Two Points On Inequality

I've stayed out of the inequality - minimum wage business, largely because it strikes me equally to a greater extent than oftentimes than non political posturing rather than serious policy or economics.

Influenza A virus subtype H5N1 few minor points from the blogosphere struck me equally interesting plenty to exceed on, too indicative of that conclusion.


David Henderson, "Minimium Wage non Well Targeted at Reducing Poverty" makes that rather obvious point. How much would raising the minimum wage alter the U.S.A. Gini coefficient, fifty-fifty if it had no occupation effects? Not much, obviously, if yous mean value nearly it simply for a moment, too fifty-fifty less when yous expression at who genuinely plant at minimum wage jobs. Quoting  Joseph J. Sabia too Richard V. Burkhauser,

• Only 11.3 per centum of workers who would gain from the growth alive inwards households officially defined equally poor.
• A whopping 63.2 per centum of workers who would gain were 2d or fifty-fifty tertiary earners living inwards households alongside incomes equal to twice the poverty draw or more.
•  Some 42.3 per centum of workers who would gain were 2d or fifty-fifty tertiary earners who alive inwards households that receive got incomes equal to 3 times the poverty draw or more.

That brings minimum wage hikes into the Earth of answers inwards search of a question. If yous seriously desire to brand a dent inwards the U.S.A. Gini coefficient, too pass a yr of your Presidency doing it, niggling alongside miniumum reward is simply an insignificant policy. We mightiness equally good manage nearly raising taxi fares.

John Goodman "In defence of inequality" takes the goal of less inequality inside the U.S.A. seriously. OK, if inequality inwards the U.S.A. is the problem, what is the logical consequence?  John notes nosotros straight off revenue enhancement wealthy people who desire to leave of absence but

...when a wealthy mortal expatriates, the distribution of income too wealth becomes to a greater extent than equal. Should nosotros opposite course of written report too encourage the John Templetons of this Earth to move out of town. If equality is a serious goal, nosotros should at to the lowest degree relax the penalties. 

At the other destination of the income ladder, catch piteous immigrants. Every fourth dimension i comes to our shore, the distribution of income [within the US] becomes to a greater extent than unequal. But the same could last said if the immigrant is rich. Any immigrant who isn’t earning unopen to the average income is going to brand the distribution less equal equally a outcome of his immigration. If equality is a serious goal, nosotros definitely involve a dissimilar immigration policy.

This strikes me equally a longstanding sore spot inwards the redistributionist agenda. If yous worry nearly inequality, why worry solely nearly inequality inside the US, too non across national borders? Of course, if yous worry nearly cross province inequality too desire to address it alongside redistribution, the U.S.A. equally a whole, fifty-fifty piteous people here, should last sending boats total of coin (and goods) to, say, Bangladesh. But I grip alongside John

...before nosotros rush out too alter all these laws let’s halt too reconsider. If inequality is a bad thing, at that topographic point must last victims. Yet if penniless immigrants come upward to our shore, knowing that their arrival makes the distribution of income to a greater extent than unequal than it was too knowing that they volition last at the bottom of the income ladder initially, too thus it’s difficult to fence they are beingness victimized.

John again:

Then at that topographic point is federal assist to the students at Harvard. Granted, many of them may last piteous correct now. But if they were smart plenty to teach into Harvard, their lifetime expected lucre are means higher upward average. And what’s truthful of Harvard is truthful of Yale, Princeton, etc. In fact, an declaration tin last made that all assist to college students everywhere contributes to inequality. If equality is a goal, at to the lowest degree at that topographic point should last a lot less of it.

Yes. Our authorities does a huge total of redistribution too a whole lot of it goes to rattling good off people.

Lotteries too gambling yesteryear their nature create inequality.

it’s difficult to mean value of an establishment that causes to a greater extent than inequality than the lottery, fifty-fifty though lotteries are a favorite source of funds for Democratic legislatures too Democratic governors. 

The natural conclusion is that significantly reducing pretax within-US income inequality isn't genuinely the goal of people advocating higher minimum wages. I'm non clear what the goal is (except perhaps to teach us all to manage nearly something other than each week's ACA horror story.)

The biggest slice of the hateful solar daytime was Ari Fleisher inwards the Wall Street Journal: "How to manage income inequality: Get Married" 

"Marriage inequality" should last at the middle of whatever give-and-take of why some Americans prosper too others don't....among families headed yesteryear ii married parents inwards 2012, simply 7.5% lived inwards poverty. By contrast, when families are headed yesteryear a unmarried woman parent the poverty score jumps to 33.9%... amid white married couples, the poverty charge per unit of measurement inwards 2009 was simply 3.2%; for white nonmarried families, the charge per unit of measurement was 22%. Among dark married couples, the poverty charge per unit of measurement was solely 7%, but the charge per unit of measurement for non-married dark families was 35.6%.

(See master for sources.) One may object nearly correlation too causation here, but the fact that non-marriage too poverty croak mitt inwards mitt is sure as shooting worth thinking about. And it's doubly tragic for children. 

... the release of children raised inwards female-headed families is growing throughout America.... 28.6% of children born to a white woman parent were out of wedlock. For Hispanics, the figure was 52.5% too for African-Americans 72.3%. In 1964, when the state of war on poverty began, almost everyone was born inwards a menage unit of measurement alongside ii married parents: solely 7% were not. 

For children, the job begins the hateful solar daytime they are born, too no authorities tin redistribute plenty coin to educate it. 

 The job is non teenagers. This is a alternative made yesteryear adults.

 The bulk of women who receive got children exterior of wedlock today are adult women inwards their 20s. (Teenagers nether xviii stand upward for less than 8% of out-of-wedlock births.)

Ari concludes

One of the differences betwixt the haves too the have-nots is that the haves tend to hook upward alongside too give birth, inwards that order. .... Influenza A virus subtype H5N1 improve too to a greater extent than compassionate policy to manage income inequality would last helping the piteous realize that the most of import determination they tin brand is to rest inwards school, teach married too receive got children—in that order.

This is the elephant inwards the room, too interesting that i is non allowed to bring upward it inwards polite society.

The debate on the apparent ineffectiveness of the state of war on poverty comes downwardly to this: Did unmarried parenthood amid piteous people growth of its own, for mysterious social reasons, too solely massive coin from the authorities is keeping people from otherwise inevitable destitution? Or did the vast growth inwards the welfare province contribute to the pathology that straight off it needs to fix?

Goodman was pretty clearly of the latter view. Fleisher leans to the former, but genuinely savage brusk on why this happened, too "helping the piteous to realize" is pretty hopeless equally a policy prescription. They piteous are smart, too huge unmarried parenthood rates practise non come about because people are simply besides dumb to realize the consequences, which the encounter all around them.

From the left, I listen zip but deafening quiet on this correlation.

Meanwhile, the Bureau of Labor Statistics reminds us i time again of why pretax income distributions widened:

Inequality comes from lack of wedlock too education. It is non apparently a job per se, but it is a symptom of social too economical dysfunction. Single-parenthood rates over 50% are a sign of a social club inwards deep trouble.

Raising the minimum wage is too thus less than a band-aid for the symptoms of a heart-attack sized problem. But why too thus is the minimum wage thus high on the chattering-class agenda?