Fun Online Polls: Most relevant measure of inequality & Charitable spending

The results to last week's Fun Online Polls were as follows:

Which is the most relevant measure of poverty or inequality?

Total income minus tax and housing costs - 66%
Total assets - 24%
Total income - 9%
Total assets excl. value of main residence - 1%

That is a pretty clear result, and surely the correct one. I can see why 'Total assets' came second, especially if you assume this to mean 'total value of land owned' i.e. the equal and opposite of 'total income minus tax and housing costs'.

And as we well know, the way to reduce this kind of poverty or inequality is not more downwards redistribution via the welfare system. That will not help those being totally f-ed over by the system, i.e. working tenants. The best way is to have less upwards redistribution via the tax system, i.e. tax output and employment a lot less and tax land values a lot more.
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To this week's Fun Online Poll:

How much of their income do major UK charities actually spend on charitable causes?

Vote here or use the widget in the sidebar.

Once you've cast your vote, read the surprisingly well researched article in the Daily Mail.

Fun Online Polls: Syria & poverty and inequality

The results to last week's Fun Online Poll:

If the UK bombs ISIS targets in Syria, this will…

Make us safer from terrorist attacks - 1%
Make us more a more likely target - 17%
Not make any measurable difference - 14%
Be a waste of money better spent controlling our borders and combatting domestic terrorism - 63%
Other, please specify - 5%

A clear majority for common sense from a good turnout of 150 votes. Thank you everybody who took part.

Suggestions for "other" included:

Graeme: Wouldn't it be nice if the people who want to go bombing thought instead about ways of stopping the flow of funds and weaponry to Isil?

Yes, I should have added that to the list of sensible ways of spending money, but Pollcode has a limit on how long the answers can be. And, if we have absolutley fair to Cameron, it appears that the RAF is bombing primarily oil wells, which is one way of doing it.

And slightly more left field:

Enola Gay: The problem is not the bombing. The problem is that the bombs will be sub-atomic.
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This week, as a follow up to point 6 of Ben Jamin's recent post…

Which is the most relevant measure of poverty or inequality:

Total income
Total assets
Total assets excl. value of main residence*
Total income minus tax and housing costs

There's no "other" because we'd just end up with endless permutations.

Vote here or use the widget in the sidebar.

* The third option might sound a bit weird, but is the basis for many means tested benefits. For example, if you have a low income but £16,000 or more cash/investments, you get no Housing or Council Tax benefit or Pensions Credit (or their localised replacements and I know that the rules are slightly different for each and there's a Pension Credit Savings Credit to mitigate this). But if you have a low income, no savings and live in a £1 million home, you can still claim Council Tax Benefit and Pensions Credit.

To sum up: a tenant with a low income and £16,000 savings can fuck off, he is not considered to be poor. A home-owner with a low income and no savings and a £1 million house is a charity case and gets all the goodies.

"David Cameron vows 'assault on those in poverty' in conference speech"

From the BBC:

David Cameron has vowed to devote much of his time in office to "an all-out assault on those in poverty" in his speech to the Conservative Party conference.

The prime minister, who will stand down before the next election, said he wanted to combat "people with deep social problems" and boost downwards social mobility.

Mr Cameron said he wanted his time in power to be remembered as a "defining decade for our country.. the turnaround decade... one which people will look back on and say, 'that's the time when the tide turned… when people no longer felt the current was working with them but going against them'."

"Hard working pensioners 2"

Following on from Monday’s discussion the Beeb are reporting on an IFS research study in which it is claimed that UK pensioners' incomes have risen faster than all other age groups in the last 30 years, and also claims that the over-60s are the only age group to have become better off since 2007/08.

 

The Beeb suggests that “the findings may fuel the debate over how much protection pensioners should be given from the government's current austerity measures”.

As yet the actual report Living standards, poverty and inequality in the UK: 2013 does not appear to be publicly available, the IFS website explains that "The Department for Work and Pensions (DWP) has today [13th June] published its annual statistics on the distribution of income in the UK. The latest data cover years up to and including 2011–12.  Tomorrow, IFS researchers will publish a detailed report, funded by the Joseph Rowntree Foundation (JRF), on what these data tell us about living standards, poverty and inequality in the UK."  The link given actually takes you to details  of the Conference organised around the release of the report:-

Living standards, poverty and inequality in the UK: 2013

Date: 10:00 14 June 2013 - 11:30 14 June 2013 Type: Conference Venue: CILIP  [see map] Price: members: Free; nonmembers: Free

On Thursday 13 June, the Government will publish the latest figures on the distribution of income and the extent of poverty in the UK. The figures will cover 2011-12, the current coalition government's second year in office.    The IFS will then release a fuller report, funded by the Joseph Rowntree Foundation on the latest figures and recent trends on Friday 14 June.  Going beyond simply describing the data, it will look at the factors driving the changes in incomes and poverty observed, and will look forward to prospects for income growth and poverty over the coming years.

Money can't buy you happiness

Not if you are a miserable bastard to begin with.

The Guardian did a small survey to find out if people felt rich or poor, and the ensuing article is well worth a read.

There are some interesting insights into how people view their housing, like the PR from Surrey who says "Considering my husband works 6.30am - 0pm, and I'm also working three days a week, you'd expect to have your own home." A nice piece of Home-Owner-Ist propaganda there, that a rented house is not your home.

A great comment also from a London PA "Somebody did a study and the conclusion was, if you live in the best house in a shit street, you feel much happier than if you live in an objectively much nicer house but it's the smallest one in a nice area. That's something I think about a lot. It may be part of why I feel happy with my life."

It's also interesting how many of the responders are mortgaged to the hilt - Ricardo's law in action. Generally, though, it does show that richness or poverty tend to have as much to do with attitude of mind as it does with actual income, although not living beyond your means has a lot to do with not feeling poor.

Reader's Letter Of The Day

From the FT:

Sir, In your impressive editorial on November 1 you state that the existing housing benefit system is “indefensible” and “should be changed on moral as well as economic grounds”. Unfortunately, is this statement not undermined by a remarkable inconsistency? What about the other property benefit system, where all those of us who give our labour, or risk our capital, create, sustain and increase the wealth of those of us who own land?

The cost of this latter benefit is measured in part by the way the land value element of private property interests increases over the years at a substantially greater rate than wages or prices, forcing those of us who pay tax on our efforts in having to pay even higher rent to the landlords. Is this not forcing the landless to pay twice for a value they have created?

We then appear to be in the extraordinary situation that taxes are increased even further, on labour and risk capital of course, to pay cash in the form of benefits to try to ameliorate the worst effects of this injustice. And the effect of this? Well, it tends to make the poor poorer and the wealthy even wealthier and greater economic prosperity forces the price of property to rise faster still due to the limited supply of land. This system is so attractive to the wealthy, and the asset bubble sustained by it so large, that the chances of any political party being even prepared to openly debate the subject seems highly unlikely.

And what is the message that is left for the poor? We will give you charity, not justice?

John Read, London NW11.

Bob Geldof

No shit, Sherlock.

From the BBC:

Persistent absence from school is five times higher in England's poorest areas than in the richest, government figures show. Some 50,000 children in the poorest neighbourhoods are absent one day a week on average, according to an analysis by the Conservatives... The worst local authority was Manchester, with 6.7% persistent absentees. The best mainstream authority was Rutland, on 2.1%.

OK, the Tories have waded into the debate: are they going to tackle causes or symptoms?

Shadow children's secretary Michael Gove said... "We need to focus on these areas, giving extra money to schools that take children from the most deprived backgrounds, so that we can give these children the opportunities which others take for granted. This is yet another block on social mobility from a government which has failed to help the poorest in society."

Symptoms it is, then! And it's nice to see the government hit back with a good old-fashioned lie, or an irrelevance at best:

Schools minister Vernon Coaker said overall levels of absence were at their lowest ever. "If you look at some of the most challenging areas, the needs there are extremely complex. That's why schools are working with other children's services, working with families, in order to try to ensure that we get children where we want them, that is in school."

Chart 2.1

Shamelessly pinched from Mark's Any:


What the chart shows is that if an unemployed person finds a minimum wage job and works 50 hours a week (isn't that against the law anyway? Hmm.), he or she is about £50 a week better off than on the dole, which is why upwards of five million people just don't bother.

Now, is it just me, or wouldn't it make more sense to scrap Housing Benefit, give every legally resident adult £60 (or whatever) per week cash and a BR code for PAYE purposes (i.e. no entitlement to personal allowance). Assuming a flat-tax rate (i.e. income tax and Employee's National Insurance get rolled into one) of 31% to get the ball rolling, a 25-year old who's currently unemployed would only have to work about 20 hours per week to end up better off than they are/would be now.

If the recipient is e.g. a student or a married mum, well so be it, it obviates the need for a whole parallel universe of means-tested student grants and loans and Statutory Maternity Pay (or transferable married couple's allowance or whatever the Tories are currently dreaming up), and if the recipient already has a job, it's much the same as having a £10,000 tax-free personal allowance (at this level of annual income, the weekly tax paid and the £60 benefit would more or less net off).

And last but not least, it'd make life easier for employers, because PAYE would be a flat 31% (or whatever) of gross wages with no need to faff about with personal allowances and so on. We could even go one better than that and scrap Employer's NIC and increase corporation tax to a flat 31% as well ...

Hey, once you start simplifying, the possibilities are endless - if you're with me so far, we could then abandon the distinction between 'corporation tax' on retained profits and 'PAYE' on wages and salaries paid out, and tax companies as if they were partnerships, with automatic loss relief if salaries exceed gross profits...

What's not to like?

Relative poverty statistics

There's a brilliant post over on the IEA 'Blog, on how a simple boundary change could drive three million people into relative poverty.

"From poverty to power"

Oxfam have come up with yet another report that conflates all the wrong issues and comes up with the wrong solutions.

According to the summary in The Metro;

Urgent action is needed to prevent millions of people being dragged into poverty because of rising fuel and food prices, Oxfam warned yesterday. Poor countries must slash their carbon footprint and invest in greener energies, while giving their people more of a voice, the charity said.

'Unless we act quickly, the gap between the haves and the have-nots will grow uncontrollably,' said Duncan Green, author of From Poverty To Power, 'We face either catastrophic climate change or serious economic decline. Either way, the poorest will be hit first and hit hardest.'

Every year, 30 million children are born facing a lifetime of poverty, poor nutrition and sickness.

Leaving aside all that crap about 'greener energies' (which are far more expensive than traditional sources!!); leaving aside the crap about the 'gap' (making rich people poorer does not make poor people richer); leaving aside the crap about 'catastrophic climate change' (global temperatures peaked a few years ago and are now going down again); how about this for a simple solution:

Simply invite those people who are reckless enough to have 30 million babies each year, regardless of the fact that that they 'are born facing a lifetime of poverty, poor nutrition and sickness' to ... er ... stop having babies?

The same logic applies to welfare claimants in the UK, of course. Heck knows why the welfare system encourages it.

Chancellor calls top of housing market

The Badger successfully called the top of the credit bubble a week ago. He called for a return to responsible borrowing and lending. Two days later there was a run on the Northern Rock.

The Badger said in The Times this morning (scroll down to last paragraph):
“I take the view that the slowing of house prices and ensuring that they are based on reality is not a bad thing. It is in no one’s interests for house prices to go on rising year after year after year when that is not justified.”

Thus successfully calling the top of the housing market a week later. Expect to see a forest of 'For Sale' signs go up over the weekend.

Look chaps, I think Vince Cable is the only policitican or journo who seems to have dimly realised that there maybe is a link between NR collapse and high house prices. There's not just a link, they are TWO SIDES OF THE SAME COIN. You can't have a credit bubble without an asset price bubble and vice versa.

British workers getting poorer

Average wages growth to July 2007 3.5%

RPI inflation to July 2007 3.8%

Update:

Simon Clark has asked whether the 3.5% is after adjusting for inflation. Methinks not. If you go to the ONS report and scroll down to the bottom, it says:

"In the year to July 2007 consumer prices increased by 1.9 per cent, which is below the rate of earnings growth"