These are the screen grabs Joanna is using -
THE DEVIL IS IN THE DETAIL
The Gini coefficient is a measure of statistical dispersion intended to represent the income distribution of a nation's residents, and is the most commonly used measure of inequality. It was developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper "Variability and Mutability"
A wealthy country and a poor country can have the same Gini coefficient, even if the wealthy country has a relatively equal distribution of affluent residents and the poor country has a relatively equal distribution of cash-strapped residents.
So where is the flaw in using the Gini coefficient in relation to Ireland's income distribution?
The Gini index is only as accurate as the gross domestic product (GDP) and income data that a country produces. Many developing nations do not produce accurate or trusted economic data, so the index becomes more of an estimate. There is also a generally negative correlation between Gini coefficients and per-capita GDP, because poorer nations tend to have higher index figures.
Ireland's GDP figures are notoriously suspect as is illustrated in the following blog from Financial Times Data -
Gross domestic product (GDP) – the product generated in a country- is similar to the gross national product (GNP) – the income of the country’s residents, in most countries.
But Ireland is one of the few countries where the two measures are significantly different and the gap between the two has been widening over time.
As Patrick Honohan (World Bank and CEPR) and Brendan Walsh (University College, Dublin) pointed out in a Brooking paper on economic activity, Ireland has by far the lowest standard rate of corporation tax on manufacturing among the advanced economies, resulting in multinational companies “locating a very high fraction of the enterprise’s global profits in Ireland (..) [but] in many cases, the huge profits recorded by the Irish affiliates have very little to do with the manufacturing activities being conducted in Ireland.”
The distortion could have significant impact in the way we calculate Irish economic performance and economic and fiscal position.
The GDP contraction during the economic crisis in 2009 was milder than that of GNP, while the economic recovery in 2011 was much faster.
The recovery in 2014 was the strongest in the Euro Area and similar across the two measures with growth rates of both GDP and GNP of approximately 5 per cent as domestic demand was a strong contributor to economic growth. Both the ECB and the Economic Research Institute (ESRI) forecast the Irish economic growth to remain strong in 2015 both in terms of GDP and GNP.
With GDP being about 20 per cent larger than GNP, Irish people appear to be richer that what they might feel they are. Ireland is first in the ranking of the Euro area (excluding Luxembourg) by GDP per capita.
But when we look at per capita gross national product, the Irish position is closer to the Euro area average.
Ireland can also boast to be in the top 10 world countries with the highest labour productivity as measured in GDP per hour worked. Using GNP figures its ranking would be very different.
The “distortion” of the Irish data led economic analysts- including ESRI- and Irish policy makers to prefer using GNP figures rather than GDP. International bodies- including Eurostat and the OECD use GDP figures but the OECD observer pointed out that Ireland GDP per head might not “accurately reflects Ireland’s actual wealth”.
A Gini level of 29.9 is very slightly below the EU average, but if, as the data above shows, our GDP figure in real terms is closer to the EU average, then the true factual Gini level is far higher and places us firmly among the most unequal countries in the world.
It is disingenuous to rely on the TASC report as a measure of Labour's success regarding inequality in Ireland.