From ed­u­ca­tion flows wealth

Auckland City Harbour News - - NEWS -

Fair­ness in the way wealth and in­come is spread in our so­ci­ety is un­der the spot­light in this elec­tion.

New Zealan­ders share un­equally in both and many of us feel deeply about it.

But it seems few of us un­der­stand the true scale of in­equal­ity.

AUT aca­demic Peter Skilling sur­veyed just over 1000 peo­ple and it turns out that on av­er­age we think the top fifth of New Zealan­ders by wealth own just over half the pie (51.8 per cent) and that the next fifth down own 18.3 per cent of it.

We think the mid­dle fifth own 14.6 per cent, with the rest of the wealth split among the bot­tom two-fifths, our poor. If only that were true. Skilling says the most re­cent data from Statis­tics New Zealand in 2007 in­di­cated the split was that the rich­est fifth owned 70 per cent of the wealth, with 18 per cent in the hands of the next fifth and 10 per cent owned by the mid­dle fifth.

Just 2 per cent is owned by the bot­tom two-fifths com­bined.

When asked how they would like the pie to be shared, peo­ple told Skilling a split of 30 per cent for the top fifth, 40 per cent for the next two-fifths with the fi­nal 30 per cent split among the lower ech­e­lons.

Skilling also asked peo­ple to es­ti­mate where they fit­ted in to the house­hold in­come peck­ing or­der.

He found that while the poor know they are poor, many peo­ple in the top two in­come brack­ets thought they were in lower ones.

Just three in eight of peo­ple from the top 40 per cent of house­holds by in­come thought they were in the top 40 per cent.

There’s a great deal of the­o­ris­ing that could be done on Skillings’ find­ings but the most tempt­ing one is that we are a pop­u­lace liv­ing in de­nial and ig­no­rance.

That must make it harder for the ‘‘leftie’’ par­ties cam­paign­ing on in­creas­ing eco­nomic fair­ness through higher taxes for the rich, lifting the min­i­mum wage and strength­en­ing em­ployee rights.

It must also make it eas­ier for the cur­rent Gov­ern­ment to laud our ‘‘rock star’’ econ­omy with­out feel­ing it has to ex­plain why so many peo­ple aren’t get­ting much ben­e­fit from it. Let’s be clear. Na­tional Party vot­ers do care about in­equal­ity.

But their cho­sen party places a greater em­pha­sis on equal­ity of op­por­tu­nity and wor­ries less about un­equal out­comes.

For me, Skillings’ survey has some pro­found mes­sages for fam­i­lies in the bot­tom three-fifths of so­ci­ety, those with­out much in the way of wealth to pass on to their kids.

The first is that ig­no­rance and de­nial favour po­lit­i­cal sta­tus quo, so don’t ex­pect politi­cians any time soon to be given a man­date to come in and en­rich you and your loved ones.

The sec­ond is that in such an un­equal so­ci­ety, the fi­nan­cial con­se­quences of ‘‘bad choices’’ for you and your kids are pro­found. Which brings me to the third. For the bot­tom three-thirds by wealth and in­come, ed­u­ca­tion is prob­a­bly go­ing to be the only as­set they can give their chil­dren.

From ed­u­ca­tion flows wealth, be it a univer­sity de­gree or an abil­ity to read, write and add up and good vo­ca­tional train­ing.

Life’s un­fair – more un­fair than we be­lieve it is and more un­fair than we want.

Har­ness­ing a fam­ily’s en­ergy and re­sources around the ed­u­ca­tion of the youngest gen­er­a­tion is one of the few routes poorer fam­i­lies have to see­ing their kids pros­per.

Idyl­lic views: Win a walk­ing week­end in the Bay of Is­lands.

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