A Tale of Two Cities: How to fix Auckland's widening wealth gap

Auckland is fast becoming two cities - one where the rich are prospering but the poor are lagging behind.

The Prosperity Index by Auckland Tourism, Events and Economic Development (ATEED) and Infometrics has confirmed this major inequality, and now there is a warning.

If Auckland and the country don't find a way to create more money per worker, then the divide will get even bigger.

In the third part of our collaboration with Stuff journalist Carmen Parahi, Simon Shepherd asks what the answer is to this "new urban crisis".

To view the full Stuff Newshub collaboration A Tale of Two Cities click here

A Tale of Two Cities: How to fix Auckland's widening wealth gap

Financial inequality is a global problem, and one Auckland is facing at a local level.

The answer seems simple - skills and education to create higher paid jobs, jobs in what's known as the "advanced industries" - tech-related jobs - a sector that is growing at over 5 percent a year.  

But the growth is not equal. In fact 80 percent of Auckland's tech businesses are within two kilometres of the CBD. So how do we spread those skills and turn two cities into one?

Timoti Wharewaka and his whānau live in Ōtara. In their words, it's a humble but happy home.

Mr Wharewaka should fit the inequality stereotype - Dad is diabetic, Mum a community health worker, and he went to a decile 1 high school. But he had a passion.

"I would say that I was a rare breed in that case," he said.

"But I knew for me it was something that I really wanted to do."

That passion is technology. Mr Wharewaka is a computer science graduate and, thanks to an internship programme called Tupu Toa, he now has a job at global tech consulting firm Accenture.

Timoti Wharewaka.
Timoti Wharewaka. Photo credit: Newshub.

Daniel Lund, Head of Cloud First at Accenture, said part of the company's business is to solve client problems.  

"The best way to do that is through diverse thinking, and for us, bringing people from all sorts of different backgrounds. It's about bringing diversity of thought to client problems."

Mr Wharewaka said he wants to develop his professional skills and get to the point where he can serve his community with those skills.

That's the the end goal Auckland as a city needs to attain - higher paying jobs or locals. But it's not the reality.

The poorer end of town is tackling unemployment and training through organisations like the Southern Initiative. It focuses on skills for the severe shortage in construction jobs, and for recruits it's a second chance.

But as crucial as they are, those jobs alone won't bridge the gap.

Even though Auckland has been booming, the party may be over.

Patrick McVeigh, general manager for economic growth at ATEED, says GDP per capita growth at a national level is a real concern.

"Basically it means that we are not adding as much value per worker as we should be."

So how can the situation be turned around? 

Tech industries and the tech sector are a fast-growing part of the Auckland economy.

An entire area of downtown Auckland at Wynyard Quarter is being developed as an innovation hub.

Another hub is being developed in Manukau, south Auckland.

Dave Parry.
Dave Parry. Photo credit: Newshub.

A new digital curriculum is being rolled out in schools and there's a lot of young talent around Auckland - but is it enough?

Vic Crone, ex-Auckland mayoral candidate and current CEO of Callaghan Innovation, said what's important is that we understand the technology and opportunities to come in the next decade, and ensure we are educating and providing people with more access to those opportunities.

The technology sector still struggles with the cliché image of the overweight guy writing code in a T-shirt with crumbs on it, according to Dave Parry, head of Computer Science at AUT.

"We have got a big image problem."

New Zealand is fighting a global war for talent. Graduates chase opportunities overseas, and attracting lecturers to teach here is proving difficult.

It's not only higher salaries and opportunities New Zealand is competing with.

It's also the huge appetite tech giants like Google, Amazon and Uber have for computer science and tech staff.

Those companies have been known to go to a university and "buy" the whole department.

If we can't get the people to train the people, businesses can't employ staff for new projects.  

The companies and people with good ideas will start to go overseas because they just can't get anybody. 

So it's crucial to inspire those who normally don’t go into the advanced industries and give them role models - like Timoti Wharewaka.

Mr Wharewaka's father Delmun said his son always had ambition.

"He has always wanted to start up his own business so that he could come back to the Otara community and help out all our youth here.

"Show them the pathways and give them the pathways that he had."