On the back of statistics released yesterday there has been some grizzling about the top 10% increasing their share of household wealth. I am not about to argue with the data. My position is that the inequality is being substantially driven by change in family structure. Look at the data from the tables:
The median household wealth at June 2015 was $289,000.
One parent households with dependent child(ren) have a median household wealth of just $26,000 - less than a tenth of the median.
The wealthiest households are empty-nest couples or those with adult children living at home.
In the tiny cohort of my children's friends, more than half of their parents split at some point after their birth. It's a fairly middle-class sample. About half of the separated mothers have stayed single.
We live in world characterised by relationship instability yet expect or want the division of wealth to remain what it was when marriage was almost universal and divorce unusual.
The following graphs depict household incomes as opposed to wealth but they illustrate the point I am making. I compared household incomes from the 1966 census to those in the 2013 census and adjusted to $2013:
In 1966 far more families were clustered in the two middle income bands. There were fewer families at the extremes.
(While the 1966 data only comprised married families, just 4.3% of all families were excluded. They were predominantly widows. Even if those families were added to the lowest income bands, the bands' content would still be below 10%. In contrast, by 2013, 25 percent of families appeared in the lowest income bands.)
Yet the constant refrain is that growing inequality is the fault of factors beyond the individual's control.
I believe it's more a facet of personal choice. Don't get me wrong. I am all for personal choice. But there remains a distinction between good and bad choices, notwithstanding a 'bad' choice may be 'good' choice if you don't mind being poor. But don't then complain about it - personally or on somebody else's behalf - and blame a host of other factors like capitalism, unemployment, low wages etc.
The current levels of income inequality and wealth will continue to grow if people continue to choose to raise children alone or have children by multiple partners. Not all, but most, will end up at the wrong end of the income scale.
17 minutes ago