New Zealand is likely to face increased concentrations of wealth, inequality and power in the twenty-first century, according to newly assembled data.

Economist Geoff Bertram, in a lecture to the Institute for Governance and Policy Studies, where he is a senior associate, said data he had assembled showed New Zealand fitted the pattern of other countries set out in Thomas Piketty’s groundbreaking work Capital in the Twenty-First Century.

Noting that concentrated wealth and power among elites was the norm for non-capitalist societies, Bertram said Piketty’s work asked the question, ‘Are capitalist societies different?’. Piketty’s answer was an “essentially pessimistic” one, predicting the emergence and entrenchment of a wealthy capitalist elite across the major developed countries, though he did not present data for New Zealand.

Some wealth holders might originally have been entrepreneurs, but as their wealth accumulated, they rapidly became “rentiers”, earning profits simply by virtue of owning assets.

Piketty also showed that the level of wealth in a society, measured as a multiple of the income generated by that society in a given year, was determined by the economy’s savings rate divided by its growth rate.

This implied that the share of national income going to the wealthy was not determined by its “productive contribution” but was essentially fixed as a result of other variables.

Neo-classical economists had justified returns on assets by arguing that wealth contributed to productivity and economic growth, but Piketty’s data showed that wealth levels fluctuated hugely during the 20th century without any apparent connection to growth rates. “The entire body of neo-classical growth theory has simply been parked out of the way,” Bertram said.

Piketty’s key insight was that standard savings and growth rates would tend to drive the level of wealth towards an equilibrium with a “very high” level of inequality. If the savings rate could be assumed to be 12% a year, and growth 2%, the level of wealth would stabilise at six times a country’s annual income – a figure similar to that seen in nineteenth-century Europe.

One key driver of this widening inequality was the fact that the rate of return on wealth was – with the exception of the mid-twentieth century – generally much higher than the growth of wages and salaries.

Neo-classical economists had argued that this effect would taper off, because as more wealth was amassed, the abundance of it would drive down its returns. However, this was not true if, as Piketty argued, accumulated wealth could displace labour “out of productive employment”, taking “a larger and larger piece of the action”.

And because so much wealth was held by “a subset of the population”, this would in turn drive widening income inequalities.

In New Zealand, income inequality had been relatively stable in the last decade, but this masked growing wealth inequality of the kind Piketty had identified, Bertram said.

A very large rise in income inequality from the mid-1980s to the early 2000s had translated into a concentration of wealth at the top, and Statistics New Zealand research showed poor households borrowing large amounts while wealthier households saved, exacerbating existing inequalities.

Data assembled by Bertram showed New Zealand’s stock of wealth following a similar pattern to the countries in Piketty’s work. In particular, it had risen sharply in the 2000s, as households had taken “a decade or so” after the sudden rise in income inequality to watch their balance sheets either improve or decline.

New Zealand’s wealth concentration was converging to the same level as those of the major world economies covered by Piketty, Bertram said. This was not surprising given that New Zealand’s economy was “as open as you can get” to foreign wealth, individuals and ideas. Also, the factors determining wealth inequality – such as the savings and growth rates – tended to become equalised in a globalised world.

This implied that local policymakers who had contributed to New Zealand’s increased inequality – including politicians such as Roger Douglas and Ruth Richardson – were merely “riding the wave” of growing world inequality. “[Local] institutions and policies matter, but they are countervailing forces, not the prime drivers.”

Wellington City Council looks set to become the country’s first Living Wage council following last night’s election.

Last year it voted in principle to support the idea, and put aside $250,000 for it. Now, on the new fifteen-strong council (including the mayor), nine are in support.

Six councillors who voted for the Living Wage in June were re-elected: Celia Wade-Brown, Ray Ahipene-Mercer, Paul Eagle, Justin Lester, Helene Ritchie and Iona Pannett.

Of the six new councillors, Sarah Free and David Lee are both Greens, and Mark Peck is Labour, and are understood to support the Living Wage.

Also elected were three existing councillors who voted against the Living Wage – Jo Coughlan, Andy Foster and Simon Marsh – and three new councillors who either oppose the Living Wage or whose position isn’t known: Nicola Young, Simon Woolf and Malcolm Sparrow.

Great news: Wellington City councillors have voted unanimously for a report on the Living Wage to be prepared, as follows:

“to inform the annual plan deliberations on a proposed Council commitment to support a Living Wage. The report should advise on the following key points:

·       Whether Wellington city council should support the principle of a Living Wage for Wellington

·       The costs and benefits of Council moving to a living Wage for all directly employed and contracted staff, and possible options for a staged implementation plan

·       The most appropriate roles for Council to play to support an encourage Wellington businesses citywide to become Living Wage employers.”

It seems like a majority of councillors back not just the report but also the bigger step of actually implementing the Living Wage, so fingers crossed…

For well over a year now, I’ve been asking the Department of Corrections to give me its two full business cases for building the new public private partnership (PPP) prison at Wiri in South Auckland. And for well over a year, it’s been refusing. So the question is, why’s it holding things back?

The reason I want to see the business cases it that they set out the key numbers around the prison. In particular, they compare the cost of building the prison under a PPP (in which a private company designs, finances, builds and operates the prison for around 30 years) as against the normal way.

What often happens with PPPs is that they get delivered to the price that the government agreed … but only after the private company concerned has managed to get the price lifted during or before negotiations.

PPPs are also more expensive because it costs private companies more money to borrow than it does the government, so they have to make that up with “efficiencies” elsewhere – which can be genuine or they can involve cutting corners.

So I want to know how much Corrections thought the prisons would cost at the outset. Corrections will give me the business cases – but only with all the numbers blacked out!

I’ve complained to the Ombudsman, but in the meantime, it’s interesting to ponder what might be in those blacked-out sections.

My suspicion is that they will, as above, put the numbers on just how much more expensive the PPP will be upfront – and that the department’s initial estimate of how much the prison will cost will prove to be much lower than its final cost.

The department says the figures are commercially confidential, but that makes little sense. In these business cases, it is just producing an artificial, simulation-based model of how much something would cost. No real company has been anywhere near these figures, or put in a quote, or anything like that. So there’s no commercial confidentiality to protect.

People sometimes say that this kind of deal increases transparency for the taxpayer. Well, not so much.

The idea that most of the world’s failings are down to irresponsible poor people is a familiar one, but rarely has it been dealt with better than here.

On a Stuff story about people failing to recycle, a commenter has somehow managed to wedge in their own angry views about feckless poor people, to wit: “Yep, its all the poor and lazy people, who don’t know how to recycle. These people shoud be heavily finned for putting rubbish in the bags or the bins.”

To which the response was, by another commenter: “Man, I’m poor and often lazy but I would LOVE to be heavily finned. I would get SO MUCH swimming done.”

Genius, no?

A couple of recent reports have shown that even New Zealand’s pensioners – who do relatively well financially, compared to other age groups – are increasingly threatened by the spectre of inequality.

The first, by Kay Saville-Smith of the Centre for Research, Evaluation and Social Assessment, argues that many young people will not be able to afford to buy a house in their working lifetimes.

As a result, they will face “privation” in retirement as they have to pay market rentals on a state pension, which while adequate – it works out at around $18,000 for a single person – is hardly generous.

Of course, this doesn’t affect those better off workers – the top 10% – who will keep on being able to buy houses.

Another report, for the Commission for Financial Literacy, argues that inequality among pensioners is set to rise. One of its authors, David Preston, told a recent conference: “What you have is a peculiar situation where the two extremes of the retired population are both growing rapidly.”

While people who had been in well paid employment would enter retirement with Kiwisaver nest eggs and their own homes, those who had not – especially beneficiaries – would be moving into retirement “in a poor financial state”.

What all this points to is that even New Zealand’s better achievements, such as the way we keep most pensioners out of poverty through a universal benefit, have relied on invisible support: notably, home ownership.

The fact that most people own their own homes is what has allowed them to have a decent standard of living in retirement. Now that easy access to home ownership has been taken away, that reliance has been exposed.

Once again, inequality in housing is shaping up as a critical factor in how we live in New Zealand – and the case for concerted house building is becoming ever stronger.

The Herald has an opinion piece from Auckland Council’s chief economist, Geoff Cooper, about inequality and why education offers the best route to tackling it.

Now, it’s great to see an economist, and one working for an increasingly influential body, talking about income gaps.

But, just like the Treasury, he’s arguing for a very limited – and, I think, flawed – view of what inequality is and how it can be reduced.

He rightly identifies that higher skills are needed to get people into better jobs and help the economy hum along smoothly. In the upcoming book that I’ve edited, Inequality: a New Zealand Crisis, we have two chapters on education and improving skills training.

But Cooper and others tend to stop there. Only things like education, they argue, can reduce inequality while imposing no overall cost on the economy; other measures are too redistributive, too costly, too old-school.

But I think they’re wrong in a number of crucial ways.

First, education doesn’t explain that much about inequality. It’s very often a story of the top 1% pulling away from the rest, and the top 1% aren’t that much better educated than anyone else. In any case, New Zealand has had the western world’s largest increase in inequality, but our ‘degree premium’ – the extra income you get for being educated – is one of the lowest, so that can’t be the explanation.

Second, increasing educational levels does nothing for people in low-skilled jobs who work incredibly hard but don’t earn enough to get by. Cleaners, for instance, will be left to struggle on $14.10 an hour, regardless of investment in skills, so an emphasis on education alone is an argument for leaving those people in desperate circumstances.

Third, and most important, Cooper and others are wrong to think that other pro-equality measures will harm the economy. Ideas like wage-led growth makes the obvious point that if you pay people better, as long as other structures are set up properly, then people work harder – because they feel more valued – and so you generate more income.

There is no good evidence linking higher pay for the general workforce with lower economic growth.

So, arguments like Cooper’s are a good start – but far from enough.

A government that relies too much on anecdote, doesn’t have enough specialists in top positions and isn’t properly held to account.

That was the disagnosis from Len Cook, who used to be head of statistics for both the New Zealand and the UK governments, and who gave a very entertaining – but also worrying – talk last night on how our government runs.

Speaking at an IPANZ and IGPS seminar, his argument was that several problems are seriously hampering New Zealand’s ability to foot it in the twenty-first century.

The first is that our government isn’t currently dealing with a world that is becoming much, much more complex – we’re still trying to make decisions on the back of an anecdotal, ‘she’ll be right’ approach that might have been fine 50 years ago, but isn’t now.

“This country has made so much policy on the basis of anecdote and a lack of evidence. It isn’t clear that our future can be so dependent on serendipity and received wisdom.”

In particular, we don’t go back and look at what went wrong, Cook argued. “The absence of a commitment to evaluate [the success or failure of policies] in New Zealand government is extraordinary.”

New Zealanders were “amazed” by how much evaluation the British government did, he said. “We do very, very little … We need a proper review of things that go wrong as part of our culture.”

New Zealand was also behind in terms of how much it spent finding out about how its ‘non-traditional’ trading partners – such as China – functioned. While New Zealanders were very comfortable in, say, the UK, they didn’t put much effort into understanding countries less similar to theirs.

The second big problem is in the way government departments are run. Senior public sector workers now have to do so much managerial work, Cook said, that the amount of time spent on making sure that good-quality advice is being provided is correspondingly reduced.

The government also recruits too many “generalists” to run departments, so that “you have to go down three levels [in a department] before you find someone who knows what they are talking about”.

Senior public leaders were also failing to develop the next generation of leaders in the way they had done in the days of greater cooperation and the “college of cardinals” approach among chief executives.

The third big problem is that the government isn’t properly accountable for its actions, Cook said.

Ministers often haven’t been required to actually answer questions – except more recently under Lockwood Smith as Speaker – and select committees don’t have the “grunt” and the power they do in the UK.

In short, for the last century, Cook said, New Zealand had traded in well-known markets with long-established partners, and had been able to get by on ideology and beliefs – but no longer. “We have to develop a more enquiring capacity to analyse what’s happening.”

After his speech, people in the audience backed up some of these concerns, and expressed others. One public sector worker, in particular, talked about how the quality of policy advice was being compromised by “the desire to please ministers”, and cuts to budgets that took place “to the detriment of good advice”.

Because policy analysis was increasingly being “retrofitted” around what the minister had decided, often in the absence of good evidence, ministries now produced “policy-based evidence” rather than “evidence-based policy”, the public sector worker said.

The wit and wisdom of Len Cook

On cross-party liaisons being forbidden: “In recent years, it’s become important to sleep in sheets of the same colour, whether you’re at home or not.”

On ministerial competence: “We have a great political system, but it’s like giving the keys to the car to teenagers on Saturday night – and they do wheelies with it.”

On government being so fragmented by the 1980s and 90s structural changes: ministerial responsibilities are “a random scattering, a bit like pick-up sticks”.

On Sky City: “20 years ago, I fired a mid-ranking public official who spoke to one of the parties [in a tender] and gave them information he shouldn’t have. Did I make the wrong decision?”

On inquiries: New Zealanders look for “a safe pair of hands” to run a review, whereas the British want to be “done over by the best bastard”.

In one of life’s great ironies, it’s just come to my attention that Talent 2, the company behind Novopay, was the sponsor last year of an award for ‘public sector communications’.

The award itself was well-deserved: it went to the Department of Corrections for making prisons smokefree and the way they got staff and inmates on board. But how ironic that Novopay, which has barely fronted to the media – quite on top of producing a disastrous bit of software – should be sponsoring the award.

As the Institute of Public Administration awards website puts it: “The Talent 2 Award for Excellence in Public Sector Communications recognises the design and delivery of innovative public sector communications strategies that have significantly increased public awareness of a government objective. This may be a public information campaign, a public engagement strategy, or the communication of a specific initiative, change of policy, legislation or regulation, and may be in a variety of mediums.”

Well, Talent 2 have certainly increased public awareness of the importance of getting teachers paid in time, if not in the way the award envisaged.

In one of last year’s editions of the journal Public Sector, Talent 2’s general manager, Peter de Boer, says, “We look forward to some equally exciting nominations next year.”

Maybe they could nominate themselves?

A rather disturbing report on Wellington’s health services shows that central government policies have led directly to people already in poor health getting even lower priority.

‘From Great to Good’, by professor Don Matheson, explains how – under pressure from central government targets – the Capital Coast District Health Board (C&CDHB) has increased spending on hospitals relative to GP and other basic health services.

The report, based on official information act requests, says that the health system already gives less to those at the bottom (despite what the public might think), even though they need more support.

Treasury figures show that an upper middle class household receives on average almost $11,000 of health services a year, whereas the households with the lowest income receive on average $6,000 of health services – despite their greater need.

The latest New Zealand Health Survey shows that one million New Zealanders had “unmet need” for primary health care in the last year – and this is worst among Maori, Pacific and low income groups.

Our health system is less equitable – that is, it does little to help those most in need – compared with those of Australia, Canada, Germany, the Netherlands and the United Kingdom. Only the USA has a more unfair health system.

The sad thing is that before 2008, Wellington’s health board was making progress in narrowing these health inequalities and helping those on the bottom. But since then, the report finds, the board has become focussed on meeting centrally imposed hospital targets.

While getting more operations done is important, it shouldn’t have come at the expense of funding frontline GP, maternity and other services – which have been cut by hundreds of thousands of dollars, and which most affect low-income households.

As the report puts it: “C&CDHB’s direction … decreased in scope and became increasingly focused on the Minister of Health’s targets.

“This narrowing of focus crowded out the previous focus the Board had on equity for the population that it serves. While previously it had led performance in addressing equity, it is now actively disinvesting in the providers that helped secure that leadership position … while at the same time push[ing] costs onto patients who could least afford to pay.”

Another day, another study showing how an unfair tax system is helping widen the gap between the rich and the rest. It’s a US study this time, which finds that the biggest reason for widening wealth gaps 1991-2006 is the capital gains and dividends going to the top 1%.

These kind of windfalls are taxed at only 20% or so, whereas Americans who get their income from salaries can be paying 39%. It’s strikingly unfair, and has been for a long time.

Of course in New Zealand, as a rule you don’t pay tax on capital gains at all, so our system is even more extraordinarily unfair. It also means that whatever figures we have for wealth gains by the top 1% will be massively understated, since we don’t collect data on their capital gains.

The study’s also interesting as it’s another rebuttal to the idea that widening income gaps are caused by things beyond our control: impersonal, global forces like free trade, or the way that technology makes some jobs redundant and others more valuable, or the increasing premium for education.

This study builds on a lot of recent work showing that that’s not so. Take the education story – the idea that inequality widens because people with degrees earn more. It’s a seductive theory, because fixing it sounds so easy, relatively speaking. Just get more people to get degrees: job done.

But if in fact the main problem – as it clearly is in the US, at least – is the profits going to the top 1%, education is not the problem (or the answer). The top 1% are not better educated than the rest of the top third, say, of your average country. This is not about ‘returns to education’, as people like to call it.

Instead, it’s about really difficult but political – not impersonal – choices, about how the tax system treats different classes of people differently. And that’s what needs to be solved.

The Treasury has just released a paper outlining its thoughts on inequality (as part of its wider work on Living Standards). Now, it’s great to see the Treasury acknowledging that it matters how income is distributed – not just how much of it we generate. Unfortunately, it hasn’t quite faced up to the full reality of the problem, which leaves its account very weak, and in places incoherent.

The Treasury says its starting point is “the ability to participate in society”, which is a fabulous place to begin. The whole point about inequality is not just that people need to be lifted above an absolute level; inequality means they are left out of things that other people have, unable to join in with the rest of society, in way that is determined by how much other people have.

Unfortunately, the Treasury doesn’t seem to realise what that really means, because its proposals are then focussed almost entirely around improving social mobility. Now, social mobility is important: people need opportunities to earn more, or to live better than their parents did. But it isn’t enough by itself.

Even if people can move freely up and down the ladder, there is obviously still a ‘down’ – and being in that ‘down’ spot is miserable. To put it differently: even with mobility, there will always be people who are very poor and don’t earn enough to participate in society – even if they are doing useful work. Tamara Baddeley, a woman whose story will be told in the Inequality book, cares for the elderly, is paid $14.81 an hour – and can’t afford to go to the movies. To talk about ‘opportunity’ and mobility’ is meaningless here.

What is needed is direct action to tackle inequality now: action to raise her salary, so that she can participate fully. The Treasury’s view, which seems to be that it doesn’t matter if people are desperately and unfairly poor, as long as it’s not for long, is woefully inadequate – not least because, by its own measure, people need more income – right here, right now, whatever they are doing – if they are going to be able to participate in society (like being able to go to the movies).

In addition, the Treasury seems to have missed the obvious point that if you want to increase social mobility and offer equal opportunities to all, you need greater equality of incomes. To state the obvious, if some people have far more wealth than others, their children will get a much better start in life. In addition, some whole communities become cut off from opportunity because, when poverty is concentrated, there are few jobs going, their communities aren’t adequately invested in, and they become characterised by hopelessness and despair.

The international evidence is that, across countries, more equal societies have better mobility (far more people make it out of poverty in Denmark than they do in the US), and that, across time, as inequality increases, mobility decreases. The US shows this: as gaps have widened, people’s ability to escape poverty has fallen.  Again, the Treasury’s paper fails to take into account this basic point.

Another problem with the paper is that it gives an extremely biased account of why inequality has risen in New Zealand, discussing technological change and different household patterns, but not mentioning little things like lower taxes on the very wealthy and reduced benefits for the poorest. Nor does it mention the decline in union membership, which some overseas research suggests is responsible for up to one-third of rising inequality. The failure to even mention this factor is just staggering.

Still, it’s good to see the Treasury engaging with the issue. As with The Economist’s (similarly partial) special feature on inequality last year, the fact that the issue can’t be ignored now is a huge positive in itself.

The recent fate of UK leaders in New Zealand highlights the difficulty of parachuting in managers from one country to another.

Every country has different rules for its public services – which is why UK civil servants aren’t always a hit overseas.

“An unexpected journey” is the subtitle of the first Hobbit film, New Zealand’s latest contribution to world cinema. It’s also been the fate of Lesley Longstone, the senior British civil servant who was recruited to head up New Zealand’s Ministry of Education, and who is now returning home just over a year into a five-year contract.

Longstone’s abrupt departure follows that of Janet Grossman, who returned to the UK last year after only nine months as the head of Work and Income New Zealand, a frontline benefits and work support agency.

It is often assumed that public managers can move seamlessly from one country to another, especially if they possess a shared cultural heritage and similar political systems. But these two recent departures rather give the lie to that idea – in particular Longstone’s experience, which was marked by a series of disasters.

An attempt to increase class sizes, in order to redirect money into teacher training, resulted in a humiliating backdown after parents and teachers revolted. A move to merge schools in post-earthquake Christchurch was just as badly handled, with parts of it struck down by the courts. To cap it all off, a new private sector system for paying teachers, called Novopay, has been a near-total failure – so much so that it is known in some quarters as Novopain.

Not all of this is Longstone’s fault, of course. New Zealand’s education minister, Hekia Parata, new to the job, is widely regarded as being out of her depth, and was described by the main teachers’ union as “aloof and autocratic”. It is no surprise that the two women had the “strained” relationship that was cited as the main reason for Longstone’s departure.

In the words of Brenda Pilott, the head of New Zealand’s Public Service Association union, Longstone became “the fall guy for an inept minister”.

But several factors counted against the British import. First, despite having held senior positions in Britain, Longstone apparently had no actual experience of running a department or the all-important matter of managing a direct relationship with a minister. In particular, she may not have appreciated how difficult it would be to work for Parata.

Moreover, she had no personal knowledge of the way the New Zealand public sector works – which is, in some key ways, quite different from its British equivalent. Civil servants at all levels in New Zealand have a much closer relationship with their minister than is the case in most countries. Its chief executives, in particular, are more obviously accountable for their performance, through private sector-style contracts and set objectives.

In Longstone’s case, that accountability translated, rightly or wrongly, into having to front up to the media to defend key decisions, after Parata failed to show – something that UK permanent secretaries, for example, would rarely, if ever, have to do.

The reasons for Grossman’s departure are less clear, and may have been partly personal. But it cannot have helped that her minister, Paula Bennett, suddenly appointed a board of outside “experts” to oversee Work and Income’s operations. Internal power struggles between Work and Income and its parent body, the Ministry of Social Development, are also rumoured to have played a part.

For neither Longstone nor Grossman would any of these internal issues have been clear from afar. These issues might, however, have been picked up by people who knew the terrain better – including those who have made the cross-country transition more cautiously.

After all, many of New Zealand’s public sector leaders are originally from the UK. But the successful ones have usually gone out there for the long term and worked their way up through the hierarchy, rather than being parachuted in.

As Pilott put it, the New Zealand government “needs to think long and hard about making overseas appointments, and consider the unique complexities, demands and pressures of the New Zealand context”. Nonetheless, the trend continues: Kevin Lavery, the chief executive of Britain’s Cornwall county council, has just been appointed to run the city council in New Zealand’s capital, Wellington.

Lavery, whose time at Cornwall has been controversial, may of course prove to be a good appointment, especially if he has done his homework. But if not, recent history suggests that he may end up, in the words of the Hobbit’s original subtitle, going “there and back again”.

First published in The Guardian

This week’s Listener carries an account of three weeks I spent in a cold, dirty boarding house in Wellington, researching the lives of people who have ended up at the bottom of the inequality spectrum, and how they are treated.

It was an eye-opening experience, and I urge everyone to read the piece, out tomorrow (Friday 5 October).

It’s also an experience I will never forget, thanks in part to the rug in the photograph below. It was a present to me by one of the other residents in the boarding house, given in an attempt to make my room look more cheerful. He gave it even though he had very little himself, and at the same time as the boarding house’s landlord was cheerfully maintaining me in a damp, foul-smelling room.

When I left the boarding house, its original owner wouldn’t take it back, despite repeated offers, so I brought it back to my flat and, after giving it a good clean, have installed it as pride of place in our living room.

And so it sits there, serving as a permanent reminder of the generosity of those who have very little, and of the relative comfort in which the rest of us live.

(NB: Attentive readers may have realised that someone living in a boarding house is not ‘homeless’, as the term is normally understood. But I am using the Statistics New Zealand official definition of homelessness, which includes anyone living in temporary accommodation, including boarding houses.)

Our first talk on inequality at Te Papa, on September 13, was a huge success: a great crowd of well over 200 people, and a fantastic array of speakers setting out all the reasons – personal, social, and economic – why we should worry about the widening divide.

Now, we’re gearing up for the second talk, on October 4, this time looking at solutions. The event blurb is below. All welcome!

Forums for the Future: Between Rich and Poor – the Solutions / October 4, 2012  Soundings Theatre, Te Papa, 6.30-8pm

The widening gap between rich and poor is damaging our families, our economy and our shared social fabric, and threatens our traditional values of fairness and egalitarianism. But we can do something about it. At this event, four leading speakers will discuss the way that education, a stronger economy, fairer workplaces, and a more supportive welfare system could help close the gap between rich and poor.

Speakers:

• Cathy Wylie, chief researcher at the New Zealand Council for Educational Research – on education and its role in reducing inequalities

• Ganesh Nana, chief economist, BERL – on tackling inequality and creating a stronger economy

• Prof Nigel Haworth, Auckland University – on people, work and fair rewards

• Associate Prof Mike O’Brien, former head of the Alternative Welfare Working Group – on tax, benefits and redistribution

The Living Wage campaign launch in Wellington a few weeks ago was a powerful lesson in the way that equal opportunities and equal incomes are inextricably linked.

The highlight of the launch was a speech from Sosefina Masoe, a cleaner. Sosofina, who featured in this Dominion Post story, told how she and her husband are struggling to get by on near-minimum wages: $13.85 an hour for “hard, dirty” work cleaning the Police College.

She and her husband are looking after four grandchildren so that the children’s parents can study “to get ahead in life”. But they don’t earn enough to feed those grandchildren properly, or, sometimes, even keep the fridge running. Bills are mounting up every day.

What’s especially powerful about the Sosefina’s story is that, even if some respondents to the Dominion Post story questioned whether there should be so many children in the family, and asked how much money was sent back to Samoa, in all other respects the Masoes are following the American – or even Kiwi – Dream template.

They are working incredibly hard – including 12-hour stints on Sundays – and have very few if any luxuries. “We never go for a movie – or a holiday,” Sosefina said at the campaign launch.

Above all, they are intensely ambitious for their children. Sosefina and her husband recognise that they themselves are unlikely to change jobs, because they can’t afford to take the time out from working to study: “My husband and I talk about how we could do something different, but we are stuck in cleaning jobs on low pay.”

But they are giving up their own happiness so that their children can get better jobs. “I care for my four grandchildren because I told their parents to study [in order] to make a better life.”

If they earned a living wage, that money would, Sosefina said, go into paying for their children’s education, or to basics, like better food so that their children and grandchildren won’t get sick.

The point here is that the Masoes believe firmly in equality of opportunity, in trying to get ahead, in moving up the ladder – but those very opportunities are being severely impeded, to say the least, by an inequality of outcome, in this case, low pay.

When people are earning less than enough to live well on, they can’t take advantage of the opportunities that theoretically exist – not without an extraordinary, and probably damaging, sacrifice.

So even if the only thing that you care about is creating more opportunities, you can’t ignore the need for better, and fairer, pay.

The latest Roy Morgan poll, released on Friday, shows National’s lead continuing to fall and economic concerns dominating all others.

But deeper down in the figures is something far more interesting, and in a way surprising: the gap between rich and poor is worrying more and more New Zealanders, and now bothers twice as many people as it did a year ago.

Roy Morgan’s figures show that around 18 months ago, in November 2010, just 3% of the population said that “poverty, the gap between rich and poor, and/or imbalance of wealth” was the most important issue we face as a country.

By April this year, that figure had hit 10%; it’s now at 8%. So despite a slight fall-off, or poll wobble, twice as many people now have inequality in the front of their minds.

That’s surprising in a sense, because after a barrage of columns, debates and newspaper articles on inequality last year, media attention seemed to me to have diminished this year, as the continuing world crisis focused minds on more basic issues, such as where on earth economic growth is coming to come from now.

But of course coverage doesn’t always reflect reality. And the figures may show a growing realisation that people on low and average incomes are just still struggling, with little hope in sight, while others seem insulated from the economic malaise.

The last round of tax cuts, after all, gave someone on $150,000 an extra $135 a week, but just an extra $35 a week to someone on an average wage. So those tax cuts, which are now just starting to be felt, have increased the gap between rich and poor by $100 a week.

People may have registered, too, that CEOs are still doing extremely well (albeit their pay increases have stalled), without always an obvious justification. Telecom’s Paul Reynolds is getting a $1.75 million severance package, for example.

They may also have twigged that asset sales, whatever your view of their general merits, stand a good chance of transferring collective wealth into a relatively small number of hands, given that most people will struggle to spare the cash needed to buy them.

The key annual report on inequality, Household Incomes in New Zealand, is slated to appear in August. If that shows a widening gap between rich and poor (after last year’s slight narrowing thanks to poor stockmarket returns for the rich), we can expect the chorus of concern to grow even louder.