How targeted are the European welfare states?

Not all European welfare states are created equal. Denmark and Norway target a good two thirds or more of its public social benefits to the bottom to income quintiles. Sweden is not far behind as is Finland as targeted welfare states.

Source: OECD Income Distribution database, via http://oe.cd/idd

Germany by contrast spreads its largess from its welfare state almost identically across the entire income spectrum. France does not seem the see the poor as a priority for the welfare state with larges increasing with the richer you get. The British are a bit messy where they target a quarter of their welfare state to the poor but another 30% of public cash social benefits go to the working poor or whatever they may be called.

Source: James Heckman (2009).

% of public cash benefits paid to the bottom income quintile, USA, UK, Australia and New Zealand – corrected

Australia does far better than any other country in targeting its welfare state to the bottom of the income distribution. Having an old age pension that is asset tested and income tested has a lot to do with that. New Zealand has an old age pension that is not income tested or asset tested. The USA has a contributory social insurance system that also ensures a considerable amount of its public social benefits are paid to the well off because they paid in Social Security taxes.

Source: OECD Income Distribution database, via http://oe.cd/idd

@janlogie The dramatic closing of the gender pay gap at the 10th percentile in the US, UK, Australia and NZ since 1970 but not at the 90th percentile!

It seems that the top 10% of men are so busy oppressing the top 10% of women that they forgot to keep up the violence inherent in the capitalist system against the bottom 10% of women. The gender pay gap at the bottom of the economic strata closed quite dramatically and consistently since 1970 or as far back as data was available in Australia, New Zealand, the UK and USA. Much of the closing of the gender pay gap for the low-paid was under the scourge of Reagan, Thatcher, Hawke and Keating and Rogernomics.

Source and Notes: OECD Employment Database. The gender gap plotted below is unadjusted. It is calculated as the difference between the 10th percentile earnings of men and the 10th percentile earnings of women relative to the 10th percentile earnings of men. Estimates of earnings used in the calculations refer to gross earnings of full-time wage and salary workers. However, this definition may slightly vary from one country to another.

By comparison to this dramatic liberation of women from the gender pay gap at the bottom, the gender pay gap for full-time employees has not really tapered down that much at the top of the income distribution and has been pretty flat for coming on 20 years. It seems the class war is over and has been won by women at the bottom but not at the top?

Rather than up the workers, the battle cry of the Posh Trots is up the managers, liberate them from insidious pay inequities imposed upon them by a vast sexist conspiracy of male managers.

Source and Notes: OECD Employment Database. The gender gap plotted below is unadjusted. It is calculated as the difference between the 10th percentile earnings of men and the 10th percentile earnings of women relative to the 10th percentile earnings of men. Estimates of earnings used in the calculations refer to gross earnings of full-time wage and salary workers. However, this definition may slightly vary from one country to another.

This failure to close the gender pay gap at the top requires more investigation. The available of reliable contraceptives in the late 1960s led to an explosion of investment by women in long duration professional education and in careers where absences because of motherhood in their 20s and 30s was penalised in terms of human capital depreciation and promotional opportunities.

The reason for the endurance of the gender pay gap at the top of the income distribution is compensating differentials. Women at the top were able to have it all.

Professional women could invest in a career and a family and mix-and-match according to their own preferences for career and family and timing of births rather than the preferences of others who looked upon them as some sort of pathfinder for their gender. It is at the top of the income distribution where short absences from the workplace can has very large consequences for wages and promotion.

How @MaxRashbrooke showed housing costs is the main driver of poverty when trying to argue rising inequality was not driven by housing costs

Source: No, Mr English, housing costs are not a key cause of inequality – Inequality: A New Zealand Conversation

Rashbrooke then goes on to discuss how housing costs were not a main driver of the growing gap between the top 10% and the bottom 10% of the income distribution in New Zealand. My point is he is more concerned with the politics of envy than with building political support for action against poverty.

Rashbrooke showed that the main driver of poverty in New Zealand is rising housing costs. That is easy to redress but for the opposition of the left-wing parties to reforms to the Resource Management Act that will increase the supply of land and thereby drive down housing costs and rents.

Housing costs gobbled up much of the rising incomes of the poor for many years now in New Zealand as Rashbrooke showed today. The New Zealand Labor Party and New Zealand Greens are doing nothing about it. The regulatory constraints on the supply of land could be gone by lunchtime if the self-proclaimed champions of the poor and social justice supported the reform of the RMA.

The proposals of the New Zealand Labour Party and Greens for the government to build more houses is pointless unless there is more land is supplied. If there is no increase in land supply, all the building of more houses by government does is build the same houses of private developers would have built on the same fixed supply of land. There must be an increase in the supply of land to drive housing costs down for the poor.

Percentage of females employed part-time and USA, UK and Canada

A lot more British women work part-time than in the USA or Canada. Is that good or bad?

Data extracted on 13 Oct 2015 01:59 UTC (GMT) from OECD.Stat

Male unemployment duration of more than one year in USA, UK, Canada, Germany and France since 1968 or earliest date

I do not know enough about Canadian politics and unemployment insurance arrangements to understand why its percentage of long-term unemployed did not change much after the global financial crisis while it skyrocketed in the USA. European unemployment duration is already been long. There was a significant improvement in the number of long-term unemployed as percentage of all unemployed men under the horrors of Thatcherism.

Data extracted on 13 Oct 2015 01:30 UTC (GMT) from OECD.Stat.

Australian and New Zealand harmonised unemployment rates since 1956

The unemployment rate was zero in New Zealand in 1956, 1957 and 1961. Apparently no one was jobless even for a day in New Zealand when changing jobs or entering or re-entering the workforce from outside employment, from school or other educational callings or as a migrant, if the OECD data is to be believed.

Data extracted on 13 Oct 2015 00:11 UTC (GMT) from OECD.Stat.

 

Unemployment was 1% for the rest of the 1960s in New Zealand before skyrocketing to 2.5% in 1975. By 1983, under the best of the good old days before the scourge of neoliberalism, unemployment rate had reached 5.5% after a steady increase from more than a decade.

The less than 1% unemployment was mostly under National Party rule but this era is looked upon with great fondness by the left-wing in New Zealand. Same in Australia where the good old days are known as the Menzies era: 23 years of Conservative party rule but beloved now by the left-wing as the ideal mixed economy.

Australian unemployment rates in the late 1960s was also pretty low given the requirements of labour market churn and entry on re-entry into the labour force.

US, Canadian and British harmonised unemployment rates since 1955 or earliest date

Canada has had much worse unemployment rates than the USA since the late 1970s. British unemployment rates have been doing okay since the late 1990s until the global financial crisis.

Data extracted on 13 Oct 2015 00:11 UTC (GMT) from OECD.Stat

The continued decline of violent crime in America

Are you happy in your job?

@HackneyAbbott @JeremyCorbyn4PM Another bad day for British ruling class

The withering away of unions as a working class movement @nzlabour @FairnessNZ

Source: CONVERSABLE ECONOMIST: Update on US Unions

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Boys, girls and the video games they play

What will it take to finish the Last Mile in ending extreme poverty

 

@GreenpeaceNZ @NZGreens energy poverty and extreme poverty

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