Economic Affairs

Focus on right measures of income inequality

Zeroing in on income of the top 10 per cent will yield suggestions of Robin Hood taxes on the rich. But, in fact, inequality has remained stable here, and the poor are making progress

I read with interest Professor Linda Lim's article about income inequality and its debilitating effects on Singapore's growth ("How inequality and low wages can stall growth"; July 21). While I agree with several of her points, especially that too much inequality can have adverse consequences, I disagree with her on many others.

While Prof Lim alludes to the Gini coefficient, a fair bit of the data she cited - including from the World Inequality Report 2018 by a group of researchers, including French economist Thomas Piketty - is about the income garnered by the top 10 per cent of the population. The income garnered by this group is a flawed measure of income inequality and has very little bearing on how the average person is faring.

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A version of this article appeared in the print edition of The Straits Times on August 08, 2018, with the headline 'Focus on right measures of income inequality'. Print Edition | Subscribe