21 Nov 2015
by Jim Rose
in applied price theory, applied welfare economics, entrepreneurship, industrial organisation, labour economics, minimum wage, politics - New Zealand, poverty and inequality, survivor principle
Tags: British economy, living wage
A brilliant point by @FlipChartRick in the reblog. What sort of single year labour productivity increase is required to cover a UK living wage increase. Basic arithmetic kills.
A 6.6% annual productivity growth would be required to fund a living wage. This will be far above trend and would be required in sectors such as services that are not at all known for rapid productivity growth because of Baumol’s disease.
A subsequent Twitter exchange updated a key chart to include Australia and New Zealand.
Flip Chart Fairy Tales
The CIPD and the Resolution Foundation are collaborating on a piece of research into the impact of the National Living Wage (NLW). According to their first study over half of the country’s employers expect to be affected by it. Around a third said they would meet the increased cost by improving productivity and 22 percent said they would take lower profits. Only 15 percent said they would lay off workers or slow down recruitment.
That all sounds promising but, as Matt Whittaker points out, the productivity increase needed to cover the cost of the NLW could be pretty steep. As you might expect, there is a strong relationship between rising minimum wages and rising productivity. Most countries in the OECD have not strayed very far from this line of best fit.
In the absence of any productivity growth, the proposed NLW would move some way from the line (the green circle) by 2016 and…
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18 Nov 2015
by Jim Rose
in applied price theory, Austrian economics, entrepreneurship, human capital, industrial organisation, labour economics, labour supply, Milton Friedman, minimum wage, occupational choice, poverty and inequality, survivor principle, unions
Tags: market process, The meaning of competition
14 Nov 2015
by Jim Rose
in labour economics, minimum wage, politics - Australia, politics - New Zealand, politics - USA, poverty and inequality
Tags: child poverty, family poverty, family tax credits, in-work tax credits, social insurance, welfare state
10 Nov 2015
by Jim Rose
in applied price theory, applied welfare economics, economic history, entrepreneurship, health and safety, human capital, industrial organisation, labour economics, labour supply, Marxist economics, minimum wage, politics - Australia, politics - New Zealand, politics - USA, poverty and inequality, unions
Tags: The Great Enrichment, union power, union wage premium
03 Nov 2015
by Jim Rose
in applied price theory, applied welfare economics, economic history, entrepreneurship, industrial organisation, labour economics, labour supply, Milton Friedman, poverty and inequality, Public Choice, rentseeking, unions
Tags: Canada, entrepreneurial alertness, France, Italy, top 1%, union power, union wage premium
The French ruling class is as lazy as their transnational co-conspirators down under. French union membership is in serious decline albeit from a low base. An opportunity lost for the French ruling class. It has not lifted a finger to extract additional labour surplus from the downtrodden French proletariat now stripped of their only line of collective defence against capitalist exploitation.
Source: OECD Stat and Top Incomes Database.
The top 10% and top 1% in France are no better off than two generations ago despite the decline of French unions. The French Left must be most disappointed. No kicking in the rotten door of the permanent revolution anytime soon after the immiserised French proletariat rises up because it has nothing to lose but its chains. The 21st century version of the Marxist call to the barricades would be a proletariat stirred to revolution with nothing to lose but their suburban home, motorcar, IPad and air points
Source: OECD Stat and Top Incomes Database.
The Italian ruling class has had little success in bringing Italian unions down. The top 10% in Italy is earning no more now than back when the Red Brigades were gunning for them.
Source: OECD Stat and Top Incomes Database.
The top 1% in Italy is doing a little bit better than when the Red Brigade was gunning for them, but not much more. Unions don’t figure in explaining that small rise in Italian top 1% incomes over the last 40 years. Italian unions are pretty much a strong as they were 40 years ago in membership. Italian employment protection laws are pretty much as strong as they used to be too.
Source: OECD Stat and Top Incomes Database.
The Canadian ruling classes even more incompetent than their transnational co-conspirators over in Italy. There appears to have been next to no decline in union membership in Canada. The Canadian top 10% is not earning any more than back in the 60s.
Source: OECD Stat and Top Incomes Database.
The Canadian top 1% is doing a little bit better than 25 years ago also but not off the back of unions which are almost as strong as in the past. The Canadian Left will have to look for a different hypothesis than the ravages of the top 1%.
Source: OECD Stat and Top Incomes Database.
All in all, the Economic Policy Institute simply got lucky with a spurious correlation between top incomes and union membership in the USA.
03 Nov 2015
by Jim Rose
in applied welfare economics, economic growth, economic history, macroeconomics, poverty and inequality
Tags: British economy, British politics, Margaret Thatcher, Tony Blair
The British disease and the horrors of Thatchernomics past British retirees by as did pretty much the Global Financial Crisis. Slow and steady as she goes under every Prime Minister since 1977 has been year in year out result for the real disposable median incomes of British retired households. Despite it all, British retiree household incomes increased by 170% since the winter of discontent. The fastest growth in retiree incomes was under Tony Blair.
Source: Release Edition Reference Tables – ONS.
Notes:
1 Households are ranked by their equivalised disposable incomes, using the modified-OECD scale.
2 1994/95 represents the financial year ending 1995, and similarly through to 2014/15, which represents the financial year ending 2015.
3 Income figures have been deflated to 2014/15 prices using an implied deflator for the household sector.
It has been a much rockier ride for British households yet to retire. Once again, the only time a sustained real income increases for non-retired households was under Thatcher and Blair. Despite it all, household real incomes have doubled since the winter of discontent. The majority of that doubling was under the dead hand of Tony Blair. British Labour now spends a considerable amount of time repudiating that time of unusually rapid household income growth across all of British society.
Source: Release Edition Reference Tables – ONS.
Notes:
1 Households are ranked by their equivalised disposable incomes, using the modified-OECD scale.
2 1994/95 represents the financial year ending 1995, and similarly through to 2014/15, which represents the financial year ending 2015.
3 Income figures have been deflated to 2014/15 prices using an implied deflator for the household sector.
23 Oct 2015
by Jim Rose
in development economics, economic history, growth disasters, growth miracles, Marxist economics, poverty and inequality
Tags: extreme poverty, global poverty, Leftover Left, life expectancies, The Great Escape, The Great Fact, Twitter left
Source: Poverty goals? No, it’s extreme wealth we should be targeting | Zoe Williams | Comment is free | The Guardian
When Zoe Williams was born in 1973, 60% of humanity lived in extreme poverty. That has dropped to 1 in 10.
Just the other day, the World Bank estimated that extreme poverty has dropped below 10% of the world’s population for the first time in human history but some are still grumbling.
Zoe Williams is not grumbling about the failed states and predatory government responsible for the last pockets of extreme poverty, but about the inequality from economic progress under capitalism.
Zoe Williams honestly believes that extreme poverty could have been reduced faster if we had taken on the socialist road.
China and India escaped from extreme poverty by rejecting socialism.
China and India received next to no overseas development assistance in their Great Escape from extreme poverty.
There’s been some clear-cut natural experiments such as between Chile and Venezuela and Japan, Hong Kong, Singapore and just about any other developing country in terms of capitalism as the only path to prosperity.
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