Younger generations less well-off

most wealthy and those in the middle or low income bracket.

But McKinsey’s research highlights the increasing numbers in a generation growing up poorer than their parents, with the hardest hit being young, lesseducated workers.

Researchers pointed out several reasons for why incomes stopped rising, including the recession, shrinking households and digital technologies.

Demographic changes have affected incomes through the decline in the number of working-age adults per household and shrinking household size means less can be gained from sharing resources.

Digital technologies have affected labour demand in three ways: automating work, enabling new, leaner organisational structures and raising demand for high-skill workers (with fewer of them in organisations).

The McKinsey report said the the impact of this type of income inequality could have a corrosive effect: a survey done showed those whose income had not advanced were losing faith in parts of the global economy. Almost a third said they thought their children would also advance more slowly in the future. Data from the Ministry of Social Development, however, shows a different picture for New Zealand.

According to results of Household Economy Surveys from 1982 to 2014, all income groups in New Zealand gained over time, with the highest income group gaining more than the rest. New Zealand fared far better in post-crisis income gains, with a median gain of 9 per cent, while the median incomes of the UK and Ireland fell.