Posts tagged with: Income distribution

patricia-arquette-oscars-acceptance-speech-w724During last night’s Oscar ceremony, Best Supporting Actress winner Patricia Arquette used her acceptance speech to rail against unfair pay for women:

To every women who gave birth to every taxpayer and citizen of this nation, we have fought for everybody else’s equal rights. It’s our time … to have wage equality once and for all and equal rights for women in the United States of America.

The wage equality that Arquette is referring to is the gender wage gap—the difference between male and female earnings expressed as a percentage of male earnings. Because she frames the issue as a matter of equal rights, Arquette presumably believes that the problem is caused by intentional discrimination.

The gender wage gap certainly exists, but there is considerable debate about the size of the gap and whether it is caused primary by discrimination or by other factors, such as education and work hours. Much of the confusion is caused by the use of misleading statistics by politically motivated groups. For example, last night the Department of Labor (DOL) posted on their Twitter account:
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pic_giant_020915_SM_Paul-Preaching-Raphael“Christianity undergirded the development of Western liberalism (in the old, good sense of the word),” says Rich Lowry. In fact, without Christianity there would probably not be anything like what we conceive as true liberty:

The indispensable role of Christianity in the creation of individual rights and ultimately of secularism itself is the subject of the revelatory new intellectual history Inventing the Individual by Larry Siedentop. Here’s hoping that President Obama gives it a quick skim before he next takes the podium at a prayer breakfast.

Siedentop begins his story with the ancients. The Greeks and Romans of pre-history weren’t secular; the family was, as Siedentop calls it, a religious cult run by the paterfamilias and suffused with ritual and assumptions of social inequality. We are all pro-family, but we can agree that ancestor worship takes it a little far.

At this time, Siedentop points out, the key distinction wasn’t between the public and private spheres, but between the public and domestic spheres, the latter characterized by the family with its rigidly defined hierarchical roles. There was no space for the individual with his or her own rights.

Read more . . .

unbalanced“The bottom half of the world’s population owns the same as the richest 85 people in the world.”

The stat was quoted last month in a report by the development organization Oxfam, but similar claims have become common. You’ve probably seen this statistic—or one like it—before in articles about economic inequality and assumed they must be somewhat true.

But they aren’t. In reality, they are completely meaningless.

One of the problems is that the comparisons are based on net worth (assets minus liabilities). If you aggregate all the people who have a negative net worth into one category and call them the “bottom half” then you come up with some peculiar conclusions. As Felix Salmon says, “My niece, who just got her first 50 cents in pocket money, has more money than the poorest 2 billion people in the world combined.”
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noun_86179_ccToday at Think Christian I reflect on President Obama’s State of the Union message last night. I think it was perhaps the best speech I have heard him give in terms of delivery and general tone. There are numerous things that one might quibble with in a speech of that length, of course.

My TC piece is an attempt to help us to put into proper perspective political promises and policy proposals. I look particularly at the question of economic inequality and the assumptions underlying the government’s redistributive actions.

As Danielle Kurtzleben puts it, “Obama is making a case that the economy’s distribution engine is broken, and that the recovery simply won’t fix it. His solution is for government to approach redistribution as a positive good rather than a necessary evil.”

coins_ladderOne holdover from 2014 into the new year is the cry for an increase in the minimum wage. President Obama pledged (in a December 2014 speech) to bump the minimum wage up to $9/hour nationally. Many believe that this move will help stimulate the still-sluggish economy.

Michael R. Strain, at  the American Enterprise Institute, isn’t wholly against raising the minimum wage, but he’s not wholeheartedly for it, either. He thinks we are asking the wrong question. Do we need to raise the minimum wage, or do we need to increase employment?

The labor market for young and low-skill workers is in terrible shape. More than 14 percent of workers aged 16–24 are unemployed. The situation is even worse if you look only at teenagers, over 1 in 5 of whom are unemployed. The unemployment rate for high-school dropouts over the age of 24 is 10.8 percent — a two-decade high — and only 4 people out of every 10 in that group have jobs. And there are still a staggering 4.1 million unemployed workers who have been looking for a job for six months or longer, many of whom are young or low-skill. (more…)

o-man-taller-facebookFor most of my life I was, at 5-foot-10, of exactly average height. But in the span of one day in 1989 I became freakishly tall.

While I hadn’t grown an inch upward, I had moved 6,000 miles eastward to Okinawa, Japan. Since the average height of native Okinawans was only 5-foot-2, I towered over most every native islander by 8 inches. It was the equivalent of being 6-foot-6 in the United States.

Unfortunately, when I would leave the towns of Okinawa and step back onto the military base I instantly shrunk back to average height. My height advantage only lasted as long as I got to choose my point of reference.

Where did the truth lie? Was I truly tall or only of average height? The answer was completely dependent on my point of reference. Height, after all, is just a statistical artifact.

While this example may seem silly and rather obvious, it highlights how we our choice of what is a relevant standard of comparison can shape our thinking on important matters of economic policy. Take, for instance, the issue of poverty and income inequality. As Robert Higgs explains,
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lego-people“Can you explain that important economic concept using Legos?”

Apparently, someone must have said that to Richard Reeves, an economist at the Brookings Institution economist, because he’s made a brief video using Legos to visualize social mobility.

There are two reasons I really appreciate this video. First, I love to see important economic issues explained in an accessible and entertaining manner. Second, as I’ve repeatedly said to anyone who will listen, social mobility — specifically getting people out of poverty — is infinitely more important than focusing income inequality, a topic that gets far too much attention nowadays.

The one drawback to the video is that it’s far too pessimistic. Yes, social mobility is still a huge problem. But the video makes clear, that social mobility is possible for almost all people. That has not been true for most of human history and it is not true in most parts of the world today.

Also, I am far less concerned with whether a person can go from the bottom quintile to the top as I am with going from the bottom quintile to the middle. Like many Americans, I was born in the bottom quintile and worked my way to the middle quintiles. The fact that I’m unlikely to ever join the top quintile is of absolutely no importance to may life. None at all. What we should care about is whether people can get out of poverty and flourish economically, not whether they can join Beyonce and Jay-Z in the billionaire’s club.

But those quibbles aside, I’m grateful this video is helping to spread the message about the importance of social mobility.