Inequality gap closes, but Portugal still very unequal

The gap between rich and poor shrank, but Portugal is still among the most unequal countries and has the greatest levels of consolidated poverty in the OECD, according to a report on progress in equality over the last years.

By TPN/Lusa, in News · 24 May 2015, 08:50 · 1 Comments

Looking at all Organisation for Economic Co-operation and Development (OECD) countries and emerging economies such as China or Russia, the report concluded that inequality and poverty increased with the financial and economic crisis.

The report, with was unveiled in Paris, said that between 2011 and 2012, Portugal saw a reduction in the Gini coefficient which measures income inequality (0 for countries with income equality and 1 for those with the greatest difference).

Portugal comes ninth in the ranking of most unequal countries out of the 34 the OECD measured, above the average of 0.315.

The wealthiest 10% of the Portuguese population holds 25.9% of all the wealth, while the poorest 10% have just 2.6%.

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Comments

Quote: Portugal comes ninth in the ranking of most unequal countries out of the 34 the OECD measured, above the average of 0.315

Inequality is worse than you think - we are being lied to about it. The measure is useless for measuring inequality of the population or comparing one country with another.

I live in the UK and the Office for National Statistics had stated that inequality has improved under the right-wing government. However, the rich had been increasing income compound by up to 30% year on year - and the poor have to use food banks in record numbers. Therefore the measure must be flawed - so I tested and analysed it. I sent my findings to the ONS - in the form of a video presentation. However, the ONS were evasive and would neither confirm or deny that these findings were correct.

So now I am currently in communication with the UK National Statistician, the head of the UK Statistics Authority about the fact that the Gini coefficient is actually dumbing down inequality. It actually hides how bad inequality is getting.

Like other measures (e.g. S80/S20) it uses frequency distribution to deceive. I use the analogy in my video presentation that it is like measuring with a rubber band – inequality widens getting worse – yet the measure reads the same.

I made this chart for people who are no good at numbers. Please look at this income distribution chart (used as part of the video to the ONS). How can (an ideal?) country with only a 6:1 ratio of income distribution (6 x richest income to poorest) – with a much more even spread – be the same inequality as the UK? Just how is the UK the same inequality?

http://files.uk2sitebuilder.com/uk2group53213/image/1inequality32.3.png

The UK income distribution looks nothing like that – the rich end shoots up making even the average income of the population look tiny in comparison.

Here is the video which I made simple enough for people with basic maths skills to understand – except for those at UK Office for National Statistics it seems:

http://www.youtube.com/watch?v=x1Y_fUlYs-Q