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:
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 t.v.
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.
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.
Concerns about the lack of women undertaking careers in science and engineering are based on one simple false premise: that science and engineering are the most prestigious choices available to women with great ability in maths and science at high school.
If relatively more prestigious career options are open to women who also happen to qualify for science and engineering, women will be underrepresented in science and engineering simply because they have better career options than the men who become scientists and engineers.
In New Zealand, just as many women as men qualify for science and engineering and the IT degrees. Not as many women who have qualified take up this option simply because they also qualify for medicine and law in greater numbers than the men who happen to qualify for science, engineering and IT degrees.
Women may be less likely to pursue careers in science and math because they have more career choices, not because they have less ability, according to a new study published in Psychological Science.
Although the gender gap in mathematics has narrowed in recent decades, with more females enrolling and performing well in math classes, females are still less likely to pursue careers in science, technology, engineering, and mathematics (STEM) than their male peers.
Researchers tend to agree that differences in math ability can’t account for the underrepresentation of women in STEM fields. So what does?
Developmental psychologist Ming-Te Wang and his colleagues at the University of Pittsburgh and University of Michigan wondered whether differences in overall patterns of math and verbal ability might play a role.
The researchers examined data from 1490 college-bound US students drawn from a national longitudinal study. The students were surveyed in 12th grade and again when they were 33 years old. The survey included data on several factors, including participants’ SAT scores, various aspects of their motivational beliefs and values, and their occupations at age 33.
Looking at students who showed high math abilities, Wang and colleagues found that those students who also had high verbal abilities — a group that contained more women than men — were less likely to have chosen a STEM occupation than those who had moderate verbal abilities.
This outcome is no surprise for those familiar with the gap between men and women in verbal and reading abilities – a gap that is strongly in favour of women
The OECD PISA tests at the age of 15 find that teenage boys have a slight advantage in maths – a few percentage points – teenage girls have a serious advantage in reading.
The OECD PISA tests at the age of 15 find that this superior verbal and reading abilities of teenage girls the equivalent of six months extra schooling. One half year’s education goes a long way towards explaining many wage gaps by gender,ethnicity in race. This six-month edge in schooling is a serious advantage when qualifying for university.
Young women choose to not pursue science, engineering and IT careers because there are other career options that allow them to use their superior verbal and reading abilities – other careers is that allow them to be more successful in life than being a scientist, an engineer or an IT geek. As the Association for Psychological Science explains in the same press release cited above:
Our study shows that it’s not lack of ability or differences in ability that orients females to pursue non-STEM careers, it’s the greater likelihood that females with high math ability also have high verbal ability,” notes Wang. “Because they’re good at both, they can consider a wide range of occupations.
To put it bluntly, science, engineering and IT degrees are for young people who lack the verbal and reading abilities to get into medicine and law. Science, engineering and IT good degrees are for those who can’t get into medicine and law. They could have been contenders if they were more articulate and well-read.
There is a gender disparity in science, engineering and IT because teenage girls find these degrees to be inferior choices – inferior choices given the set of abilities they have when considering their career options.
Solomon Polachek was minding his own business back in 1975 looking for evidence to show occupational crowding and that women were pushed into low paid occupations by sex discrimination, and in particular, employer discrimination. About 60 per cent of women still work in just 10 occupations. the occupations which are female-dominated are often relatively poorly paid jobs
By chance, Polachek departed from the usual empirical strategy for estimating the male-female wage gap at that time.
Rather than include a dummy variable to estimate discrimination after various factors have been taken into account, he introduced dummy variables that took account of both gender and marital status. His results were startling.
He previously was able to explain about 35% of the wage gap using the data at hand and variables he was using.
This 35% gap dropped to 18% for single never married males and females, but his ability to explain the gender wage gap increased dramatically to over 60% for married spouse present males and females.
What more, the presence of children exacerbated the gender wage gap. Each child of less than 12 years old widened the female male pay disparity by 10%. Furthermore, large spacing intervals between children widened this gender wage disparity even further.
Subsequent research showed that marital status had the same effects on gender wage gaps in Germany, the UK, Austria, Switzerland, Sweden, Norway and Australia. Factors associated with dropping out of the labour market to care for children could explain up to 93% of the gender wage gap.
These findings are devastating to the notion that there is some sort of discrimination against women on the demand side of the labour market. As Polachek explains:
The gender wage gap for never marrieds is a mere 2.8%, compared with over 20% for marrieds. The gender wage gap for young workers is less than 5%, but about 25% for 55–64-year-old men and women.
If gender discrimination were the issue, one would need to explain why businesses pay single men and single women comparable salaries. The same applies to young men and young women.
One would need to explain why businesses discriminate against older women, but not against younger women. If corporations discriminate by gender, why are these employers paying any groups of men and women roughly equal pay?
Why is there no discrimination against young single women, but large amounts of discrimination against older married women?
… Each type of possible discrimination is inconsistent with negligible wage differences among single and younger employees compared with the large gap among married men and women (especially those with children, and even more so for those who space children widely apart).
The main drivers of the gender wage gap is simply unknown to employers such as whether the would-be recruit or employer is married, their partner is present, how many children they have, how many of these children are under 12, and how many years are there between the births of their children. These are the main drivers of the gender wage gap – all of which are factors totally unknown to employers and of no relevance to them in making a profit.
The drivers of the gender wage gap on the supply side of the labour market regarding the choices women make about having children, when they have children, and how this influences their investment in human capital, and in particular, in human capital that does not depreciate by that much because of intermittent labour force participation due to motherhood.
Occupational crowding hypotheses of the gender wage gap have the drawback of being an invisible hand explanation of social outcomes. Each individual, acting only to best secure her own rights and interests, act in such a way that the unintended outcome of a complex social interaction.
The specific unintended outcome that must arise from millions of choices of people acting in their own interest throughout their lives is occupational segregation.
The market process of the invisible hand has both a filter and and equilibrating mechanism. The filter is profits and loss to exclude through insolvency and bankruptcy those entrepreneurial choices that do not further consumer’s interests. The equilibrating mechanism – the mechanism that tells people which choices they should make – is price signals. Price signals guide individual choices towards the unintended outcome.
Those that argue that women are socialised to make particular choices such as mother were not paying attention to the 20th century and the radical social change over the course of that century, in particular in the role of women. As Gary Becker explains:
… major economic and technological changes frequently trump culture in the sense that they induce enormous changes not only in behaviour but also in beliefs.
A clear illustration of this is the huge effects of technological change and economic development on behaviour and beliefs regarding many aspects of the family.
Attitudes and behaviour regarding family size, marriage and divorce, care of elderly parents, premarital sex, men and women living together and having children without being married, and gays and lesbians have all undergone profound changes during the past 50 years.
Invariably, when countries with very different cultures experienced significant economic growth, women’s education increased greatly, and the number of children in a typical family plummeted from three or more to often much less than two.
Duncan Garner wrote a passionate column yesterday in the local paper calling for gutsy action on child poverty.
His analysis of the causes of child poverty in New Zealand was good. Garner’s solutions had nothing to do with what he had identified as the causes of child poverty. As Garner himself wrote:
… in order to tackle poverty it’s important to attempt to define what it means today.
Poverty is children living in crowded, damp homes who don’t get three square meals a day.
They may not have their own bed, they won’t see a doctor when they’re sick and many of them will be admitted to hospital with serious poverty-related illnesses such as respiratory problems and skin infections.
They may live in households where paying the rent accounts for 60 per cent of the family’s income every week.
Garner then discussed the plight of one particular family in Auckland:
The parents are nice people, with seven children.
They shared a tiny home with three other adults and another child.
Dad works full-time at a meat factory and they had been waiting 10 months for a state house. They had beds in the dining room and lounge.
They couldn’t afford the cost of a private rental home. One son, aged 11, had a serious lung problem. I saw poverty in action that day and it was deeply disturbing. I highlighted their plight on my radio show and within weeks a shamed Housing NZ had found them a home.
The family Garner discussed is in a tiny house because they lacked the income to rent a better one. They must rely on social housing provided by government with income related rents.
Recurring through his problem definition is the impact that rising housing costs is having on the poor.
Nonetheless, Garner then advocates cash payments to low income families, a tax credit system seen as more generous and inclusive, and a back to school bonus without addressing the supply of housing.
The evidence is overwhelming in New Zealand that the main driver of the increases in the child poverty since the 1980s is rising housing costs.
In the longer run after housing costs child poverty rates in 2013 were close to double what they were in the late 1980s mainly because housing costs in 2013 were much higher relative to income than they were in the late 1980s.
– Bryan Perry, 2014 Household Incomes Report – Key Findings. Ministry of Social Development (July 2014).
Any policy to reduce child poverty must increase the supply of houses by reducing regulatory restrictions on the supply of land.
The Metropolitan Limit confines the expansion of Auckland beyond the existing built-up area. This regulatory constraint explains the exceptionally high housing price-income ratio of Auckland.
The limit imposed on the horizontal expansion of the city in green fields encourages increases in residential prices. As demand for new housing increases, no new land supply can enter the market and stem price rises in response to this increased demand.
If you serious about child poverty, you have to criticise government regulation: the dead hand of the Resource Management Act (RMA) on the poor and the vulnerable.
Men are far more likely to choose careers that are more dangerous, so they naturally pay more under the principle of compensating differences. Top 10 most dangerous jobs: Fishers, loggers, aircraft pilots, farmers and ranchers, roofers, iron and steel workers, refuse and recyclable material collectors, industrial machinery installation and repair, truck drivers, construction labourers. They are male-dominated jobs.
Men are far more likely to enter higher-paying fields and occupations (by choice). Men are far more likely to take work in uncomfortable, isolated, and undesirable locations that pay more. Men work longer hours than women do. The average fulltime working man works 6 hours per week or 15 percent longer than the average fulltime working woman.
Women tend to work in fields dominated by women because these fields best satisfy women’s’ dual careers as workers and household managers. This can include less stressful work environments (noise, strenuous activity, etc.), more flexible policies regarding time off, and a number of other factors.
Men work longer hours than women do. The average fulltime working man works 6 hours per week or 15 percent longer than the average fulltime working woman. Even within the same career category, men are more likely to pursue high-stress and higher-paid areas of specialisation.
Women business owners make less than half of what male business owners make, which, since they have no boss, means it’s independent of discrimination. The reason for the disparity is money is the primary motivator for 76% of men versus only 29% of women. Women place a higher premium on shorter work weeks, proximity to home, fulfillment, autonomy, and safety.
Women lean toward jobs with fewer risks, more comfortable conditions, regular hours, more personal fulfillment and greater flexibility. Many women are willing to trade higher pay for other desirable job characteristics.
Men often take on jobs that involve physical labour, outdoor work, overnight shifts and dangerous conditions (which is why men suffer the overwhelming majority of injuries and deaths at the workplace). They choose to put up with unpleasant factors because they can earn more.
This study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action.
Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers.
I wonder who will pay for this? Caregiver wages are funded out of a fixed budget allocated by the government.
A higher wage will change the type of worker that the caregiving sector will seek to recruit, as happened after increases in the teenage went minimum wage.
When the teenage minimum wage went up in New Zealand, employment of 17 and 18-year-olds fell, while the employment of 18 to 19-year-olds increased because the latter were more mature and reliable than the younger contemporaries.
“The Court of Appeal’s decision declining the employers’ appeal in the Kristine Bartlett case is a huge victory for women workers” said Pay Equity Coalition Challenge spokesperson Angela McLeod.
“The Courts’ decision that equal pay may be determined across industries in female-dominated occupations revitalises the Equal Pay Act 1972 and will be a major factor in closing New Zealand’s stubborn 14 percent gender pay gap”.
The judgement by the Court of Appeal upholding the Employment Court decision again validates the work of caregivers and that they are underpaid, she said.
“We commend the Service and Food Workers Union Nga Ringa Tota in taking this case and exposing the underpayment and undervaluation of aged care workers. And the decision is a victory for all the women’s organisations who have never given up fighting for equal pay,”…
Why Evolution is True is a blog written by Jerry Coyne, centered on evolution and biology but also dealing with diverse topics like politics, culture, and cats.
In Hume’s spirit, I will attempt to serve as an ambassador from my world of economics, and help in “finding topics of conversation fit for the entertainment of rational creatures.”
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