New Zealand’s Problem

Increased wealth but ↑health/social problems

•crime/violence/imprisonment

•drugs/alcohol

•mental disorders

•health/obesity/infant mortality

•education

•other………..

WHY?

Authors

• Wilkinson – economics (LSE)

- epidemiology (Nots, London,York)

• Pickett – physical anthropology (Cambridge)

- nutritional sciences (Cornell)

- epidemiology (Berkeley)

Source of Data

• World Bank

• WHO

• UN

• OECD

Selection of Countries

• Richest 50 countries (World Bank 2004)

• Flat portion of curve

• Exclude - no data

- <3 million

Dataset = 23 countries

Education Performance

Bigger GAP = worse performance

Finland - at the top

1. Free (illegal to charge fees), compulsory (7-16 yr), no selection of

students, no national testing, no league tables, no inspections

2. Teachers: “The most sought after profession”- Master’s

degree, prestige, competitive++“Teachers are academics and well trained, so we trust them”

(Prof Lavonen)

3. Narrow income gap (Little social mobility)

[Free tertiary education]

Statistical AssociationsCause & Effect?

• Correlations between countries & States

• Robust correlations

• Changes with time in parallel - USSR to Russia

- Japan vs USA post WWII

- Post-Berlin Wall

Explanations

“Stress”• Social status• Trust (lack of..)

• Anger & frustration• Physiology-to-pathophysiology• Impaired broad view - society, foreign aid

Imperfect Understanding

The GAP in New Zealand

“It is no coincidence that the biggest increases in income inequalities have

occurred in economies such as those of America, Britain and New Zealand, where free-market economic policies have been

pursued most zealously”

The Economist 1994

The GAP in New Zealand

“Income disparities are widening and they will widen much more. That doesn’t worry

me”

Minister of Finance 1995

The GAP in New Zealand 2009-2010

INCOME

Chief Executives – 14% rise

All New Zealanders – 1.7% rise

Business Herald 2010

Considerations for the Rich

1. Reducing the GAP benefits the rich

(as well as the poor)

2. Can the GAP expand further?

“As we watch the fervor across the Arab world – where a fraction of the population controls the lion’s share of wealth – we must ask: when will it come to America”

Joseph E Stiglitz (2011)

ACTION: Reduce the income GAP

Hypothesis: Reducing the GAP will:• Improve health indices• Reduce infant mortality• Reduce crime & imprisonment rates• Reduce obesity• Reduce mental illness• Reduce teenage pregnancies• Improve education performance• Improve wellbeing….etc etc• Save $$$ long-term

How to Reduce the GAP

• Tax/Welfare – Scandinavian model

• Decrease Income GAP – Japan model

• Oversight of ministries etc (remove blinkers)

• Close tax havens ($$ trillions)

(Treasure Islands Nick Shaxson)

Public / Political will

The Fight Against Organised Misery

But stand up,

you, stand up,

but stand up with me

and let us go off together

to fight face to face

against the devil’s webs,

against the system that distributes hunger,

against organised misery

The Captain’s VersesPablo Neruda 1972

Where to from here?

NEW ZEALAND

www.closingthegap.org.nz

www.closertogether.org.nz

UKwww.equalitytrust.org.uk