Earlier this week Oxfam released figures arguing that “the richest 1 per cent of Kiwis bagged a staggering 28 per cent of all wealth created last year while the poorest 30 per cent of the population got just 1 per cent”. Note that this is talking about the increase in wealth in one year, and how it was distributed, not the total wealth that’s built up over many years and decades.
Is this right? The data source is the Credit Suisse annual wealth databook, which itself seems to work by taking the Reserve Bank’s figures for total NZ household wealth (known as Household Balance Sheet figures). That’s a good source, but it’s not quite clear how Credit Suisse gets from that overall figure to the percentage shares. Its source for the distribution of wealth, the Household Savings Survey, was a one-off survey in 2001. If you just applied the shares from that survey to the Reserve Bank data, not only would it be inaccurate but the shares would be the same every year. Since the wealthiest 1% have around 22% of wealth, they’d get 22% of the increase.
So Credit Suisse must be using something else – possibly income inequality figures, which are updated every year, and from which one can deduce (they argue) a wealth inequality distribution.
I’m not sure about that method, assuming that that’s what they’re doing. On the other hand the figures seem plausible. The sharemarket’s doing OK, people who own large houses are seeing them soar in value (as are lots of other people, of course), so the wealthiest 1% increasing their share is not impossible. Might be worth finding out a bit more about how these figures are calculated, though.