Income distribution

A couple of weeks back I went to a debate about the legacy of the miners’ strike. There was a lot of shouting at Edwina Currie, being the only Conservative there, and a member of the government at the time. There was an element of nostalgia too, with mining jobs being romanticised a bit too much (George Galloway and Ken Loach were there too). However, the fact remains that these dirty and dangerous jobs seem to pay better than the service sector jobs that have replaced them.

One of the more interesting claims was that British workers have really good earnings. Edwina pulled out the ‘creative industries’ argument, like Charlie Leadbeater’s Living on Thin Air, effectively saying we could all be earning good money designing computer games. It is of course true that the average British wage is high, and the creative industries is profitable. But for the worker at the bottom of the pile, it’s the distribution that counts.

For example, if a company makes £1m p.a., after costs, and shares it between 50 workers equally, then they all get £20k each. But if they decide to ‘award’ the 4 managers with £100k salaries, then the remaining 46 only get £13k each. The mean wage in each is the same, so in any analysis we should examine the distribution, not just the minimum, maximum and means.

Thus, on the one hand the government can tell its domestic audience that we’ve never had it so good, and that we’re paid really well. This was Edwina Currie’s line. But when its audience is overseas investment, a different story is told:

‘The UK has a competitive salary structure in the service sector [i.e. cheap], particularly when compared to countries such as Germany, Ireland,Spain, Sweden and Switzerland… hourly compensation costs for production workers in the UK are also lower than in many other countries…’ (UK Invest)

The same document also shows that the UK has the reputation of the most flexible labour market [i.e. best for business, not workers], except for China:

But internally, businesses give the impression of being hampered by red tape, unions with too much power, and the minimum wage. The CBI originally said the minimum wage would reduce the number of jobs, then each time there’s due to be a raise they say the same thing.

Perhaps at GDP per head, the UK is doing well, but we also have the most unequal wage structure outside the US, so people can still be badly paid here.

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An order of magnitude

We know many people are bad at maths. However, most mistakes are easily spotted through experience and common sense. But sometimes, common sense is lacking: here I’m talking about the Conservatives gaff on teenage pregnancy.

So first, the Conservatives. A few days ago they launched a document called Labour’s Two Nations, that was supposed to show how there is great inequality in Britain today (let’s ignore the fact that the rise in inequality happened in the 1980s). What they wanted to point out was that under-18 girls in the most deprived areas are three times more likely to become pregnant than in the least deprived areas (Guardian). It’s not clear what this means with regards to ‘most deprived’ and ‘areas’ – I think it’s top and bottom centiles and districts – and I’m sure I could find a more shocking figure if I chose a harsher definition of most and least deprived. The mistake they did make, though, was to divide 54 by 1000 and come up with 54% not 5.4%. That’s if they did a calculation: some social statistics come as ‘per 1000’ or ‘per 10,000’ and it’s important to notice this.

This matters for two reasons. First, because 54% v 18% is a big difference and much more significant than a difference between 5.4% and 1.8% (significant thought this is). Second, because anyone with any sense would realise that 54%, that is over half, is completely absurd.  Anywhere with 54% of its teenagers pregnant would have babies everywhere. Either the writer and editor just missed this, or they genuinely believed that there could be such a place and they are massively out of touch with normal life.

Prejudice and equalities

Yesterday’s UK papers have been covering a spat between Philip Davies, a Tory MP, and Trevor Philips, the head of the UK ‘equalities’ body (see the Guardian, the Times). I do support the work of the Equality and Human Rights Commission, but Trevor Philips doesn’t do the cause any favours in some of his answers to the MP’s letters.

The Tory MP is a mischief maker with too much time on his hands. He’s written lots of letters about ‘political correctness gone mad’ that fit into a Daily Mail view of the world. In this view, anything and everything is done for the benefit of ‘minorities’ and that would include ‘wimmin’, gay people, ethnic minorities, and anyone different to the norm. This argument takes in the myths about banning golliwogs and Christmas in schools.

Part of the problem comes in the name of the body. The word ‘equality’ means different things to different people, and political philosophers have used up much paper and ink working out what equality, justice, and the ‘good society’ should be. Particularly in the literature on multiculturalism, there’s the big question of group and cultural differentiation and rights. In essence, should people be treated differently just because of their (assumed) membership of a group, and the further (assumed) differences in needs and capabilities. This raises questions of the form ‘should women have separate sports sessions, as they may be put off by the presence of men?’ or ‘how far should employers adapt their working hours for those who need time off for religious reasons?’. Treating everyone the same isn’t equality, as people have different needs and capabilities (see Amartya Sen on capabilities), but treating people differently merely on the basis of group membership can create new injustices (see Sen again in Identity and Violence).

Of course, the work of the EHRC is informed by the historical injustices of the UK. So our history of colonialism and inability to welcome or assimilate newcomers leads to problems with regards to race. Moving from a patriarchal society means that gender issues are important, and so on. However, the EHRC also suffers from its own history. It was formed by the bringing together of a number of bodies that did similar work (the Commission for Racial Equality, the Disability Rights Commission, the Equal Opportunities Commission) but only on one inequality each. There was hope for ‘joined up thinking’ whereby the way that individuals’ multiple identities combine to form injustice could be addressed. Furthermore, other injustices could be addressed.

I was actually a researcher on a small study that informed the creation of the body, Melanie Howard and Sue Tibballs’  Talking Equality (2003). I remember that the interviews and focus groups added a further source of inequality that got lost from the agenda: class. Indeed, if we added class to the mix it would help with some of the other injustices. It is surely more just (in terms of numbers), and so a higher priority and more likely to be supported by the public, to argue for equal pay for female cleaners than to examine the numbers of women in boardrooms. Similarly, addressing literacy problems across the board, and especially in white and Asian working class families, should be more important than BME business initiatives.

To go back to Trevor, and what I think he’s missing in his replies to the MP, just addressing the five or six ‘inequalities’ identified so far doesn’t bring justice. I know he was probably bored of the correspondence by this point but this exchange is particularly problematic:

Should anti-discrimination laws ought to be extended “to cover bald people (and perhaps fat people and short people)”?

“The answer to your question is no.”

Now I haven’t read anything about bald or short people, but there’s plenty of literature on discrimination or prejudice against fat people. Trevor Philips should have said that the body works to eradicate prejudice wherever it is found, and that if a group or type of people is found to be unjustly discriminated against then measures could be needed, perhaps laws, perhaps not. He’s fallen into a trap: he didn’t want to play into the anti-PC brigade (imagine the Daily Mail headlines re. short people), but instead he’s telling us that only some groups deserve protection, so we can have Daily Mail headlines saying that the body only protects ‘minorities’, so can be cut by a Tory government. A broader support for human rights and tackling discrimination is more likely to be achieved if it isn’t about sectional interests, or the different, but is for everyone and is promoted as being for everyone.

P.S. If you think that other, less talked about, prejudices are never as serious as racism, remember that one young woman was recently murdered for being a goth.