That's not fair...

Children go through a period of acute awareness of a type of justice as they discover that the world is unfair. They first discover that there are rules and that sometimes these can be used to their advantage. A complaint of “jimmy has two trucks and I have none” will likely motivate an adult to take one truck of jimmy for my benefit. Mostly we grow out of this childishness as we realise that trucks are earned not given.

So chalked on the sidewalk today as I went for a lunchtime stroll was, “10% of NZers have 60% of the wealth, while 40% have just 3%”. This is a statistic from a recent Statistics NZ survey on wealth distribution in NZ as at 2015 and is an accurate reporting of at least what part of the report says.

I don’t know the motivation of the sidewalk chalk messenger but I suspect they wrote it because they felt it was wrong in a childlike response to a supposed injustice. Because in itself the quote tells us nothing about the situation or even if it is a good or a bad idea. It needed at a minimum a qualifier such as “large wealth inequality can lead to rebellion” (think French revolution if you want a famous example, let them eat cake and all that)

But is wealth inequality a bad thing, accepting that excess inequality is, but is this split particularly bad and why. I don’t pretend to know but some thoughts occur.

One household is a group of students and another is a couple just about to retire. No one would expect equal wealth between these groups now would they. Likely as not the students have no wealth and the retiring couple might own a house at the very least. But this is just a run of life variance, kids have no money adults have more money, wow who knew.

How about one person purchased a house in Auckland 10 years ago for $300k and one purchased one in Invercargill for the same amount, both equal at that stage, but now the Auckland house is worth $1M and Invercargill house is worth $350k. Again so what?  A big wealth disparity but both have one house each to live in, neither is really any better off unless Ms Auckland sells up and moves to Invercargill.

One couple decide not to have kids and another couple has three kids. Pretty sure the no kids group will have more money but perhaps a less fulfilled life depending on your value set. Would the couple with the kids feel worse off, even though they will be less wealthy?

Choices can make a big difference for example the South Islands richest man (at one stage) never left home and eventually took possession of his parents’ house, purchased only one car that he used rarely, would walk to the library to read the paper and never left the country and seldom left his home town. No kids, no pets, no hobbies (except making money), no life, but he died really wealthy but so what. I have met a lot of poor people who were much wealthier than him.

But I hear you say, there are really poor people who have nothing and really rich who have everything. Well the poverty is relative is my first comment, better to be poor in NZ than India or China and they have really rich people too.

Those really wealthy people also pay a lot of tax (yep even with their loopholes and fancy accountants) As we have also heard this week that 40% of households pay no net direct tax. The wealthy also invest in business etc which provide jobs and having a lot of gold bars or fancy cars does not make you healthier or necessarily happier.

Sure wealth inequality might not be a good thing but we need to get past the sandpit stage and provide better arguments than a bald quote designed to elicit whining “that’s not fair…” type response.