When the Productivity Commission reported in 2009 that average chief executive pay tripled from 1993 to 2009, you could have been forgiven for shrugging your shoulders and moving on. What else is new? The rich get richer and the poor get poorer, right? Well, no. At least, not all the time.
Edwina Economist is driving to an important meeting with her boss to discuss the prospects of her promotion. She is confident that she will get the promotion if she is punctual and relaxed. Unfortunately, she is running behind schedule. Edwina entertains the thought of speeding to 100km/h along a road with a limit of 80km/h – a road which she knows to have light traffic at this time of day and is monitored by speed cameras. This will get her to the meeting in just in time, and maximize her chance of promotion.
I attended my first Downing Lecture on Thursday night, and heard a fascinating speech by Professor John Micklewright, a research fellow from the Melbourne Institute. It was an interesting account on how the GFC had affected household incomes and income distribution across OECD countries. This blogpost will focus only on Professor Micklewright’s research on household incomes, starting with his findings and then giving you my response and reaction to his research.