A columnist in the New Zealand Herald on Monday last week argued, in response to this Policy Matters Blog, that health researchers are right to focus on inequality and relative poverty because the columnist’s widowed relative could not afford to send her 11-year old son to school camp.
However, the suggestion that it is inequality that precludes the widow’s son going to school camp is oxymoronic. She can’t afford to send him because she doesn’t have the money, which is a matter of absolute, not relative, income.
The focus on inequality and relative poverty implies that the widow would be no better off if everyone’s incomes were quadrupled.
Russ Roberts at Café Hayek has long argued that the proper way to examine income growth through time, when assessing inequality trends, is to trace the income growth of the same people through time. In his latest article here he links to some evidence on this point and concludes that “people are getting richer across the income distribution (though the picture for blacks is mixed) and the biggest gains go to the poor (true of both whites and blacks)”.
In the same article he suggests that the much higher divorce rates in the US experienced by those in the lowest income quartiles may help explain why those focusing on the growth in the median incomes of the lowest income quartiles may come to more pessimistic conclusions.
A 2004 Business Roundtable publication here by UK sociologist, Patricia Morgan Family Matters: Family Breakdown and its Consequences stressed the significance of the contribution of family policy changes – such as welfare policy, taxation and family law – to reduced family stability in New Zealand, although of course it is not the only factor.