The link between paid parental leave generosity and a larger gender pay gap-updated

FT_gender1223

But it also turns out that some countries that offer more liberal parental leave policies have higher pay gaps among men and women ages 30 to 34, according to analyses of 16 countries conducted by the Organization for Economic Cooperation and Development.

OECD theorizes that this link may be  driven by the fact that women are more likely than men to actually use their parental leave, and that time out of the workforce is associated with lower wages.

It is rather obvious if you pay women not to work, they will accumulate less job experience and miss out on promotional and other career advancement opportunities in their prime of their career.

FT_13.12.17_WageGap

As this OECD paper in 2012 found with regard to paid parental leave and gender gaps in employment and earnings:

…the provision and gradual lengthening of paid leave have contributed to a widening in the gender pay gap of full-time employees.

This may reflect the fact that women experience slower career and earnings progression on returning from leave to full-time employment than men, much fewer of whom take leave.

In sum, the development of parental leave policies in most countries appears to have had a positive, albeit marginal, role in the rise of female employment, although women pay a price in the form of reduced earnings progression.

Claudia Golden found that in some high-powered professions, any career interruption at all, can greatly reduce lifetime earnings.

via The link between parental leave and the gender pay gap | Pew Research Center.

Henry Hazlitt on whether unions can raise wages

Image

The UK’s welfare benefits cap of £26,000 per year – the income of the average working family

In case you'd forgotten - the families milking the system

Since the cap was introduced a year ago, more than 38,600 households have had the amount they are paid in benefits limited to £26,000 a year – the income of the average working family.

Despite predictions by critics that the new rule would cause misery, the poll – conducted by Ipsos Mori – found that 45 per cent of those affected say they have been spurred to return to work.

Benefits for couples and lone parents have been capped at £500 per week, or £350 for a single. childless person.

The £26,000-a-year cap is equivalent to an income of £34,000 before tax, which is similar to the salaries of many nurses and teachers.

heryl Prudham her husband Robert and their nine children

Cheryl Prudham, her husband Robert and their nine children are going on a trip to Menorca, just weeks after the mum said she should be given a bigger house at the expense of the taxpayer.

HT: Daily Mail – their photos above are a little bit too focused on ethnic minorities. The Daily Mail’s audience is the working class Tory and the lower middle class.

Happy Birthday Marie Curie!

James Tobin on limiting the domain of inequality

 

How to argue against the minimum wage when genuinely trying to argue for it – OECD edition

The 2014 OECD employment outlook argued for modest minimum wage increases while at the same time setting out all the steps necessary to manage the unintended consequences of minimum wage regulation:

Mandatory minimum wages, which now exist – or are being implemented – in 26 OECD countries and a number of emerging economies, can help underpin the wages of low-paid workers.

Evidence suggests that, when set at an appropriate level, minimum wages tend to have only a small adverse effect on employment.

Sensible minimum-wage design includes: taking account of differences by region according to the average income level, as well as by age in experience and productivity; ensuring that the level and adjustments of the minimum wage involve independent commissions; and reducing social security contributions to lower non-wage labour costs at the minimum wage (Emphasis mine).

George Stigler made very similar criticisms of the impracticality of a single minimum wage in 1946:

If an employer has a significant degree of control over the wage rate he pays for a given quality of labour, a skilfully-set minimum wage may increase his employment and wage rate and, because the wage is brought closer to the value of the marginal product, at the same time increase aggregate output…

This arithmetic is quite valid but it is not very relevant to the question of a national minimum wage. The minimum wage which achieves these desirable ends has several requisites:

1. It must be chosen correctly… the optimum minimum wage can be set only if the demand and supply schedules are known over a considerable range…

2. The optimum wage varies with occupation (and, within an occupation, with the quality of worker).

3. The optimum wage varies among firms (and plants).

4. The optimum wage varies, often rapidly, through time.

A uniform national minimum wage, infrequently changed, is wholly unsuited to these diversities of conditions

Modest minimum wage increases must varying in their modesty by individual worker quality,  occupation, region, firm and plant and the extent to which this modesty can be excessively immodest can change rapidly through time. Little wonder that the OECD refers to minimum wage regulation as a careful balancing act.

In sum, to avoid throwing a good number of low paid, low skilled workers onto the scrapheap of society for the sake of their more employable co-workers, the minimum wage pretty much be set separately for each individual worker. The labour market does that now.

Fraudster Alan Knight jailed for £40,000 scam after pretending to be in a coma for two years | Daily Mail Online

But doctors spotted Knight - pictured with wife, Helen - eating, wiping his face and writing while he was in hospital for observations

doctors spotted Knight – pictured with wife, Helen – eating, wiping his face and writing while he was in hospital for observations

via Fraudster Alan Knight jailed for £40,000 scam after pretending to be in a coma for two years | Daily Mail Online.

The slums of Jebson Pl – down and out in New Zealand includes Sky TV

10716447 copy

via Whale Oil Beef Hooked  and waikato-times

Working for Families and work incentives

Figure 18: Effective marginal tax rates (year ending March 2013, non-beneficiaries, in percentages)

There are 3.38 million individual taxpayers. Of these, about 120,000 (3.4 percent) face EMTRs over 60%, 120,000 (3.4 percent) face EMTRs between 50% and 60%, and 160,000 (4.5 percent) face EMTRs between 40% and 50%. Slightly more than 88 percent of taxpayers face EMTRs below 40%.

HT: New-Zealand-tax-system-and-how-it-compares-internationally

Wellington City Council builds inner city children’s sandpit next to red-stickered buildings marked for collapse in next earthquake

That Catcalling Video and Why “Research Methods” is such an Exciting Topic (Really!) — The Message — Medium

The filmmakers claim to have shot this video while walking the streets of Manhattan for 10 hours, but over half of the shots in the video are actually taken from just one street, namely 125th St. in Harlem.

via That Catcalling Video and Why “Research Methods” is such an Exciting Topic (Really!) — The Message — Medium.

The quality of public policy debate in NZ: is the sale of surplus public housing an asset sale (privatisation)?

Prior to the October 2014 election, Prime Minister Key promised that there will be no further asset sales.

After the election, he announced an intention to possibly sell billions of dollars in public housing to use the sales to buy new public housing in other parts of New Zealand, such as in the suburbs and the perimeter of cities.

This was immediately denounced by the opposition as a broken election promise. Apparently a promise not to sell any further state owned enterprises is now interpreted not to sell any assets in the government balance sheet.

Journalists swallowed this criticism of the opposition, hook, line and sinker. The media seems to think that buying and selling of surplus government assets by Housing New Zealand and other social agencies is somehow unusual or new.

Any sensible observer would think it would be barmy for Housing New Zealand to have a whole bunch of old, rundown public houses purchased in the middle of the 20th century in the inner cities that are now worth a million of dollars each and not consider selling them.

These million-dollar public houses could be sold to finance the construction or purchase of several new houses for social housing purposes out in the suburbs.

What is the purpose of public housing? It is supposed to have something to do with helping the poor.

That would include managing the stock of public houses so that inner-city houses now worth a fortune are sold to finance more houses in the suburbs where most of the poor live.

Occupy Wall Street protesters didn’t like what they found when they actually met the bottom 1%

Occupy Wall Street protesters are in their second month of being stationed at Zuccotti Park.

The Occupy Wall Street protesters had free food provided by kitchens staffed by volunteers.

Occupy Wall Street Chefs Stop Cooking Fancy Meals

These self appointed representatives of the bottom 99% didn’t appreciate brushing shoulders with the bottom 1 percent of the social stratum:

The Occupy Wall Street volunteer kitchen staff launched a “counter” revolution yesterday — because they’re angry about working 18-hour days to provide food for “professional homeless” people and ex-cons masquerading as protesters.

For three days beginning tomorrow, the cooks will serve only brown rice and other spartan grub instead of the usual menu of organic chicken and vegetables, spaghetti bolognese, and roasted beet and sheep’s-milk-cheese salad.

They will also provide directions to local soup kitchens for the vagrants, criminals and other freeloaders who have been descending on Zuccotti Park in increasing numbers every day.

To show they mean business, the kitchen staff refused to serve any food for two hours yesterday in order to meet with organizers to air their grievances, sources said…

Overall security at the park had deteriorated to the point where many frightened female protesters had abandoned the increasingly out-of-control occupation, security- team members said.

Bryan Caplan on the pathologies of poverty

Bryan Caplan drew up a nice list of factors that contribute to poverty

  • alcoholism: Alcohol costs money, interferes with your ability to work, and leads to expensive reckless behaviour.
  • drug addiction: Like alcohol, but more expensive, and likely to eventually lead to legal troubles you’re too poor to buy your way out of.
  • single parenthood: 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.
  • unprotected sex: Unprotected sex quickly leads to single parenthood.  See above.
  • dropping out of high school: High school drop-outs earn much lower wages than graduates.  Kids from rich families may be able to afford this sacrifice, but kids from poor families can’t.
  • being single: Getting married lets couples avoid a lot of wasteful duplication of household expenses.  These savings may not mean much to the rich, but they make a huge difference for the poor.
  • non-remunerative crime: Drunk driving and bar fights don’t pay.  In fact, they have high expected medical and legal expenses.  The rich might be able to afford these costs.  The poor can’t.

Caplan argues that there is an undeserving poor if they fail to follow the following reasonable steps to avoid poverty and hardship:

  1. Work full-time, even if the best job you can get isn’t fun.
  2. Spend your money on food and shelter before getting cigarettes and cable t.v.
  3. Use contraception if you can’t afford a child

The Feed the Kids Bill still leaves their parents to go hungry!

The Feed the Kids Bill that has been reintroduced into the new New Zealand Parliament still contains no provision to feed the parents who are too poor to make their children breakfast.

Why are these hungry parents not invited for breakfast as well? No parent would have breakfast if their children was to go hungry. Both the parent and child must have gone hungry that morning, perhaps morning after morning. There is no other charitable explanation.

The Bill aims to set up government funded breakfast and lunch programmes in all decile 1-2 schools. The cost is $100 million a year – including food, staffing, administration, monitoring and evaluation.

Lindsay Mitchell was on the money when she wrote:

Even parents reliant on a benefit are paid enough to provide some fruit and modest sandwiches daily.

An inability to do so is a symptom of a greater problem requiring scrutiny – for the sake of their child.

“The ‘income management’ regime provides a response to genuinely hungry children.

It may interest you that even Labour advocated for extended income management in its election manifesto.

Their 2014 ‘Social Development’ policy paper proposed, “…allow[ing] income management to be used as a tool by social agencies where there are known child protection issues and it is considered in the best interests of the child, especially where there are gambling, drug and alcohol issues involved.”

Hungry children is a child protection issue. Parents who fail to feed their children should come to the attention of the child protection authorities. Those on the benefit should be subject to income management  because they clearly are spending their money elsewhere.

On the Left, there is a refusal to discuss the role of addiction and incompetent parenting in child poverty. The 2014 election manifesto of the Labour Party is a welcome departure from that tradition of denial.

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