Posts Tagged ‘equality’

Harriet Harperson and the Half-Blood Prince

Sunday, August 2nd, 2009

Having kicked out [most of] the hereditary peers, castrated the historic office of Lord Chancellor and established an ersatz  ”Supreme Court”, Labour wants to tinker with the Constitution again – only this time not out of a long-held and irrational fear of the nobility, but merely so that Lord Mandelson can return to the Commons. (BBC News)

The problem with this is twofold. Firstly, it demonstrates Labour’s willingness to fiddle about with what is meant to be an ancient and solid constitution. Perhaps more worringly, this isn’t just a superficial alteration; rather, it means that Labour is quite prepared to change the rules of the game once it becomes clear that they’re going to lose. Secondly, the concept of politicians hopping between the two houses as it suits them undermines the bicemeral system completely – why have an upper chamber if it’s nothing but a holding-space for politicians who saw fit to leave domestic politics and now want to have a second bite at the apple?

 

Harriet Harperson is, herself, oblivious to the lovely “British” ideals of equality before the law – her inappropriately named “equalities” bill literally and explicitly gives employers the right to discriminate based on sex. Furthermore, she’s now decided that even the Constitution of the Labour Party is below her own personal ambitions, declaring that men are incapable of running the government on their own and suggesting that one (or both) of the Leader and Deputy Leader of the Party must be female (Times). Unusually concise, John Prescott asks, “Why take away from the party the right to choose its leaders on the basis of ability?” – it seems that the concepts of meritocracy and fairness are beyond Ms Harperson.

Apparently, she spoke to senior Party officials about her plans and was immediately told to sling her hook. It is, clearly, a very overt and overambitious ploy to establish herself as leader of the Labour Party. Perhaps this is her response to Blairite-mediated attempts to bring Mandy back to the Commons; there is, it seems, an open feud between the two of them (Telegraph).

Personally, I’d much prefer Peter Mandelson in number ten, simply because he is the lesser of two evils. Indeed, he could even prove to be a disasterous spanner in the works of the Conservative Party Machine.

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Posted in Politics by Callum Wood | 5 Comments »

The Gender Pay Gap

Thursday, November 13th, 2008

I have an article in this week’s TCS, “No longer any need to mind the gap”. Here’s the complete version:

Women earn approximately 17.2% per hour less than men, on average. The Fawcett Society’s “No Pay Day” claims that this means, from October 30th, all women are working for free. A speaker in a recent Union debate said that “women earn £569 per month less than men”, and that there is probably a pay gap at the University because more bedders are women and more professors are men. Well, yes.

The 1970 Equal Pay Act says that two workers doing the same jobs to the same standard should get paid the same. This is sensible. So why, forty years later, does the pay gap still exist? Is the remaining gap really the result of sexism?

I used to believe it was. But it turns out that if you control for things like part-time work, and men and women being more likely to do different jobs, the gap disappears.

For example, some jobs done more by men have disadvantages that are reflected by higher pay. Men are more likely to work outside in all weathers and work unsocial hours. “Women’s jobs” are less risky in two ways: men are much more likely to be made redundant, and suffer much higher rates of industrial injury. Women have shorter commuting times to work, and take more time off. Women report greater job satisfaction than men.

More women work part-time than men. It costs more to train two workers than one, so part-time workers cost an employer more per hour than full-time, and this is reflected in lower hourly pay. This shows up in the overall pay gap, but doesn’t indicate sexism.

More women than men do certain jobs, and vice versa. This is the result of different average preferences. For example, 36% of male managers work more than 48 hours a week, but only 18% of female managers do. Women with careers are 4.5 times more likely than men to say they preferred to work fewer than 40 hours per week. In one study, men tended to place more importance on “being successful in my line of work” and “inventing or creating something that will have an impact”, while women tended to place more importance “having strong friendships”, “living close to parents and relatives”, and “having a meaningful spiritual life.” But amongst men and women doing the same jobs, the gap can disappear, or even be negative. Female investment bankers and dieticians, for example, earn significantly more on average than male ones.

In many couples, the female partner often spends more time looking after the children, which would reduce her overall lifetime earnings. That is why there is no pay gap amongst the young. In the UK, the median pay gap between 22 and 29-year olds was less than 1% in 2007. A US government study found the gap between men and childless women between the ages of 27 and 33 was about 2%. Middle-aged women who remain single earn more than middle-aged single men. Lesbians and gays earn more than heterosexuals.

If you look at the figures more closely, you find not only is sexism not necessary to explain anything, but that there are some things which cannot be explained by sexism. On average, Bangladeshi women in the UK earn about 26.8% more than Bangladeshi men, and Black Caribbean women 1.5% more. This hardly indicates sexism.

I’m no apologist for sexism; it’s stupid and inefficient, and sexist employers who don’t hire the best person for the job are losing out themselves. And surely sexism does still exist in the workplace. But too often widespread sexism is inferred from simplistic econometric analysis with no other evidence. And, as I hope I’ve shown, this inference is misguided. A study by economist June O’Neill, former director of the Congressional Budget Office, found that women earn 98% of what men do when controlled for experience, education, and number of years on the job.

I’ve been talking a lot about averages. Of course, many women do jobs which are mostly done by men, and many women get paid more. Really, there is now so much variation in the lifestyles and economic behaviour of men and women that simple comparisons of average male and female pay etc are increasingly irrelevant.

The data do not indicate sexism, and those who claim they do are guilty of “cherry picking” data (a scientific cardinal sin), not comparing like with like, and selective reporting of the facts. They focus on the “headline” figure and don’t look any further.

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Posted in Politics by Hugo Hadlow | No Comments »

Radically reforming welfare, part 1

Saturday, October 18th, 2008

In this article I consider a “madcap scheme”.

The “Poverty Trap” (also known as the “unemployment trap” or the “welfare trap”) means any situation where the costs of moving into work are greater than the increase in income, caused by means-tested benefits.

A very simplistic example would be where the government gave £5,000 to everyone with a salary below £10,000. Someone with a salary of £9,999 would receive an additional £5,000 from the government, bringing their total income to £14,999. Imagine such a person was offered a better job or position, requiring slightly longer hours, more of their skills, or more responsibility, with a salary increase of £1000. Performing such a job would increase the wealth of society. But the person would not take it. For with a salary of £10,999, they would no longer receive benefits, so their total income would be £10,999. By working more, they would decrease their income by £4,000. So of course, while in an undistorted market they could better themselves by working more, with government distortions they would have no incentive to learn new skills or get a better job.

In practice, welfare payments are distributed by the government according to a much more complicated system. Usually they are not cut off suddenly, but phased out. But means-tested welfare, i.e. welfare that depends on your circumstances, will always mean that the pay increase from working better or longer will be less than it would be in a free market. There will be less incentive to work better or longer. The poverty trap discourages people from getting off welfare and bettering themselves with their own efforts.

In extreme real cases, working can indeed reduce income in absolute terms. Chris Dillow points out:

Our existing system already subsidizes idleness. Some people prefer to stay on benefits because they’d lose these if they went out to work. Take a married couple, both out of work. One’s offered a 16-hour week job at the minimum wage. How much better off are they if they take the job? Not at all – they are about 5% worse off. Table 1.4a of this massive pdf shows.

Sure, I’ve taken an extreme example. But it’s easy to find replacement ratios for part-time jobs of over 70%. For many, then, the financial gains from working are so small that the hassle’s not worth it.

As one commenter on Peter Hitchens’ blog said,

“A safety net is exactly what social security should be – not a way of life. I would suggest, however, that with 5.4 million people languishing on out-of-work benefits, Britain’s welfare system is more ‘comfort blanket’ than ’safety net.’”

The solution is to make benefits non-means-tested. This means giving the same welfare payments to everyone, regardless of their income. Obviously there would be exceptions for the disabled, but for ordinary people, welfare payments should be the same, whether you are unemployed or a millionaire.

That way, working an hour at a job which pays £5/hour, increases your income by £5, instead of by some amount less than £5.

What we should do is replace all social security by giving every adult in the country £5,000, cash, with no conditions. My economics teacher at school suggested this briefly as a “madcap scheme”, but this idea is actually not as mad as it seems. I believe it should gain wide acceptance. It should be acceptable to both the left and the right. For those on the left who really want to help the poor, rather than just increase their dependence on the rulers, it maintains their income but massively simplifies how they get it. It frees them having to spend a lot of time dealing with the state, and allows them to pursue a more fulfilling life doing what they want, without discouraging them from working. For those on the right, it is certainly an improvement, because it removes the disincentive to work that goes with the current welfare system.

This is a Basic Income system, which could be implemented either as a “Citizen’s dividend” or the negative income tax advocated by Milton Friedman.

I was reminded of the Basic Income idea by Charles Murray’s book “In Our Hands”.

Another commenter on Hitchens’ blog described the book thus:

“For anyone who is interested in welfare reform, can I commend the works of Charles Murray. His thesis: the state [despite its good intentions] is inevitably wasteful and inefficient. As well as morally neutral, spawning vast bureaucracies etc.etc. The solution: end all redistributive welfare INCLUDING THE NHS. Cut out government and give the money straight to the people. To receive a monthly sum, people must be: over 21, have a bank account, have a British passport, to get a monthly sum (£10,000 pa) for life. Two rules only: they MUST buy health insurance, and they must invest in a pension plan. After that, they can do whatever they like.

The human urge to do what is best for the self (denied by the left) then comes into play. Because not getting a job, getting married and having babies too young hurts, and the counterpoint pays, people will behave in ways that are constructive, not destructive.”

Chris Dillow surveys some arguments here.

James Bartholomew describes it here:

“His idea, briefly, is this: that the government should give every person US$10,000 a year in place of all welfare benefits, retirement payments and healthcare. Of this, US$3,000 would have to be used to buy health insurance.
…
He said he was not primarily concerned that the welfare state costs too much “though it does”, nor that it tends to make things worse “though it does” but that it “drains” the life out of people – particularly the spiritual life and sense of meaning.
…
He said that if his plan were introduced, behaviour would be affected. There would be ‘feedback loops’. I think he implied that a girl would be less inclined to get pregnant out of wedlock if she knew she would get no extra money from the government. She would also be able to get money from the father because his regular money from the government would be paid to a known bank account and money could be taken from it. This would, Murray suggested, affect his behaviour, too. He would be more cautious about making women pregnant.
…
I am struck first of all by how he admitted that this was a compromise. He said he was making an offer to the Left. They would be allowed to keep big spending – since his plan would continue big state spending. But it would be in a different form that would curtail many of the bad effects of state welfare.

Many times I have been asked, when giving talks about my book, ’so what is the answer?’ I have always felt it is impossible to give a satisfactory answer. The ideal solution – minimal state welfare – would probably not be politically acceptable in a democracy. But reforms that would be politically acceptable would probably not be radical enough to make a ‘good society’.”

As Sean Gabb says,

“Something we should leave substantially alone is the welfare state. The main assumption behind which the present ruling class justifies its looting of the taxpayers is that any cuts in public spending must fall on the welfare budget.

Of course, it is a false assumption, but it does not help that libertarians have always made a great noise about the corrupting effects of state welfare, and that libertarian schemes of improvement always give prominence to privatising or abolishing it. This shows a failure of political understanding.

All else aside, it would be madness to give the now displaced ruling class an issue on which it might claw its way back from oblivion. It may be regrettable, but most people in England like welfare. They like the thought that if they lose their jobs, they will receive some basic support, and that if they fall ill, they will receive treatment free at the point of use. That is what is wanted, and that is what a government of reaction must continue providing.”

I disagree with Murray about health insurance. Instead I would pay some of the money into Personal Health Accounts, as described by Hannan and Carswell in “The Plan”, because these also increase the incentive to use the money wisely.

All other social security would be ended, including the minimum wage, council housing and the NHS. Hannan and Carswell explain how the transition could be made from the NHS to private healthcare. There would be no difference in income for those living in places like London where living costs are higher. As one commenter on Chris Dillow’s blog said, “If I live in an expensive area and lose my job, and can’t find a new one, I will have to move somewhere cheap. Why is it beyond the pale for an unemployed CBI-only person living in London to consider moving himself to a cheaper town or city?” Another replied sarcastically, “it is universally recognised as an affront to civilisation and all we hold dear to suggest that someone who isn’t inclined to should leave London.”

There would be no child benefit. This would remove the incentive to have children, and indeed would give an incentive not to have children. Removing child benefit normally seems harsh because it penalises the child for the decision of the parent – a child does not choose to be born. But in this case it would be okay because the family would still be guaranteed enough income to live on.

The commenter on Hitchens’ blog said,

“I asked George Osbourne about the theories of Murray. His reply: I had lunch with him last week! But there are things I don’t believe in. Translation [to me]: I don’t possess the necessary size of testicles to do it.”

Tomorrow, I’ll be considering “tradable citizenship”.

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Posted in Politics by Hugo Hadlow | 2 Comments »

Good and irrelevant discrimination

Friday, September 12th, 2008

“It especially annoys me when racists are accused of ‘discrimination.’ The ability to discriminate is a precious facility; by judging all members of one ‘race’ to be the same, the racist precisely shows himself incapable of discrimination.”

Attributed to Christopher Hitchens

“Discrimination” is condemned widely nowadays, but usually not understood. Without committing the etymological fallacy, the word “discrimination” comes from the Latin “discriminare”, meaning “to divide”, which comes from “discernere”, to discern. Someone who can discriminate is someone who can tell the difference between things or people, and treat different things or people differently. We discriminate all the time: it’s part of ordinary life. Clearly, some (most) discrimination is good.

In the case of universities, an admissions tutor who admits the most intelligent or promising students is discriminating between candidates: namely, the good-enough candidates and the not-good-enough candidates. This discrimination is good because it is relevant. If we failed in our duty to discriminate between candidates, given the limited supply of places at Cambridge University, we would end up admitting worse candidates at the expense of better ones.

If, on the other hand, admissions tutors were to be influenced by irrelevant factors, such as race or background, and discriminate on those grounds, we would also end up admitting sub-par candidates.

Too often, people criticise “discrimination” when they really should be criticising “irrelevant discrimination”. Discriminating on irrelevant grounds creates sub-optimal outcomes, but failing to discriminate on relevant grounds also creates sub-optimal outcomes. We have a duty not to discriminate on irrelevant grounds, but we also have a duty to discriminate on relevant grounds. Sloppiness with language prevents useful debate on this issue from taking place.

I was pleased, therefore, to read that Vice-Chancellor Alison Richard has condemned attempts by the government to encourage universities to recruit more pupils from state schools.

Obviously admissions tutors should only take into account a candidate’s ability. There is no such thing as “positive [irrelevant] discrimination”: any irrelevant discrimination is bad.

As Thomas Sowell has pointed out, “You are not doing anybody a favor by sending them where they are more likely to fail, rather than where they are more likely to succeed.”

In the case of “affirmative action” in the US, “where the racial preferences in admissions are not as great, the differences in graduation rates are not as great. The critics of affirmative action were right: Racial preferences reduce the prospects of black students graduating.”

Discriminating on the grounds of race is irrelevant discrimination and reduces efficiency and overall welfare. Discriminating on the grounds of what school someone went to is also irrelevant discrimination and will have the same effect, ultimately hurting those it is intended to help.

41% of the students at Cambridge went to private school, but private schools educate only 7% of the pupils in the country. Why do so many more (proportionally) private school pupils get into Cambridge?

One explanation would be discrimination in their favour. However, there is no evidence for this1. Laudably, the copies of our UCAS forms that are given to admissions tutors do not mention which schools we went to. There is no reason to believe that Cambridge admissions tutors do not simply admit whichever candidates seem the best.

This leads us to the conclusion that private schooled pupils are better, on average. This may be because the pupils were better in the first place, because private schools are selective. Or it may be because private schools make their pupils better, through better teaching. It is probably a bit of both.

We can fix both problems by closing state-run schools, and making paying for education through a voucher system the state’s only involvement. That way, the market can improve the schools, something the government cannot do, but everyone would still be able to go to school regardless of their income.

The government are putting pressure on universities because they do not want to admit the real cause of state-schooled-pupil under-achievement: government involvement in education.

“A spokesman for the Department for Innovation, Universities and Skills insisted that any measures to encourage widening participation at universities were voluntary. ‘We value the independence of universities, but we also want to get the best students into the best courses,’ he said.”

Note the implication that universities are using their “independence” to discriminate against the “best students”, without any evidence to back it up. On the contrary, universities are using their independence to admit the best students, and it is the government that wants them to apply other criteria. And voluntary measures are merely a prelude to non-voluntary ones, of course. There is a chilling effect here, because universities are likely to do what they know the government wants, even without it asking, in an attempt to forestall more government meddling, since the government provides the money. As another vice-chancellor said: “The Government gives me a cheque every year. I have a public duty to do what the Government says.”

I applaud Cambridge University’s long-term project to become financially independent of the government, so that it can pay for the education of the best pupils, regardless of their financial background, without being subject to government meddling.

—

1. There is a tendency to assume that disparity in figures automatically implies bad discrimination. Both of the poisonous candidates for the CUSU Women’s Sabbatical Officer mentioned that more men than women studied maths at Cambridge, and of those, proportionally more achieved firsts. They ignorantly assumed this was caused by irrelevant discrimination. Of course, it is actually due to the fact that maths geniuses are more likely to be men. While men and women have the same average ability at maths, variance is higher in men, so there are more male maths geniuses and male maths morons. This is explained by Charles Murray in “The Inequality Taboo”. The following diagram (not to scale) shows this intuitively:

See also http://clubtroppo.com.au/2008/04/06/inequality-how-much-is-too-much/

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Posted in Photographs, Politics by Hugo Hadlow | 14 Comments »

Equality kills

Sunday, June 1st, 2008

Equality is not a good thing. It’s not a bad thing either. It’s morally neutral. Less inequality is not a good thing, and neither is more inequality.

For example: The reason living standards are better than they have ever been before is the creation of wealth. What will improve people’s lives most in the future is the creation of more wealth. Inequality doesn’t matter: if someone’s real income doubles over ten years, it just doesn’t matter if someone else’s income quadruples. Except, of course, in the extremely unusual case of the second person’s income quadrupling hindering the growth of the first person’s income. The opposite is much more likely to be the case.

We should also be wary of redistributing wealth, because while it will cause a short-term increase in the incomes of the less-well-off, it will reduce long-term increase.

As Andrew Perraut says,

“if markets are as massively productive as we libertarians believe and compounding returns to growth in the long term are taken into account, you could probably justify no more than very basic safety nets, for fear of distorting the economy and dramatically lowering everyone’s goods in the future.”

So equality may not be a bad thing, but promoting equality is a bad thing for two reasons. Here’s a third: promoting equality kills. The promotion of equality, for no other reason than ideology, is leading directly to many deaths.

I’m talking about the NHS, and the cases of Colette Mills and Linda O’Boyle.

Both were suffering from cancer. The NHS does not have enough money to pay for certain extra drugs. The patients wanted to pay for the extra drugs themselves, but were told that if they did, they would have to pay for their entire treatment: any treatment they were currently receiving for free would be withdrawn. The patients could afford the extra drugs if they continued to receive the treatment they were already getting for free. But they couldn’t afford the whole lot.

The Department of Health said: “Co-payments would risk creating a two-tier health service and be in direct contravention with the principles and values of the NHS.”

Yes, it would. Rather, there is already a two-tier health service in this country. There is the NHS, and there is (better) private healthcare. (It must be better, otherwise people wouldn’t pay for it.) Private healthcare still exists, even though the Labour Party would like to ban it. (They can’t afford to, of course, because patients going private save the NHS money).

Yes, patients paying for extra treatment would promote the private sector. This would be a good thing. It wouldn’t harm anyone who couldn’t afford to. Indeed, it would help the NHS, because even people who don’t go completely private might start increasing the use they make of the private sector, thus saving the NHS money and allowing it to spend it on those who need it more.

The problem is the people who think that inequality is always at someone’s expense. It isn’t, as these cases show.

The “principles and values” of the NHS are clearly stupid, and lead to entirely preventable deaths.

“It wasn’t going to cost them. I was going to pay for it. How can they say this policy is far more important than somebody’s life?”

Will the Conservatives fix this?

David Cameron, the Conservative leader, said in a statement that it was “tempting” to allow patients to pay for extra cancer treatments that were not funded by the NHS.

The party has been reluctant to express an opinion on the issue, fearing that it could be portrayed as favouring middle-class patients who can afford to buy themselves extra treatment.

I guess not, then.

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Posted in Politics by Hugo Hadlow | 4 Comments »