The growing problem of income inequality in New Zealand and around the world will have significant effects on the consumption or work, goods and services by myself and my family and society as a whole. This essay will discuss these effects on consumption should this inequality continue on its current path. I will begin by discussing income inequality and the evidence of it today and the issues that this inequality creates in society. The essay will then give an overview of my current position in society and the market and I will then discuss some issues and future implications of income inequality and how they will shape the consumption of work, goods and services by my family and myself. This section will also consider how the psychological aspects of consumption could be affected by income inequality and deal with the social ramifications of this inequality and look at any possible changes to our consumption from a cultural sense. This essay will argue that income inequality can have significant potential to change the future consumption of work, goods and services by myself and my family.
The concept of income inequality is not new it has been discussed by politicians and economists for a number of years if not centuries, as the old adage says ‘the rich get richer the poor get poorer’. The ministry of social development defines it as, “The extent of disparity between high income and low income households” (Ministry of Social Development, 2010) and it essentially deals with the fact that the majority of the wealth in New Zealand resides with a minority of the people. In recent years there has been a large amount of press about this issue, “Anger over income inequality has already sparked popular backlash in the form of Occupy Wall Street and other similar demonstrations.” (Gore, 2013, para. 3). This garnered a lot of press because every country has a large measurable amount of income disparity. The amount of disparity between households can be measured by the Gini coefficient.
Gini coefficients measure income inequality, with a score of 100 indicating perfect inequality and a score of 0 indicating perfect equality. The most recent OECD comparison (from 2004) gives New Zealand a score of 34, indicating higher inequality than the OECD median of 31 and a ranking of 23rd equal out of 30 countries. (Ministry of Social Development, 2010, p. 65).
This index gives us a comparison with other countries and as shown by the ministry of social development New Zealand does not compare favourably. This inequality can and usually does cause a large amount of social problems, most of which impact on the way consumers interact with the market. These problems include difficulties in social mobility, education, house ownership, crime, health and large implications for the economy. “Moving money from the bottom to the top lowers consumption because higher-income individuals consume, as a fraction of their income, less than lower-income individuals do” (Stiglitz, 2012, para 6). Some of these problems outlined are often referred to as social degradation but are more oft caused by income inequality and they all shape the way we consume goods, services and work.
The implications of this inequality of income across society will cause a shift in the class paradigm, with the middle class eventually disappearing. At this time I would class my family’s current social position as middle class; we enjoy most modern luxuries and give our pre-school children everything we can to give them a good wholesome start in life. They attend kindergarten, have never wanted for a healthy meal or an item of clothing and have a large collection of toys to keep them entertained. However most importantly, my wife and I are able to spend a good amount of time interacting with them. This will have the biggest impact on their future. Although we enjoy the middle class status at this time, we are walking the proverbial tightrope where our finances are concerned. We both have to work and rely on student financial assistance to pay our mortgage and keep our growing debt in check. Due to house prices and inflation growing faster than middle or lower class incomes in 2020 my family will be the last of the middle class.
All wages earned by myself and my wife will be consumed if our current levels of income and expenditure continue. As currently we have little room for savings, we will both have to work harder and longer hours to support the needs of our family and will be unable to spend quality time with our children or each other. This absence of parental involvement could cause a breakdown in the family unit and will lead to instability for my family, particularly my children in the home and the classroom; these instabilities can lead to two implications. Firstly, the possible educational issues that could arise and the inequity of education between the wealthy and the lower class will position my children on the lower rungs of society and provide further difficulties in social mobility. Secondly, the instability in the home can lead to behavioural issues, problems with the law, possible teen pregnancies and mental health and addiction problems, and that’s just the adults. These problems already exist in our culture and are determinants of the lower socio-economic parts of society; we can expect to see an increase in these issues as the income gap continues.
However not all of our problems will be caused by the rate of inflation and the amount of hours we work; a lot of the issues we will face will be how we change as consumers of goods. Currently my wife and I both follow our respective stereotypical gender roles: my wife enjoys shopping for clothes, shoes and matching accessories and does the majority of the household shopping, while due to my job selling electronic appliances I am materialistic and happy to keep all of our home electronics and gadgets completely up to date. Although aware we should focus our consuming on the first few layers of Maslow’s pyramid, the physiological necessities (Simons, J. A., and Irwin, D. B., and Drinnien B.A., 1987), at first we won’t. We will initially continue this pattern of spending in 2020 because my family and I are avid consumers and have a culture of buying goods before we can afford them; we need to fulfil that psychological urge to improve our disposition in the short term by using “retail therapy” (Schmich, M. 1987, Para. 1). This is an attempt to fulfil the esteem level, the fourth level, of the pyramid in Maslow's hierarchy of needs theory. (Simons, J. A., and Irwin, D. B., and Drinnien B.A., 1987)
The hierarchic theory is often represented as a pyramid, with the larger, lower levels representing the lower needs, and the upper point representing the need for self-actualization. Maslow believes that the only reason that people would not move well in direction of self-actualization is because of hindrances placed in their way by society. (Simons, J. A., and Irwin, D. B., and Drinnien B.A., 1987, Para. 10)
This inability to curb our consumption of goods and services will cause us to spend far beyond our meagre incomes, driving us further into debt, creating more “rent seeking” (Stiglitz, 2012, para. 10) profits for the financial institutions and widening the gap between the social classes.
One of the obvious hindrances placed in our way of self-actualization will be the inequality of income that will be prevalent in society in 2020 and this will cause an excess consumption of work. Due to this excess of consumption of work we will be motivated to buy labour saving products and services such as ready-made meals, home appliances and other time saving devices to minimise the household labour and maximise the time we have between work and family commitments (Saren, M. (2006). These necessary purchases will not satisfy our need for social belonging as we will still be heavily influenced by those around us and the culture at the time. We will still purchase the popular items within our culture at the time, all so we can continue to be socially acceptable and keep our social identity. Although the popular culture at the time will more than likely focus on lower cost items as the majority of people will be on lower incomes, any high cost items would set you apart from the norm. The norm in 2020 can be quite adequately described by an Ellen Goodman quote.
Normal is getting dressed in clothes that you buy for work, driving through traffic in a car that you are still paying for, in order to get to a job that you need so you can pay for the clothes, car and the house that you leave empty all day in order to afford to live in it. (n.d)
This description, although humorous, is true for a large part of society today.
The issue of income inequality will cause this description of a normal reality to be the case for a much larger part of society in 2020. My family and I will have to increase its consumption of work by a large amount to afford the standard of living that we need. Our family will suffer for this as we will spend more time at work than at home, it will take a period of adjustment to change our consumption of goods from the material to the necessary and there will be a shift in favour of time-saving products and services from luxury goods.
We will indeed be living to work and not working to live.

References
Goodman, E. (n.d) Retrieved March 25th 2013, from http://www.goodreads.com/author/quotes/108927.Ellen_Goodman
Gore, Al. (March 10, 2013), Worsening Income Inequality. Retrieved March 25th 2013 from http://blog.algore.com/2013/03/worsening_income_inequality.html, para. 3
Ministry of Social Development. (2010). The Social Report. Retrieved March 25th 2013 from http://www.socialreport.msd.govt.nz/economic-standard-living/income-inequality.html
Ministry of Social Development. (2010). The Social Report. Retrieved March 25th 2013 from http://www.socialreport.msd.govt.nz/documents/economic-standard-of-living-social-report-2010.pdf, p.65
Saren, M. (2006). Marketing graffiti: The view from the street. Oxford, UK: Elsvier Ltd., 2006, p. 97
Schmich, Mary (24 December 1986). A Stopwatch on Shopping. Chicago Tribune. Retrieved 28 November 2012, from http://articles.chicagotribune.com/1986-12-24/features/8604060073_1_shopping-shaky-ground-festive-hat
Simons, J. A., & Irwin, D. B., & Drinnien B.A. (1987). Psychology - The Search for Understanding. New York. USA: West Publishing Company. Retrieved March 25th 2013 from http://web.archive.org/web/20100211014419/http://honolulu.hawaii.edu/intranet/committees/FacDevCom/guidebk/teachtip/maslow.htm
Stiglitz, J. (May 31 2012). The Price of Inequality, The 1 Percent’s Problem, Vanity Fair, Retrieved March 25th 2013 from http://blackboard.otago.ac.nz/webapps/portal/frameset.jsp?tab_tab_group_id=_2_1&url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype%3DCourse%26id%3D_23574_1%26url%3D