is going to embrace small business, they should start by understanding it.

A good example of how flawed the data can be.

The rhetoric included the usual bogus statistics on the incomes of the top 10% versus the bottom 10% in New Zealand. But we know that, as with wealth data, these aggregate statistics mainly show age distribution. Most of us over the life cycle go from negative net worth and very low incomes, to a peak in income in late middle age, a gradual decline until retirement, with net worth peaking around retirement age. That is largely what these statistics are measuring.

Yep. Those who argue incomes must be more equal are saying the 16 year old must be paid almost the same as the 45 year old with two decades of work experience.