The OECD in a recent report analysed the economic growth of high-income countries including NZ from the years 1990 - 2010. It found that almost all of the 21 OECD countries missed out on economic growth due mainly to rising inequalities. The report concludes that this is because when income inequality rises, economic growth falls. A lack of access to high-quality and long-term education among poorer citizens in many OECD countries hurts the economy. The country that has missed out on the most growth according to this OECD report is, none other than our very own - New Zealand!! New Zealands economy could have grown by 44% between 1990 and 2010, but NZ only achieved 28% growth due to inequality. Hence, it lost 15.5% points -- more than any other country. This is particularly surprising, given that NZ was once considered a paradise of equality... NZ halved its top tax rate, cut benefits by up to a quarter of their value, and dramatically reduced the bargaining power - and therefore the share of national income - of ordinary workers. Thousands of people lost their jobs as manufacturing work went overseas, and there was no significant response with increased trade training or skills programs, a policy failure that is ongoing. Max Rashbrooke, author of Inequality also blames the lack of affordable homes which led to higher rents and unpaid mortgages. linkis/washingtonpost/jPWMy
Posted on: Mon, 05 Jan 2015 23:39:08 +0000
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