Saturday, July 04, 2020

How governments lie about the growing income gap

Jan 25. 2016
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Re: “Possibility of closing income gap is very slim”, Streetwise, January 19.
There never was a possibility of closing the wealth gap, which all governments lie about by using statistical confidence tricks like the Gini coefficient. The reality of the growing income gap is analogous to a stretching elastic band – the poorest stay in poverty, the rest of us get a bit more and the richest stretch their wealth annually by millions built on 30 per cent compound interest year on year.
Income inequality not only causes early deaths and bad health, but also inequality of opportunities.
UK Prime Minister David Cameron claims his government has narrowed the income gap to what it was 26 years ago. That claim was backed by the UK’s Office of National Statistics, using the Gini coefficient.
The political motive here is to protect the rich.
After doing my own analysis (, I contacted the UK Statistics Authority to point out that their measure ignores the poorest and the richest – those millions most affected by what is being measured. In their reply they admitted the shortcomings of Gini: “I agree with your observation that it is not ideal if your particular interest is in inequalities at the top or bottom of the spectrum.”
The sad fact, of course, is that incomes always diverge, and never converge to resolve inequality.
Unfortunately, either our news media are reluctant to call Cameron a liar or they cannot do simple maths.
Garry Anderson

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