Inequality vs Social Mobility

The left tend to measure most things by talking about , and how anything that increases is bad. , being the gap between those on the lowest incomes and the highest incomes.

This of course means that most of the focus grows on how to divide up the cake, rather than grow the cake.

But even putting that to one side for a moment, I want to make the case for focusing on rather than merely inequality.

In many cases inequality is a normal and good thing. It is a good thing that a 50 year old with 30 years of experience gets paid more than a 16 year old with no experience.

It is also a good thing that someone who spends six years at medical school and four years of specialisation gets paid more than say a parliamentary researcher.

For the vast majority of New Zealanders, they start their working life earning a lot less then they finish it. And this is good – otherwise you extra skills and experience are not valued.

So I reject many measures of income equality as unsophisticated and even counter productive.

The measure that I would like more emphasis placed on is social mobility. I don’t have a problem with a 19 year old earning $10 an hour as a kitchen hand if when they are 30 they are earning say $25 an hour as a cook. However I will agree that someone who spends their life earning just $10/hour is going to have a relatively deprived life.

But for me the solution is not to raise the minimum wage to $25/hour, but to have a society and a labour market which will help people on $10/hour gain skills and experience so they move up the pay scale.

In the UK social mobility has historically been difficult with such a class ridden society. In New Zealand I think it is far less so. Few people really care about where you were born (unless it was Palmerston North) and what your parents did.

In a society with very low levels of social mobility, I can understand why reducing inequality is more important. But in a society which does have opportunities, I want the emphasis to go increasing social mobility, rather than merely the blunt instrument of inequality. If you take inequality to extreme measures, then you end up like the old USSR where cleaners and surgeons get paid much the same.

The data on social mobility in NZ is fairly sparse – partly because you have to measure it over extended periods of time. But that is where I would like more focus to go.

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