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Interesting Links for 28-02-2012

Original post on Dreamwidth - there are comment count unavailable comments there.

Ah... but the way the GINI is calculated, you can have a lot of people living in tent cities if the top end is not relatively that wealthy.

However, the figure given there does not match the one in the reference quoted -- I've queried it on the article talk page.

Found an income one:

Which puts us as slightly worse than the EU average, but nowhere near as bad as we are for wealth.

Massive wealth inequality is, of course, a good reason for mansion taxes and inheritance tax.

Wikipedia has a convincing one for our evolution of the income GINI in time for several countries including UK.

We're no Brazil but we're far from perfect and getting worse not better.

Which is hardly news - managing to get less equal under a Labour government should be staggering, but sadly isn't.

The more I read about this the more complex it is. Some places report income GINI across all adults, some places report income GINI per household and some places report wealth GINI. It's actually hard to know which is the best measure. If a man goes to work and earns well and comes back home sharing his wealth with his stay at home wife (or vice versa) and it is their free choice... is that an inequal situation. A society where every household was an identikit pair of people earning the same but with only one worker would have a perfect gini per family but a perfectly awful gini per adult.

Many places report different years in the same table to make things even worse.

Absolutely. Inequality isn't an absolutely bad thing - if we allowed more poor people to move to the UK then that would raise our inequality, but it would be a good thing for the people moving here.

Similarly, having non-doms in the UK pulls in cash from their spending that we otherwise wouldn't have. But it raises inequality dramatically.

Well... I'd more put it "inequality is a hard thing to measure well". If we allowed more poor people to move to the UK and kept them poor rather than allowing them to share the quality of life then that would definitely be a negative in my book. (E.g. the US/Mexico approach "sure, come over covertly, work illegally for a pittance" -- not such a good way.)

Similarly, if you allow "non doms" but do not tax them in a redistributive way such that their contribution actually makes poor people wealthier then why do it?

Let's say you let in someone with £10billion, and make £1million from him that you give to poor people. That's still raised the inequality.

Similarly, it may take at least a generation for poor people with no skills and education to raise up to the media levels of income, and until that point their mere existence is increasing inequality, while still improving their life, and quite possibly the lives of those around them.

Well, we can construct artificial examples like that I guess. E.g. We kill the 100 poorest people in the country (or allow them to quietly starve) increasing the mean wealth (and decreasing inequality) or we import 100 wealthy misers who never spend anything or pay tax increasing the mean wealth.

So, "inequality is not necessarily a bad thing" in the same way that "increasing mean wealth is not necessarily a good thing".

I don't consider either of those to be artificial examples. The non-doms one is exactly that, and that's exactly what happens when poor immigrants enter the country.

It would be the situation if you let rich non doms into the country with no plan to try to redistribute wealth from them and you let poor immigrants into the country with no plan to redestribute wealth to them and if that decision was taken at a single moment in time. However, politics in reality does not work like that, it is an ongoing process... there's not usually a defined "start point" where "poor people enter country from date X" and even when there is, this will continue to happen so a government always has a choice to allow such policies in a way which will redistribute wealth more equitably or not.

So, while you can say "let poor people in or do not" is a valid and realistic political decision, in reality, what happens is that this is an ongoing process over many decades which can either be coupled with redistributive policies to even out the wealth imbalance or can be done in the absence of such. Unfortunately, successive governments have taken the latter route.

It doesn't matter if you redistribute the wealth away from the non-doms - unless you redistribute it away such that they are on the median income you are increasing inequality. And as this would mean that they didn't come in the first place, nobody is proposing doing this.

And, as I said earlier, the immigrants do reach median (or higher) levels - but it takes a generation or so. And so people from a couple of generations back are now "normal", so the latest lot take their place (and get complained about by the previous immigrants, so far as I can tell).

It doesn't matter if you redistribute the wealth away from the non-doms - unless you redistribute it away such that they are on the median income you are increasing inequality.

Only if you take a very crude measure (actually I have no idea which measure you have in mind that has this property) -- if you take the GINI coefficient this need not be the case, indeed it need not be nearly be the case and sometimes only a small degree of redistribution will be necessary.

Here's an examples -- pretty much first example I tried:
Initial population, income = 1.0,1.0,1.0,1.0,10.0 -- GINI = 0.514
New arrival (our hypothetical non-dom) has income 12 -- population would be
1.0,1.0,1.0,1.0,10.0,12.0 -- GINI = 0.525 (marginally worse)
Redistributive tax of only 2.0 given to poorest
Redistributed wealth
1.5,1.5,1.5,1.5,10.0,10.0 -- GINI = 0.43 (considerably improved)

Unless I made a cock up with my quick and dirty GINI calculator that is. That's not much of a redistribution really either. Of course not massively realistic but the point is you don't have to tax/redistribute much to create an improvement. Certainly not to get someone down to the median or the mean.

the immigrants do reach median (or higher) levels - but it takes a generation or so

Not in the UK where, as I mentioned earlier, social mobility is poor and getting worse. Report here is eye opening.

Or to give another example - if you have the choice between one social system that increases everyone's income by 1% equally, or another that increases the income of the poorest by 2% and the richest by 5%, which do you choose?

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