As we’ve been saying, there isn’t really a gender pay gap

But there is a motherhood pay gap. Interesting research:

Studies from countries with laws against discrimination on the basis of sexual orientation suggest that gay and lesbian employees report more incidents of harassment and are more likely to report experiencing unfair treatment in the labor market than are heterosexual employees. Gay men are found to earn less than comparably skilled and experienced heterosexual men. For lesbians, the patterns are ambiguous: in some countries they have been found to earn less than their heterosexual counterparts, while in others they earn the same or more.

The results for the UK are that gay men earn less than hetero, lesbians more than hetero women. In fact, lesbians earn around what men do and gay men earn around what hetero women do.

We could, as this report does, speculate about societal standards, the idea that lesbian women have, in some manner, “male traits” which lead to that higher pay.

A much simpler observation of the evidence would be the influence of children. We know that fathers earn more than non-fathers among hetero men (yes, even after adjusting for age and education etc). Also that mothers earn less than non-mothers. Gay men tend not to be fathers (this is not being categorical of course, “tend”) as lesbians tend not to be mothers.

If the so-called gender pay gap were simply the influence of children upon earning patterns, as we largely think it is, then we would expect to see what we do see when looking at the earnings of non-hetero society. This does not prove we are correct of course, but it is supportive of our view.

‘Radical’ policy, electoral cycles, protests and term-length

Implementing ‘radical’ policy carries risks. Abolishing marriage law, scrapping the minimum wage or converting a central banking system into one of free banking carries the inherent risk of ‘shocking’ the population, to put it mildly. There are remedial measures that can be taken but rigid electoral conventions and the length of governments’ terms makes their implementation more difficult.

For example, suddenly abolishing the minimum wage would likely cause immediate harm to those on it (or being paid close to it) if it were done in an improper, ‘shocking’ manner – and that’s not even considering the long-term sociological impact of the resulting aversion to ‘free market’ ideas involving ‘liberalisation’ and ‘deregulation’. Putting aside the long-term individual, communal and intergenerational psychological impact of poorly managed liberalisation policies, the immediate harm is mainly caused by the fact that the affected individuals have little time to prepare for it and, therefore, any immediate harm can be mitigated if policy is announced well in advance.

On the 9th December 2010, the House of Commons voted to raise the tuition fees cap. By then, so many students had already applied to university and were due to start in 2011 (though, admittedly, the tuition fee rise would not be effective until 2012) and the students from the year below who had made plans based on previous estimates would feel the brunt of this. One and a half years is hardly enough for those students and their families to make suitable provisions for a 3 or 4-year, full-time course at Uni (which has increasingly become the preserve of the middle-class).

Furthermore, the sense of an impending tuition fee rise no doubt exacerbated the sentiments necessary for a strike. If, instead, they announced their plans at the start of the term but delayed actual implementation until mid-way or late into the term, any protests may actually be smaller since people would have had a longer time to lobby/reason with the government and, indeed, for the policy’s advocates to reason with and persuade the people.

Thus, when planning to implement such policy, an adequately advanced announcement ensures that those affected have time to make provisions and, therefore, significantly diminish any potential, immediate harm caused upon implementation.

The problem, however, is the phenomenon of behavioural changes during electoral cycles; politicians and governments behave differently before and after elections (think promises before and actions after elections as well as populist policies in the run-up to elections) – they want to win elections and, sometimes, expectations-stability when implementing radical policy is sacrificed.

One possible policy suggestion here is to allow the electorate to choose how long they would like the government’s term to be during the elections (by indicating a preferred term-length and then collating the results according to a collated ranking system or weighted average of some sort – of course, selecting the optimal social preference ordering methodology is controversial but that is beyond the scope of this blog post). If the electorate were to opt for a longer term-length, it would be a signal (quite possibly of confidence or of a desire for longer-lasting stability or simply a desire to delay future elections etc.) and this means that otherwise shocking policy can be implemented with less immediate harm. Conversely, shorter term-lengths will ensure that those governments with shaky mandates will be time-constrained in implementing their more extreme policy proposals.

Free movement and discrimination: the case of football

The more you open markets up, the less discrimination you get on grounds of ‘taste’ (racism). The stuff left over is usually ‘statistical‘ (i.e. where certain groups are different in their average levels of job-relevant criteria). There was already a great paper showing this for the Fantasy Premier League (which I play avidly), but now there’s also one for the real Premiership!

Pierre Deschamps and José de Sousa look at the impact of the 1995 Bosman Ruling on the gap between black and white footballer wages in the English league. They find that when only 20 clubs competed for their skills, black players were underpaid relative to white ones, indicating that owners were able to indulge their preference against non-whites (or indulge their fans’ preferences).

But once the whole of Europe were effectively on an equal footing, blacks became highly mobile and garnered equal pay for their efforts:

This paper assesses the impact of labor mobility on racial discrimination. We present an equilibrium search model that reveals an inverted U-shaped relationship between labor mobility and race-based wage differentials. We explore this relationship empirically with an exogenous mobility shock on the European soccer labor market. The Bosman ruling by the European Court of Justice in 1995 lifted restrictions on soccer player mobility.

Using a panel of all clubs in the English first division from 1981 to 2008, we compare the pre- and post-Bosman ruling market to identify the causal effect of intensified mobility on race-based wage differentials. Consistent with a taste-based explanation, we find evidence that increasing labor market mobility decreases racial discrimination.

The figure below shows how the ‘turnover’ (i.e. churn between clubs) of black English players jumped when European markets opened up. Market freedoms; exit; a sort of ‘voting with their feet’, outperformed voice in bringing equality. And we know from ASI research that this did not harm the English national team.

Screen Shot 2014-12-18 at 16.52.50

 

This is in line with a lot of what we have been saying recently—markets are a good way to bring about justice!

Space disco, Kate Bush, and more: the ASI’s best of 2014

Ben:

Song: #####.1 by #####

Album: It’s Album Time by Todd Terje

Musician: The Pizza Underground

Movie: Grand Budapest Hotel, but I’m ashamed to say I only saw five

Book: Pale Fire by Vladimir Nabokov

Restaurant: Rex and Mariano, Soho (runner up The Manor, Clapham)

Favourite article: I Can Tolerate Anything Except the Outgroup, by Scott Alexander

Favourite moment: #Gamergate

Favourite person: Scottish highlander on BBC Question Time

Kate:

Song: Wild Child by Kenny Chesney, with Grace Potter

Album: 1989 by Taylor Swift

Musician: Jason Aldean (for continuing his tradition of writing songs about trucks)

Movie: Magic in the Moonlight

Book: Goodbye, Mr Chips by James Hilton (1939)

Article: Bring Back the Girls – Quietly by Peggy Noonan (WSJ)

Political moment: #Bridgegate

Person: Senator-elect Cory Gardner, CO (I have now forgiven Colorado for their nightmare decision in 2012. Ohio, on the other hand, I am still not speaking to)

Charlotte:

Song: minipops 67 [120.2][source field mix] by Aphex Twin (because it only took 13 years to come out proper)

Album: Rivers of the Red Planet by Max Graef (jazz/hip-hop/house, good background music)

Musician: Kate Bush (the year I got round to listening to her albums)

Movie: Under the Skin (amazingly shot)

Book: Perfume: The Story of a Murderer by Patrick Suskind (one of the few I actually read)

Restaurant: Bone Daddies, Soho (who can’t love a huge bowl of pig fat & garlic)

Article: The Socialist Origins of Big Data - The New Yorker (on Chile’s project Cybersyn)

Political Moment: The world thinking Kim Jung Il’s public absence was because he broke both his ankles because he ate so much Emmenthal (because obviously)

Person: Shia LaBeouf (for everything he’s given us)

Sophie:

Single: Shake It Off by Taylor Swift (I do not enjoy this song but LOVE watching Charity, one of my best friends and Swift’s greatest fan, singing it)

Album: Artpop by Lady Gaga (the pop genius’s works are not only the epitome of freedom of expression and individualism but Gaga demonstrates the natural force with which the world sucks up anything walking into a gaping hole in the market)

Musician: Kate Bush (my eyes opened to her brilliance and creations this year by Sam, her sounds and voice open creative avenues in my mind)

Movie: La Grand Bellezza (released 2013 but watched this year, you MUST see this, it’s an indulgent party for the senses to devour)

Book: The Rational Optimist by Matt Ridley (only read this year though it was released in 2010)

Restaurant: Le Relais de Venise, Mansion House (holds fond memories of both an amazing steak and my first time dining with the ASI team)

Political moment: remaining a United Kingdom (were endless obscure and hilarious ones in 2014, though building up to the referendum for two years and the elation experienced at the result makes this undoubtably number 1)

Person: Malala Yousafzai (the 17-year-old global role model is courageous, ambitious and hard-working, existing to fight for others’ education—I was reduced to tears of inspiration when she spoke at my university)

Nick:

Song: Fancy by Iggy Azalea and Charli XCX (albeit for entirely non-I-G-G-Y related reasons)

Album: Kenny Dennis III by Serengeti (see No Beginner, Off/On)

Musician: Jonwayne (partly for being the neckbeardiest rapper/producer going – see Andrew, Be Honest)

Movie: Locke (of the four or so I watched)

Book: Time’s Arrow by Martin Amis (1991) or The Rise of the Meritocracy (1958) by Matthew Young (honourable mentions to We by Yevgeny Zamyatin (1921) and Girl, 20 by Kingsley Amis (1971))

Restaurant: Jam Jar, Jesmond, Newcastle, if only for their Cow vs. Pig burger

Article:Tories should turn their backs on Clacton’ and ‘Voters, not the politicians, are out of touch’ by Matthew Parris, King of trolls (Times)

Political moment: The UKIP defections and the resulting betting, which netted me a sum of no less than £10

Person: For me, 2014 was the year of the unimullet (s/o r/YoutubeHaiku)

Sam:

Song: Attachment by Hannah Diamond (My top 50 singles of the year are here, Youtube playlist link here)

Album: It’s Album Time by Todd Terje (Thanks Ben for introducing me. I also enjoyed FKA Twigs’s album LP1 and got into Susanne Sundfor in a big way this year)

Musician: AG Cook / the PC Music grouping in general

Movie: Interstellar (but I only saw about 5 films all year)

Book: Vanished Kingdoms by Norman Davies (Worth it for the chapter on the Kingdom of Dumbarton Rock alone. Matt Ridley’s The Red Queen, on the evolutionary biology of sex, was a close runner-up)

Restaurant: Santana Grill (a burrito stand on Strutton Ground near the office—just delicious; I also ate at KFC at lot)

Article: An open letter to open-minded progressives, by Mencius Moldbug (I disagree with much of Moldbug’s work, but I can’t think of a more interesting contemporary political thinker)

Podcast: Serial

Political moment: Shinzo Abe storming to victory in Japan (also for his amazingly awkward handshake with Xi Jinping)

Person: Richard Dawkins (boring as an atheist, brilliant as Social Justice Warrior-bait)

Philip:

Song: Turn Down for What by DJ Snake and Lil Jon

Album: Syro by Aphex Twin

Musician: Matador

Movie: Guardians of the Galaxy

Book: Intuition Pumps and Other Tools for Thinking by Daniel Dennett

Restaurant: Gymkhana, Mayfair

Article / blogpost: How Farming Almost Destroyed Ancient Human Civilization by Annalee Newitz

Political moment: The landing of the Rosetta spacecraft’s Philae probe on Comet 67P

Person: David Sinclair (for his work on lifespan extension)

Local government cuts needn’t be the end of the world

Local governments are having their spending power cut by 1.8% in real terms next year. Local councils pay for things like social care, some education, public transport and roads, and some of the arts. So this cut is not so popular in some quarters.

I hate relying on ‘waste cutting’ as a way of making spending cuts, but local councils really do seem to waste a lot of money. Since 2010 they’ve made £10bn in efficiency savings, and a third of councils say they can make bigger savings. I’m sure at least some of the other two-thirds are just being shy. The Local Government Association estimates that local governments can continue making efficiency savings at between 1 and 2 percent per year. So that’s something.

The big spending items are social care and waste spending. Both of these can be reformed so that people who can afford to have to pay for themselves. Waste collection is often contracted out, and there is academic evidence that doing so results in significant cost reductions. (There’s an easy way for councils who do not already do this to save some cash.) But more significantly there’s no real reason that more of the actual payments for this should not be moved to private residents as well, at least those who can afford it. 

Social care is much trickier and, as the population gets older and lives for longer, paying for it is becoming a bigger and bigger problem. Those people who can afford to pay for their end-of-life care should do so, but there is the problem that this disincentivises saving. Nevertheless it is hard to see a case for people who live in social housing and earn low amounts of money paying for the end-of-life care of people who own the big houses that they live in. Reforming this wouldn’t solve problems in the short run, but it might help stave off a bigger funding problem in the medium run.

Normally everyone focuses in on arts funding. In my view, there is no role for government in arts funding at all. I won’t convince you of this here, but Pete Spence might. And there are all the weird little things that local governments spend their money on that could be cut to save even a tiny bit of money. Where I live, in Lambeth, half the adverts I see seem to be thinly-veiled political campaign posters (paid for by me and my neighbours).

And, funnily enough, there’s one way councils could raise quite a lot of money and solve another problem in the process. The country needs a lot more houses, and planning permission is the main thing standing in the way. In some parts of the country, a piece of agricultural land that gets planning permission rises in value by one hundred times. Councils should be allowed and encouraged to auction off development rights for new houses. That would raise money for them and help tackle the housing shortage.

The problem here is that housing demand is not equal across the country, and it’s the richer places like London and the south east that would benefit the most from this. So there’s probably a case for some minority fraction of the money raised being redistributed to poorer authorities. In general I like the principle of council funding redistribution from rich to poor parts of the country, but that does reduces the incentive for councils to improve the economic prospects of their own areas. Though perhaps they lack the powers to do this anyway.

We have a government deficit that most people want reduced, some very large areas of central government spending that most people want increased (pensions, healthcare), and a general consensus that economic growth is a good thing (so tax rises are out). Something’s gotta give and there is almost nothing that can be cut painlessly. But given some willingness to reform alongside cutting, local government cuts could be the right way to go.