via Why Middle-Class Americans Can’t Afford to Live in Liberal Cities – The Atlantic.
Why Middle-Class Americans Can’t Afford to Live in Liberal Cities – The Atlantic
07 Nov 2014 Leave a comment
in applied welfare economics, economics of regulation, environmental economics, income redistribution, Public Choice, rentseeking, urban economics Tags: Director's Law, green rent seeking, land use regulation, zoning
Down and Out in America: only 82% of households below the poverty line have air conditioning!
05 Nov 2014 Leave a comment
in applied welfare economics, income redistribution, politics - USA
- Air conditioning equipment is more common in single family homes (89%) than in housing units in apartment buildings (82%).
- 18 percent of households below the poverty line do not have any air conditioning equipment at all.
- About a third of households below the poverty line use room air conditioning compared to 15% of households with an income above $100,000.
- In contrast, about 75% of households with incomes above $100,000 use central air conditioning compared to just 44% of households below the poverty line.
Coalition Celebrating Equal Pay Case Outcome
29 Oct 2014 Leave a comment
in applied price theory, applied welfare economics, economics of regulation, gender, income redistribution, minimum wage, politics - New Zealand, rentseeking Tags: gender wage gap, living wage, minimum wage, pay equity
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.
Media release: Pay Equity Challenge Coalition
28 October 2014
Coalition Celebrating Equal Pay Case Outcome
“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,”…
View original post 92 more words
The fire of truth: the relationship between inequality and economic prosperity in New Zealand since the 1970s
29 Oct 2014 Leave a comment
in economic growth, economics of regulation, income redistribution, politics - New Zealand, rentseeking Tags: Auckland urban limit, economic growth, Gini coefficient, green rent seeking, poverty and inequality, Resource Management Act
Figure 1: Before Housing Costs Gini coefficient, New Zealand, 1982 – 2013
closertogether.org.nz/nzs-income-inequality-problem claims that NZ income inequality increased very rapidly in the late 1980s and 1990s — faster than in any other wealthy country.
Figure 2 shows that this rapid rise in inequality coincided with the resumption of economic growth after two lost decades: next to no increase in real GDP per working age New Zealander from 1974 to 1992.
Figure 2: Real GDP per New Zealander and Australian aged 15-64, converted to 2013 price level with updated 2005 EKS purchasing power parities, 1956-2012
Source: Source: Computed from OECD Stat Extract and The Conference Board, Total Database, January 2014, http://www.conference-board.org/economics
Perry (2014) found that:
- Income inequality in New Zealand is at a similar level to Australia, Canada, Italy and Japan (Ginis of 32-33) and a little lower than the UK (34). Countries such as Denmark, Norway, Finland and Belgium have lower than average inequality (Ginis of 25-26). The US and Israel have higher scores of 39.
- The top 1% in New Zealand received around 8% of all taxable income in 2010 and 2011 (before tax), similar to Norway, Finland and Australia, lower than Ireland and Switzerland (11%) and much lower than the UK and Canada (13%) and the US (18%).
- The trend for the New Zealand share has been steady at around 8-9% since the mid 1990s, with perhaps a slight fall in the last few years. Many OECD countries saw small rises in the period, and in the USA the top 1% share continued to rise strongly, from 13% to 19%.
Perry (2014) concluded that:
Overall, there is no evidence of any sustained rise or fall in inequality in the last two decades. The level of household disposable income inequality in New Zealand is a little above the OECD median. The share of total income received by the top 1% of individuals is at the low end of the OECD rankings.
This remark by Parry that there is no evidence of any sustained rise or fall in inequality in New Zealand in the last 20 years is very much at odds with the claim of Closer Together New Zealand that income inequality inequality increased rapidly in the late 1980s and 1990s.
The increase in inequality in New Zealand was in the late 1980s and early 1990s. In the early 1990s, a long economic boom started that lasted until the global financial crisis.
Figure 3 : Income Inequality in New Zealand as Assessed by the Gini Coefficient
Source: Perry 2014 derived from Statistics NZ Household Economic Survey (HES) 1982–2012.
Figure 4: Income Inequality in New Zealand as Assessed by the P80/P20 Ratio
Source: Perry 2014 derived from Statistics NZ Household Economic Survey (HES) 1982–2012.
Figures 3 and 4 both show that after housing costs inequality in New Zealand is higher, but has been pretty stable for 20 years as measured by the Gini coefficient and by the P80/P20 ratio. (When individuals are ranked by equivalised household income and then divided into 100 equal groups, each group is called a percentile. If the ranking starts with the lowest income, then the income at the top of the 20th percentile is denoted P20; the income at the top of the 80th percentile is called P80. The ratio of the value at the top of the 80th percentile to the value at the top of the 20th percentile is called the P80/20 ratio and is often used as a measure of income inequality).
Figure 5: Proportion of HHs with housing cost outgoings to income of greater than 30%, by income quintile
Source: Perry (2014); OTI = outgoings to income
Figure 5 shows that
- for the bottom quintile (Q1), the proportion with high outgoings to income (OTI) steadily reduced from 48% in 1994 to 34% in 2004, as unemployment fell, employment and income rose, and income-related rental policies were introduced in 2000 for those in HNZC houses. From HES 2009 to HES 2013 the proportion rose strongly from 33% to 42%, the highest it has been in the last 25 years except for the peak of 48% in 1994.
- For households with incomes in the second quintile (Q2) there was a strong rise from the 1980s through to the mid 1990s, followed by a relatively flat trend to 2004. Since 2004, the proportion with high OTIs has risen strongly from 27% to 36%.
- For the third quintile (Q3) the proportion with high OTIs settled at around 30% for 2007 to 2013, up from 21% in 2004 and 10% in 1988.
Rising housing costs in New Zealand have one explanation, which is restrictions on the supply of land under the Resource Management Act.
HT: nzchildren.co.nz/income_inequality for figures 3 and 4.
The Top 1% of income earners in NZ are lazy – the Occupy Movement have nothing to protest about – updated
25 Oct 2014 Leave a comment
in applied welfare economics, income redistribution, Marxist economics, politics - New Zealand, rentseeking Tags: lost decades, occupy movement, poverty and inequality, prosperity and depression, top 1%
The NZ top 1% share has been steady at 8-9% since the mid-1990s. The top 1%’s share rose strongly in the USA in recent decades, from 13% in the mid-1980s to 19% in 2012.
Figure 1: Top 1% income shares, USA, New Zealand and Sweden, 1970-2012
Source: The World Top Income Database at http://topincomes.g-mond.parisschoolofeconomics.eu/#Database
The top 1% in New Zealand is so lazy that Sweden is overtaking it – See figure 1.
The Occupy crowd blame everything from the global financial crisis to a bad environment on growing inequality and the top 1%. Such an argument has no foundation in fact in New Zealand.
Income inequality as measured by the Gini coefficient has not risen much in New Zealand for 20 years – See figure 2. How can the poor be getting getting poorer, ground under by the yoke of capitalism, if the rich are not getting richer. The occupy movement should apply for unemployment benefits and seek career guidance.
Figure 2: Gini coefficient New Zealand 1980-2015
![clip_image002[7]](https://utopiayouarestandinginit.com/wp-content/uploads/2014/10/clip_image00271.png "clip_image002[7]")
Source: Bryan Perry, Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2013. Ministry of Social Development (July 2014).
The last major increase in income inequality in New Zealand was in the late 1980s and early 1990s and that was followed by a long economic boom – See figure 3 .
Figure 3: Real GDP per New Zealander and Australian aged 15-64, converted to 2013 price level with updated 2005 EKS purchasing power parities, 1956-2012
Source: Computed from OECD Stat Extract and The Conference Board, Total Database, January 2014, http://www.conference-board.org/economics .
This long boom was after two decades of next to no economic growth in the 1970s and 1980s in New Zealand – see figure 3 . This depression between 1974 and 1992 was New Zealand’s lost decades.
Figure 4 shows that both the lost decades of economic growth in New Zealand and the emergence of the trans-Tasman income gap the seemed to somewhat coincide with the top 1% of earners in Australia increasing their share of income from 6% to 10% of total incomes while the New Zealand top 1% sat on their hands. They are such lazy devils.
Figure 4: Top 1% income shares, USA, New Zealand and Australia, 1970-2012
Source: The World Top Income Database at http://topincomes.g-mond.parisschoolofeconomics.eu/#Database
Piketty on inequality: views of the IGM economic experts
16 Oct 2014 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, discrimination, economic growth, entrepreneurship, gender, human capital, income redistribution, industrial organisation, labour economics, Marxist economics, Rawls and Nozick Tags: Daron Acemoglu, James Robinson, Piketty, poverty and inequality, The Great Enrichment
Question: The most powerful force pushing towards greater wealth inequality in the US since the 1970s is the gap between the after-tax return on capital and the economic growth rate?
Daron Acemoglu and James Robinson have a simple explanation for why Piketty is wrong:
But like Marx, Piketty goes wrong for a very simple reason. The quest for general laws of capitalism or any economic system is misguided because it is a-institutional.
It ignores that it is the institutions and the political equilibrium of a society that determine how technology evolves, how markets function, and how the gains from various different economic arrangements are distributed.
Despite his erudition, ambition, and creativity, Marx was ultimately led astray because of his disregard of institutions and politics. The same is true of Piketty.
Keep your eye on what happens to consumers alert: Murray Rothbard on dumping
01 Oct 2014 Leave a comment
The Key to victory: Run against Piketty-nomics, Scott Sumner | EconLog | Library of Economics and Liberty
23 Sep 2014 Leave a comment
in income redistribution, politics - New Zealand, Public Choice, rentseeking Tags: 2014 New Zealand election, Piketty
This is good news:
New Zealand’s NZX 50 Index increased 1.1 percent, driven higher by power-company stocks, after John Key won a third term as prime minister. Key, a former head of foreign exchange at Merrill Lynch & Co., led his National party to a 48 percent victory in New Zealand’s weekend election, securing the first single-party majority in the South Pacific nation’s parliament since at least 1996. The main opposition Labour Party, which wanted to introduce a tax on capital gains and raise the minimum wage, suffered its worst defeat since 1922.
Perhaps Labour got their ideas from Paul Krugman.
When right-of-center parties are elected, they generally disappoint. Although right-of-center economists favor free markets, most conservative politicians do not. Abe (Japan) and Modi (India) are two recent examples of conservatives who promised reforms and failed to come through (thus far). Fortunately New Zealand is different.
Via http://econlog.econlib.org/archives/2014/09/the_key_to_vict.html
Utopia, you are standing in it! 
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