Author Archives: Backroom Girl

Irony or rank hypocrisy?

Posted on by
43

Is it just me or do other Troppo readers appreciate the irony (or rank hypocrisy depending on your level of cynicism) of the main exponents and proselytisers of fairness and equality in our society apparently applying a completely double standard, when it comes to their own remuneration and access to social security payments?

I speak of course of the religious and charitable organisations who have succeeded in getting the government to overturn what was, in fact, a perfectly justifiable (and dare I say, fair and equitable) policy decision – that employees of such organisations should have their income for social security purposes calculated in the same way as any other employee who receives an equivalent remuneration package.

Continue reading →

Income inequality in the noughties – how far would you go to fix it?

Posted on by
44

In the recent mega blog discussion kicked off by Don Arthur, I ventured the opinion that “the truly remarkable thing is that the Gini coefficient of equivalised disposable income has only increased from 0.28 to 0.31 in the last 30 years of so.”  Given the underwhelming response from other commenters to those words of wisdom I thought I might expand a bit on how I came to that conclusion.

Lets say for starters that we are back in the 1950s.  We have five working to middle class families, with varying numbers of kids.  Lets just suppose that all of the husbands work full-time in similar jobs in a local factory, or bank, or insurance office.  All of the wives are ‘homemakers’ (dontcha love that word?), most having retired from work when they got married.  In that world, equivalised disposable income is mainly affected by the number of kids in the family, but overall inequality in disposable income (the Gini coefficient) is relatively low.

Fast forward to today.  All of the Dads still earn similar incomes, but probably in a wider range of jobs.  In one of the families, Mum went off to university and got herself a degree and a well-paid full-time job.  In another, Mum has a permanent part-time job, say as a teller in the local bank.  The Mum in the third family works as a casual in a local supermarket, because she likes to be available when the kids come home and to take time off during the school holidays.  The fourth Mum still believes that a mother’s role is at home as full-time homemaker and mother.  And the fifth family has split up when the parents decided they didn’t love each other any more. That Mum has moved with the kids into public housing in a nearby suburb – she has a bit of a part-time job during school hours, but is mostly reliant on income support.  Guess what’s happened to the Gini coefficient in this world, compared with the first?

Well, I’ll admit that that is a highly stylised account of some of the changes that have happened in Australia in the last 50 years and that there have been a lot of other changes overlaid on the top of these.  But it’s pretty obvious isn’t it that even if the distribution of wages hadn’t widened, household income would be a lot more unevenly distributed these days than it used to be.  And the other relevant point for me is that the increased inequality has come from people making free choices about their education, work and living arrangements.

So my question for those of you who believe that Australia’s level of income inequality is too high now is this – what would you do to reduce income inequality among this particular set of families? 

When is a couple not a couple – the politics of recognising same-sex relationships

Posted on by
18

According to Patricia Karvelas in the Australian yesterday (accompanied by the picture below) , it will be up to John Howard to decide whether or not same-sex couples will be granted equal status with heterosexual couples under Commonwealth law, since the Cabinet could not agree.

same-sex.jpg

I was rather intrigued to read in this article that one of the reasons advanced against such a change was that the reforms “would cost taxpayers millions in extra social security payments”.  This was news to me, since the main effect I can see on social security entitlements would be to save the taxpayers millions, both through payments of lower ‘partnered’ rates of payment and through taking account of the partner’s income.  While it was once the case that people could get social security just by being “married” to someone, thankfully those days are long gone.

In this morning’s radio discussion on the topic between Gerard Henderson and Fran Kelly, Gerard opined that it was a difficult decision to make, with arguments for and against, etc, etc.  To her credit, Fran rather pointedly asked him what the main argument against reform would be.  The best he could come up with was that while some (higher income) couples would do well out of it financially because of getting access to survivor’s superannuation pensions, other (lower income) couples would be worse off because they would get lower social security payments.

So once again, the political argument for and against policy change is not couched in terms of what is right, but in terms of who will win and lose and the political implications of the losers in particular. 

While Gerard is perfectly right that some people would get lower social security payments if their marriagelike relationships were recognised, this would require them to have willingly volunteered the fact of their relationship to Centrelink.  Anyone who wants to preserve the advantageous financial position of presenting as two single people only has to stay in the closet. 

Somehow I can’t see Centrelink zealously pursuing a couple to prove that they are in a same-sex ”marriagelike relationship” – those are difficult enough to prove when the people involved are of opposite sex.  Once the inevitable happens (perhaps not with John Howard, but certainly with the next PM of either stripe), it will indeed be interesting to see how many same-sex couples receiving income support manage to resist the ‘obvious’ financial incentives and declare themselves to Centrelink.  I suspect quite a few will do so.

A visit from the OECD

Posted on by
Reply

Peter Whiteford, an Australian working with the OECD in Paris will be presenting a seminar in Melbourne next week at the Brotherhood of St Laurence in Fitzroy (details below the fold).

People who are regular visitors to this blog and some others such as Andrew Norton’s and Andrew Leigh’s will recognise Peter as an occasional commentator who usually manages to shed a fair bit of light on social policy discussions, especially if they involve a degree of inter-country comparison.

Continue reading →

Are so many people really unhappy with their working hours?

Posted on by
7

Close on the heels of the latest ABS publication on Working Time Arrangements, the subject of a long blog discussion on Andrew Nortons site, the ABS has followed up with Preferred Working Hours of Wage and Salary Earners, Queensland.

This Survey found that, of people surveyed in Queensland, only about half were happy with the hours they worked. About 14 per cent preferred to work more hours and a whopping one third preferred to work fewer hours. In that last category, however, only about one in five was prepared to work fewer hours for less pay the majority wanted to work fewer hours for the same pay.

Continue reading →

Women and increasing income inequality: why it’s (mostly) women’s fault

Posted on by
12

Iâve been musing lately about the connection between womenâs labour force participation and income inequality and Iâve been forced to the conclusion that, once again, itâs probably womenâs fault. Increasing inequality in market incomes, that is.

My logic goes something like this. Once upon a time, most households in Australia had one income earner (Dad). The proportions that had no earners or more than one were relatively small. The level of household income inequality therefore was driven largely by the distribution of menâs wages.

Since then things have changed. There are now many more jobless households (one of the few international rankings where Australia is near the top) and a growing number of households with two or more earners, including quite a few where there are two fullâtime incomes.

So basically we have much greater diversity between households in the number of market incomes coming in, on top of the diversity in earnings. And the thing that has been driving that diversity most is, on the one hand, the increase in the number of jobless (mainly single parent) families and, on the other hand, the increase in womenâs employment, particularly among married women and mothers. Whichever way you look at it, women are largely to blame.

Now, many people of leftish persuasion would simply accept that increasing market income inequality is bad, without question. But it this is so, what is the policy solution? Should we go back to the male breadwinner norm as some would like? Surely not.

Continue reading →

Why there¢â¬â¢s no going back to the ¢â¬â¢50s

Posted on by
20

Balancing Work and Family, the recent report from the House of Reps Standing Committee on Family and Human Services contains a version of one of my favourite pictures. (I’ve posted my own version below the fold.)

The figure shows how labour force participation has changed for successive birth cohorts of Australian women, with each birth cohort maintaining significantly higher labour force participation than previous cohorts across most if not all of the lifecycle.
Continue reading →