The average top income in New Zealand is that of a professional, executive or entrepreneur.
Source: The World Wealth and Income Database.
Average top incomes in New Zealand
05 Jul 2016 Leave a comment
in human capital, labour economics, labour supply, occupational choice, poverty and inequality Tags: creative destruction, entrepreneurial alertness, top 1%
Where do ISIS foreign fighters come from and why?
04 Jul 2016 Leave a comment
in defence economics, labour economics, occupational choice
ISIS foreign fighters are not driven by economic deprivation or inequality. In What Explains the Flow of Foreign Fighters to ISIS? (NBER Working Paper No. 22190),Efraim Benmelech
and Esteban F. Klor found that many foreign fighters come from countries with high levels of economic development, low income inequality, and highly developed political institutions.
Foreign ISIS recruits come largely from prosperous, ethnically and linguistically homogeneous countries. As Alan Krueger explains in a discussion of terrorism is an occupational choice:
One of the conclusions from the work of Laurence Iannaccone—whose paper, “The Market for Martyrs,” is supported by my own research—is that it is very difficult to effect change on the supply side.
People who are willing to sacrifice themselves for a cause have diverse motivations. Some are motivated by nationalism, some by religious fanaticism, some by historical grievances, and so on. If we address one motivation and thus reduce one source on the supply side, there remain other motivations that will incite other people to terror.
Malcontents join the jihadists today for the same reasons they joined the Red Brigade, the Japanese Red Army Faction and Baader-Meinhof gang in the 1970s and 1980s. Plenty of young people were attracted to communism in previous generations as a way of sticking it to the man.
Now as then economic conditions were good as were political freedoms. Italy, Japan and Germany were all at the peak of recoveries from war. Japanese incomes are doubled in the previous decade. Germany and Italy were rich countries. As Alan Krueger explains:
Despite these pronouncements, however, the available evidence is nearly unanimous in rejecting either material deprivation or inadequate education as important causes of support for terrorism or participation in terrorist activities. Such explanations have been embraced almost entirely on faith, not scientific evidence.
Each generation has its defining oppositional identity. Radical Islam is the oppositional identity of choice for today’s angry young men and women. Mind you, they have to buy Islam for dummies to understand what they’re signing up for.
In previous generations, it was communism, weird Christian sects, eco-terrorism, animal liberationist terrorism and a variety of domestic terrorists of the left and right with conspiratorial motivations. Look at the level of diversity of the angry young men and women on the domestic terrorists list of the FBI.
One jihadists when interviewed said that 30 years ago he would probably have become a Communist as his vehicle for venting his frustrations.
.@MaxRashbrooke kills case for #UBI @GrantRobertson1 @JordNZ
03 Jul 2016 Leave a comment
in applied welfare economics, politics - New Zealand, poverty and inequality, Public Choice, public economics
Rashbrooke in the snap-shot quote describes the massive new taxes to fund a universal basic income as a policy shift for which middle New Zealand must be prepared properly over many years. But the purpose of these great big new taxes is to ensure that those with whom the modern welfare state was designed to protect our left no worse off, not better off, just as good as they were under the previous regime of social insurance. Why take that journey when you can target their poverty directly to the current welfare state?
Source: Is Labour really going to deliver a UBI? – Inequality: A New Zealand Conversation.
Wage gaps by gender, race and ethnicity persist in the USA
03 Jul 2016 Leave a comment
in discrimination, economics of education, gender, human capital, labour economics, labour supply, occupational choice, politics - USA Tags: employer discrimination, ethnic wage gap, gender wage gap, racial discrimination, racial wage gap
Work-life balance drives what is left of the gender wage gap
30 Jun 2016 Leave a comment
in discrimination, gender, occupational choice
The rise and rise of power couples in the USA
30 Jun 2016 Leave a comment
in economic history, economics of love and marriage, labour economics
.@nzteu is right, student loans entrench inequality
29 Jun 2016 Leave a comment
in economics of education, economics of love and marriage, human capital, labour economics, occupational choice, poverty and inequality Tags: power couples, student loans
Those of European ethnicity had a median net worth of $114,000, compared with $23,000 for Māori , $12,000 for Pasifika and $33,000 for Asians according to the latest Statistics New Zealand data just released.
The Tertiary Education Union made great play about how much of the low net worth of young people and others is due to student loans
Young people (aged 15–24) had the lowest individual median net worth of any age group – just $1,000. The most common debt for young people is education loans.
The union then goes on to say that
Median education loan liabilities are only one-tenth of Pākehā people’s median assets, but they are a quarter of Māori people’s assets and over a third of Pacific people’s assets (table 7.01).
The data shows that the households with the smallest median net worth have the largest median education loans (table 2.02). These loans make up nearly a quarter of their total debt (table 2.03).
Over a third of households within the poorest quintile of net worth have education loans, whereas less than a tenth of households in the wealthiest quintile have education debt (table 2.04).
In a nutshell, not enough people are going to university because of the prospect of repaying student loans and more would go if it were cheaper and that would reducing inequality. The explosion in tertiary educational attendance over the last generation, an increase of about 150% for the adult population aged 25 to 64 was not good enough to reduce inequality.
Free tuition at University is a hand-out to those already had a good start in life. It will be paid for by those who will never go because they do not have an above average IQ.
How much more will you earn by going to university? It depends hugely on which country you're from http://t.co/7RMnUTM8nj—
paulkirby (@paul1kirby) September 11, 2015
Low-cost student loans were supposed to be away to reduce inequality. Instead, they give a flying start to those of already above-average talents. If social justice is to mean anything, it does not involve giving freebies to those who already have a head start in life.
The average student loan debt is about $14,000 while the lifetime earnings premium from university education is about $1/2 million in New Zealand.
Source: Statistics New Zealand, Household net worth statistics: Year ended 30 June 2015.
Lowering university tuition fees and easing the terms of student loans simply means that those who do well at university will not have to pay back as much to the government. People who succeed at university already have above average IQs so they already had a good head start in life.
Charles Murray points out that succeeded at college requires an IQ of at least 115 but 84% of the population don’t have this:
Historically, an IQ of 115 or higher was deemed to make someone “prime college material.” That range comprises about 16 per cent of the population. Since 28 per cent of all adults have BAs, the IQ required to get a degree these days is obviously a lot lower than 115.
Cheaper higher education does not help the not so smart secure a qualification they lack the innate talent to earn with decent marks and increases the chance of smart men and women marrying. This increases the inequality between power couples and the rest.
Generation Unbound – The drift into parenthood without marriage
26 Jun 2016 Leave a comment
in economics of love and marriage, gender Tags: economics of fertility, marriage and divorce, single parents
Over half of all births to young adults in the United States now occur outside of marriage, and many are unplanned. The result is increased poverty and inequality for children. The left argues for more social support for unmarried parents; the right argues for a return to traditional marriage. In Generation Unbound, Isabel V. Sawhill offers a third approach: change “drifters” into “planners.”
Robots Are Really Bad At Folding Towels
25 Jun 2016 Leave a comment
in economics, economics of media and culture, entrepreneurship, human capital, labour economics, labour supply Tags: creative destruction, robots
Source: Robots Are Really Bad At Folding Towels : Planet Money : NPR.
Robots came and conquered many decades ago and we survived
25 Jun 2016 Leave a comment
in economic history, labour supply
Gender preferences for higher earnings vs. other job attributes
25 Jun 2016 Leave a comment
in discrimination, gender, human capital, labour economics, labour supply, occupational choice
Differences in raw gender wage gaps may be almost entirely the result of the individual choices made by both male and female workers.
@younglabournz @YoungGreensNZ @nleemariu forgot family planning empowers women on @BackBenchesTV
23 Jun 2016 Leave a comment
in discrimination, gender, labour economics, politics - New Zealand, poverty and inequality
Control over the number and spacing of women was central to women’s liberation. Young Labour and the Wild Greens forgot that last night on the BackbencherTV show. Neither could handle the notion that people should wait until they can afford to have children before having them. This is an old working class value with which the Young Labour panel member completely disagreed.
The number of children and the spacing between their births has been a major driver of the gender wage gap for decades. Central to greater female participation in the workforce and society outside the home is smaller families.
Many woman put-off having children to their late 20s and early 30s so they could first consolidate their education and career.
Bryan Caplan argues that there is an undeserving poor if they fail to follow the following reasonable steps to avoid poverty and hardship:
- Work full-time, even if the best job you can get isn’t fun.
- Spend your money on food and shelter before getting cigarettes and cable TV.
- Use contraception if you can’t afford a child
Raising a child takes a lot of effort and a lot of money. One poor person rarely has enough resources to comfortably provide this combination of effort and money.
Young Labour in particular has forgotten the old working class value of being a responsible parent able to afford to raise your children and give them the best things in life.
Being a parent is hard work that requires a bit of discipline if child poverty is to be avoided through ill-considered choices and a lack of family planning.
Young Labour has forgotten the policy of the Labour Party on family planning
Labour believes that all individuals should have control over their own sexual and reproductive lives. An individual’s choice to determine the number and timing of one’s children cannot be compromised.
To ensure that all people can make free and informed choices about their future, Labour supports safe, affordable and universal access to contraception, sexual and reproductive services and information. Labour recognises all women have the right to make their own choices about their own bodies, and should have access to abortion services
New Zealand has a high rate of unplanned pregnancies, estimated at between 40% and 60% of all pregnancies. Labour’s health spokesperson, Annette King agrees that it is a problem and for too long people have avoided dealing with it.
Does abolishing bureaucracy save the #UBI? Avoid a great big new tax?
23 Jun 2016 Leave a comment
in applied welfare economics, income redistribution, politics - USA, poverty and inequality, public economics Tags: expressive voting, social insurance, universal basic income
Firing the entire welfare state bureaucracy does not save the day for a universal basic income as Robert Greenstein explains
Suppose UBI provided everyone with $10,000 a year. That would cost more than $3 trillion a year — and $30 trillion to $40 trillion over ten years.
This single-year figure equals more than three-fourths of the entire yearly federal budget — and double the entire budget outside Social Security, Medicare, defense, and interest payments. It’s also equal to close to 100 percent of all tax revenue the federal government collects…
Where would the money to finance such a large expenditure come from? That it would come mainly or entirely from new taxes isn’t plausible.
We’ll already need substantial new revenues in the coming decades to help keep Social Security and Medicare solvent and avoid large benefit cuts in them. We’ll need further tax increases to help repair a crumbling infrastructure that will otherwise impede economic growth. And if we want to create more opportunity and reduce racial and other barriers and inequities, we’ll also need to raise new revenues to invest more in areas like pre-school education, child care, college affordability, and revitalizing segregated inner-city communities.
A UBI that’s financed primarily by tax increases would require the American people to accept a level of taxation that vastly exceeds anything in U.S. history. It’s hard to imagine that such a UBI would advance very far, especially given the tax increases we’ll already need for Social Security, Medicare, infrastructure, and other needs.
Utopia, you are standing in it! 
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