Interpac Business and Migration Solutions Melbourne Australia

(April 8, 2010)

THE gap between the rich and the rest is becoming ever wider.

Australian National University economist Andrew Leigh and Oxford University's Tony Atkinson have compared incomes going back to 1921 and found that the wealth of the country's best-paid workers was rising much faster than the rest. The researchers found that the relative incomes of the richest 1 per cent -- those earning more than $197,000 in 2007 -- declined between 1921 and 1980 but had been rising since then, The Australian reported.

Their share of total household income had doubled since 1980 to the point where they now had 10 times the average income."This pattern is even starker among the top 0.1 per cent -- those earning more than $693,000 in 2007 -- whose share of household income has more than tripled since 1980," said Professor Leigh.The highly paid included Australia's company bosses, High Court judges and top public servants.

From 1993 to last year, the pay of the top 100 chief executives rose twice as fast as the salary of ordinary workers. In that period, the average earnings of chief executives rose by an average of 7.5 per cent a year.Over the same period, average salaries across the economy rose by about 3.7 per cent per annum. In 1993, the average earnings of chief executives in the top 100 Australian firms was about $1 million. By last year, this had risen to about $3 million. The salaries of High Court judges and the country's top public servants had also risen faster than average earnings.

Professor Leigh said former Midnight Oil frontman and Labor minister Peter Garrett had it right when he sang "The rich get richer and the poor get the picture". "It's not that the poor are actually getting poorer. It's just that they are not enjoying the same gains from growth that the top are," he said. The poor not enjoying the same gains as the rich. "This is a measure of the economic power accruing to those at the very top of the distribution."

The same pattern occurred in all English-speaking Western countries, including Britain, the US and Canada. Professor Leigh said several factors drove the widening gap. "These include internationalisation of labour markets for executives, technological change and lower marginal tax rates," he said.

(Source from:news.com.au)