Minimum wage as % of median and the gender wage gap at the bottom of the New Zealand labour market

The minimum wage was pretty stable as a percentage of the median wage in New Zealand until recently. Nonetheless, the gender wage gap narrowed at the bottom of the labour market rapidly in the 1980s and 1990s.

Source: OECD Employment Database and Data extracted on 30 Nov 2015 04:03 UTC (GMT) from OECD.Stat.

In common with the USA, that narrowing of the gender wage gap stopped in the early 2000s after the minimum wage started increasing as a percentage of the median wage.

Again, that is contrary to the idea that the minimum wage is a failsafe that narrows the gender wage gap at the bottom. This failsafe is said to be the leading reason why the gender wage gap is much smaller at the bottom of the labour market than higher-up such as the median and in particular at the top.

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The Left’s Inequality Fixation Is Economically Foolish and Politically Impotent

International Liberty

I don’t understand the left’s myopic fixation on income inequality. If they genuinely care about the less fortunate, they should be focused on policies that produce higher incomes.

But instead, they agitate for class warfare and redistribution, which leads me to believe that many of them hate the rich more than they love the poor.

And while it’s surely true that governments can harm (or worse!) the financial status of folks like Bill Gates, that doesn’t help the poor.

Indeed, the poor could be worse off since statist policies are linked to weaker economic performance.

So relative inequality may decline, but only because the rich suffer even more than the poor (as Margaret Thatcher brilliantly explained).

That’s a bad outcome by any reasonable interpretation.

But let’s set aside the economic issues and contemplate the political potency of so-called income inequality.

Writing for the Wall Street Journal, William…

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Austerity II: The Devolution

Flip Chart Fairy Tales

Last week’s spending review took some of the pressure off public service spending. The chancellor now plans to cut much less than he told us he would in March. The difference is so great that, where, until recently, we were expecting deeper cuts than in the last parliament, those announced on Wednesday will be nowhere near as severe. Less will be cut from public services over the next half decade than over the last.

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Source:OBR Economic and fiscal outlook

Some services, like defence and the police, have found themselves inside the ring-fence once reserved for health, schools and international aid. Most of the unprotected departments have now seen the bulk of their cuts, with less to come during the rest of the decade.

The most obvious exception to this is local government. And boy is it an exception.

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According to the IFS, local government funding is due to take the biggest hit overall. It also has more cuts to come…

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Adam Smith on export promotion @stevenljoyce

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The minimum wage as % of the median wage and the gender wage gap at the bottom of the U.S. labour market

When feuding with strangers on Twitter about the gender wage gap, a common explanation for the much smaller gender wage gap at the bottom of the labour market is the power is the minimum wage to uplift women’s wages and with it narrow the gender wage gap at the bottom of the labour market.

Below I have plotted the minimum wage as a percentage of the median wage for the USA along with the gender wage gap for the bottom 10% of the U.S. labour market. Both are expressed as percentages of the median wage.

Source: OECD Employment Database and Data extracted on 30 Nov 2015 04:03 UTC (GMT) from OECD.Stat.

From what I can make of the above chart, the gender wage gap at the bottom of the labour market was closing rapidly when the minimum wage was falling as a percentage of the median wage. That gender wage gap then stabilised when the minimum wage stabilised as a percentage of the median. The gender wage gap increased when the minimum wage increased as a percentage of the median wage for full-time employees.

Should not this relationship between the minimum wage and the gender wage gap be the other way around if the minimum wage is a force for closing the gender wage gap at the bottom of the labour market?

 

The problem with reasoned discussion

Open Parachute

scienceoftruth-460-300x168

Why is  a straightforward logical discussion so impossible? Why do our discussion partners refuse to accept our reasoned arguments? And, if we are honest, why do we ourselves find it so difficult to accept the reasonable logic of our discussion partners?

Well, a recent article at the blog “Why We Reason” provides an answer. It is  Psychology’s Treacherous Trio: Confirmation Bias, Cognitive Dissonance, and Motivated Reasoning and reinforces what I have often felt – we are not really a rational species – more a rationalising one.

Beliefs dictate what and how we see

The article gets to the root of the matter – the psychological forces that fuel our conversations:

“While many like to believe that they have a special access to the truth, the reality is that we all see the world not as it is, but as we want it to be: Republicans watch Fox while Democrats…

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@geoffsimmonz Jess Berentson-Shaw reply on unconscious bias and the gender wage gap