Food For Thought#8: The Gini (Coefficient) Of The Lamp – Or, Are We A Country of Inequality?


There was an article in the Straits Times of April 10, which reported Professor Lim Yong Cha’s proposal that Singapore needed some shock treatment to wake up it’s economy.  His view was that the income gap in Singapore was approaching dangerous levels and there was an overdependence on cheap foreign labor.  Sound’s a bit familiar doesn’t it?  Applicable to a country that you might know perhaps?

His thesis basically was that low wages (<S$1,500 per month) be increased by some 50% over three years whilst high wages (S$15,000 p/m) would be frozen over the same period which caused a modicum of joy, panic, ‘it’s the end of the world’ and consternation in the populace (depending on where they sat).  He based his argument on a concept that I’d not heard of before called the “Gini Coefficient”, a globally used indicator of income inequality which in Singapore was 0.473 last year, up from 0.454 in 2001.  With the Gini coefficient, 0 equals complete equality and 1.0 complete inequality.  Apparently 0.5 is considered a dangerous point to reach.  See Wikipedia for further details http://en.wikipedia.org/wiki/Gini_coefficient.

So, in this land of the fair go, the ‘she’ll be right mate’ and with the complaints that ‘the cost of living is too high’ and ‘inequality stalks the land’ as well as the recent discussional angst about importing foreign workers, how do we stand with regard to this Gini Coefficient and how do we fare against comparable countries and our first world economy peers?  Effectively, are the Hanrahan’s of Australia, those moaners, groaners and whingers who, whatever the news, immediately adopt the default position of, ‘we’ll all be rooned’, well, right?

Well no, they’re not (see graphic above)!.  It’s pretty obvious that Oz is not doing too bad at all really in the Gini coefficients.  Just have a look where that empire of capitalism and free marketry the US of A sits.  Up there with Singapore in the area where financial inequality is seen as a significant issue.

Mind you, just because we are there with the ‘not doing too badly’ crowd doesn’t mean that a ‘could do better’ shouldn’t be slapped on the report card.  Surely we can do better than our European cousin frontrunners?

When you amalgamate this information with that of wealth, where we’re also up there with the best (see Food For Thought #7) then you have to really consider whether the  perpetual negativity and obdurate pessimism of the Hanrahans’ amongst us isn’t doing Australia a disservice. . . . . . . And that’s food for thought . . . . . .

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About deknarf

Australian born and bred who has spent most of his working life in R&D and IP management with earlier forays in the newspaper industry and martial arts. Fortunate enough to be living in one of the best countries in the World, even though I might get grumpy with it from time to time.
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