Fact checking @Bernie Sanders latest presidential debate
27 Nov 2015 Leave a comment
in applied price theory, applied welfare economics, economic growth, labour economics, politics - USA, poverty and inequality, welfare reform Tags: 2016 presidential election, Leftover Left, Twitter left
How @IainLG @suemoroney @NZPSA argued against zero-hours contract regulation when arguing for a ban
12 Nov 2015 Leave a comment
in job search and matching, labour economics, labour supply, personnel economics, politics - New Zealand, unemployment, welfare reform
I stayed on after my Parliamentary testimony this morning to listen to others. A dozen or more made submissions arguing for more regulation – usually asking that zero hours contracts be outlawed.
I was the only submitter so far who argued against any regulation of zero hours contracts. I was thanked for putting a different perspective at the end of my submission. All members of the committee were very polite and listen to what I had to say.
Inadvertently, of course, Iain Lees-Galloway and Sue Moroney of the Labour Party and several members of the Public Service Association unearthed telling points against the case for regulation of zero hours contracts in the course of the morning in both the submissions and through the Q&A.
The first member of the Public Service Association to present information against zero hours contracts was a home support worker who was a union organiser.
This Public Service Association union organiser said, among many points in a kitchen sink submission, that zero hour contracts would deter people from entering her industry. That’s my point about zero hours contracts:
- Zero hours contracts are a risk to employers when recruiting unless they are packaged within an attractive job offer; and
- Offering a zero hours contracts will deter applicants from accepting a job offer unless there is some compensating factor in that offer.
A second member of the Public Service Association talked about her daughter who was on a zero hours contract in her first job. After a seven-month spell of unemployment, her daughter worked as many shifts as possible to show she was a valued member of her team. Good for her. In low skilled jobs, what employers look for is someone who is friendly and reliable.
Part of that story was about the difficulties of her daughter with the correct payment of her unemployment benefit. Every Friday she has to telephone WINZ to forecast how many hours she expected to work in the following week so her unemployment benefit is correctly calculated for the following paid day.

From time to time, the submitter’s daughter was called in at the last minute for a shift on her zero hours contract at the weekend so that estimate of the previous day is incorrect and she is overpaid on her benefit.
This retention of unemployment benefit eligibility is a key point against the arguments raised by Iain Lee-Galloway about how workers and, in particular, the unemployed have no option but to accept zero hours contracts. Galloway was correct in making this the crux of the matter.
He can he kept stressing the inequality of bargaining power and a lack of options of job applicants when questioning me at the hearings this morning.
It was Iain Lees-Galloway who set up this bargaining power inequality as a crucial argument against zero hours contracts, not me. Zero hours contracts are said by the Labour Party and the unions to be a bad deal. It’s an offer job seekers cannot refuse, especially if they’re unemployed.
If beneficiaries do have options and they can refuse an offer of a zero hours contract, as 50% of British unemployment beneficiaries do, most arguments for the regulation or prohibition of zero hours contracts fall of the first hurdle.
The submitter’s daughter was still on an unemployment benefit despite taking a zero hours contract. She had options. She had a basic income, the unemployment benefit, so she was never left in the lurch if there was no shift that week. She never earned less than the unemployment benefit weekend and week out and often earned more.
- No one who already has a job would take a zero hours contracts unless they were confident of matching the hours and income they earn now; and
- An unemployment beneficiary keeps the unemployment benefit as a cushion when they accept a zero hours contract unless they earn more than $200 a week.
The unemployment benefit allows beneficiaries to earn up to $200 a week after which benefit is withdrawn at 50 cents per dollar. As the beneficiary is still on the benefit, they have access to those all-important 2nd tier benefits ranging from accommodation allowances to special grants for unexpected urgent expenses.
Zero hours contracts allow the unemployed to make the benefit pay. Simon Chapple pointed out to me a few years ago that part-time work and benefit receipt can be an attractive long-term option for low skilled workers such as single mothers. The unemployment or single-parent beneficiary who works part-time has the certainty of the unemployment benefit plus a couple hundred dollars extra-week from their part-time job while retaining the second tier benefits that guard against unexpected expenses.
Sue Moroney then finished off the case against regulating zero hours contracts when questioning a submitter from the construction industry. The submitter was discussing the generosity of parental leave as well as zero hours contracts.
Sue Moroney pointed out that because of childcare responsibilities, the ability of that industry to attract women is greatly diminished if they offer zero hours contracts. She was pointing out a major cost of zero hours contracts to employers who offer them.
Sue Moroney highlighted the risk to employers of cutting themselves off from a major part of the job applicant pool – mothers of young children. That is a big cost unless employers offering zero hours contracts either pay a wage premium to keep access to that talent or offer these contracts to teenagers and adults, men and women, who circumstances dispose to working variable hours, sometimes working long hours and sometimes not working at all that week.
Zero hours contracts is an issue about job search and job matching. These contracts will benefit some employers and some employees. Other jobseekers will not sign such contracts. Still others will find that after signing a zero hours contract, that was not the best choice for them in retrospect. That form of on-the-job learning about competing job opportunities is common. Young people spend their first 10 to 15 years in the workforce job shopping. They move through half a dozen or more different jobs, employers and even industries before they find a good fit for them and stay on.
All in all, zero hours contracts empower the unemployed. Zero-hours contracts allow the unemployed to try out jobs while keeping their unemployment or single parent benefit. They don’t have to go completely off the benefit then risk a stand-down period of 6 to 12 weeks if they leave a regular job that is unsatisfactory.
Furthermore, the zero hours contracts give them an opportunity sometimes to earn a lot of money in a short period of time was still retaining their benefit eligibility. As another member of the Public Service Association mentioned when your wages balloon because of long hours one week, your benefit is wound back, but they are still on their benefit. They don’t have to reapply and risk of stand-down period
Zero hours contracts expand the options of jobseekers, especially the unemployed. Taking a zero hours contract gives the unemployed the option to test out a job without having to give up their unemployment benefit. They are empowering, not put upon as the Labour Party and the union members argued today.
The reverse gender gap in black education
22 Oct 2015 Leave a comment
in discrimination, economics of education, human capital, labour economics, labour supply, occupational choice, poverty and inequality, welfare reform Tags: reversing gender gap
There were massive reductions in black and Hispanic child poverty rates after 1996 US welfare reforms
18 Oct 2015 Leave a comment
in labour economics, welfare reform Tags: 1996 US welfare reforms
The interesting part of this chart is the white child poverty rate didn’t change much after the US 1996 federal welfare reforms. It was black and Hispanic child poverty rates that dropped by 1/3rd.
How Gov. transfers (more than Federal taxes) reduce inequality cbo.gov/publication/49… http://t.co/3dMObjsykL—
Richard V. Reeves (@RichardvReeves) November 13, 2014
Poverty traps in America
02 Oct 2015 Leave a comment
in applied welfare economics, behavioural economics, labour economics, labour supply, politics - USA, poverty and inequality, public economics, welfare reform Tags: poverty traps, taxation and labour supply, welfare state
Single motherhood and the feminisation of poverty
31 Aug 2015 Leave a comment
in discrimination, economics of love and marriage, gender, labour economics, labour supply, politics - USA, poverty and inequality, welfare reform Tags: asymmetric marriage premium, child poverty, economics and fertility, engines of liberation, family poverty, marriage and divorce, marriage premium, single mothers, single parents
43.1% of single mothers are living in poverty this #MothersDay statusofwomendata.org http://t.co/OgWcmvLnDZ—
IWPR (@IWPResearch) May 10, 2015
The trouble with boys
31 Aug 2015 1 Comment
in applied welfare economics, labour economics, politics - Australia, politics - New Zealand, politics - USA, welfare reform Tags: economics of the family, lost boys, reversing gender gap, single mothers, single parents
The Trouble w Boys: U Chicago study: boys fr non-intact homes esp likely to struggle in school nber.org/papers/w17541 http://t.co/31xyA4BVQH—
W Bradford Wilcox (@WilcoxNMP) June 18, 2015
Did Mass Incarceration Destroy the Black Family?
28 Aug 2015 Leave a comment
in discrimination, economics of crime, economics of love and marriage, labour economics, law and economics, politics - New Zealand, population economics, poverty and inequality, unemployment, urban economics, welfare reform Tags: crime and punishment, criminal deterrence, economics of the family, racial discrimination, single mothers, single parents, teen pregnancies
Did Mass Incarceration Destroy the Black Family? Not exactly. bit.ly/1f8jgXm http://t.co/1q2nKJnU9W—
City Journal (@CityJournal) August 13, 2015
When do rising incomes increase child poverty?
22 Aug 2015 2 Comments
in economic history, labour economics, politics - New Zealand, poverty and inequality, welfare reform Tags: child poverty, family poverty, Leftover Left, measurement error, New Zealand Greens
Summary of the 222 pages of MSD's Household Incomes report: kids are still missing out BIG time. #itsnotchoice http://t.co/4x7dm1O0Wg—
Child Poverty NZ (@povertymonitor) August 13, 2015
AHC = after deducting housing costs
BHC = before deducting housing costs
‘anchored line’:
- this is the line set at a chosen level in a reference year (now 2007), and held fixed in real terms (CPI adjusted)
- the concept of ‘poverty’ here is – have the incomes of low-income households gone up or down in real terms compared with what they were previously?
‘moving line’:
- this is the fully relative line that moves when the median moves (e.g. if median rises, the poverty line rises and reported poverty rates increase even if low incomes stay the same)
- the concept of ‘poverty’ here is – have the incomes of low-income households moved closer or further away from the median?
Bryan Perry, Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2014 – Ministry of Social Development, Wellington (August 2015), p. 133.
Source: Bryan Perry, Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2014 – Ministry of Social Development, Wellington (August 2015), p. 133.
Is child poverty in New Zealand 245,000 children or 305,000 children?
260,000 kids in income poverty, 180,000 in material hardship, 10% in severe poverty, 3in5 in poverty for a long time http://t.co/Oy5cWftvwU—
Child Poverty NZ (@povertymonitor) May 21, 2015
If you base your estimate of child poverty on the 60% of median income after housing costs moving line, which is the number of low income households who moved further away from 60% of median income, a median which increased by 5% last year, the figure is 305,000 children after housing costs. 45,000 children are in households that is not as close to the median as last year but are not necessarily any poorer than last year in terms of money coming into the house.
45k more children in #poverty this year than last, that’s 305k Kiwi kids without life's basics. C'mon @johnkeypm! http://t.co/K8zeQpgA79—
UNICEF New Zealand (@UNICEFNZ) August 13, 2015
If you base your estimate on the anchored line, which is the number of low income households whose income has gone up on down compared to what they were on previously,the number of children in poverty has increased from 235,000 to 245,000 after housing costs. About 10,000 children are poorer than last year – poorer enough than last year to be classified as in poverty.



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