Branko Milanovic has an article in VoxEU discussing a graph depicting worldwide income gains and losses between 1998 and 2008. If one looks at the overall graph, it shows that, worldwide, people from near the first percentile through about the 75th percentile and those above the 98th percentile have seen gains in their income during that 10 year period.

Cumulative real income growth between 1988 and 2008 at various percentiles of the global income distribution

Meanwhile, however, those between the 75th and 98th have seen a notable drop in their income. Milanovic notes that incomes in the richer, OECD countries (including the U.S.). Incomes in those countries start at about the 70th percentile. (Particularly rich and particularly egalitarian countries, such as Denmark, start at more like the 80th percentile). To be in the top 1% on this global graph, a family has to have a before-tax income of about $300,000 per year.

The people at point “A” where the graph hits its apex are almost entirely in Asia. People in India and China have seen increases in their incomes. In 1998, the median urban Chinese person was at the global median. By 2011, that person had jumped to the 70th percentile.  However, the biggest winners globally are still relatively poor by Western standards. The “global middle class,” as Milanovic puts it, would be at the poverty line in the rich OECD countries.

The good news is that something like 1/5 of the world’s population (those between the 45th and 65th percentiles) saw their income double. “It is their real income growth that has driven the first decline in global inequality since the Industrial Revolution.” The bad news is that the folks who lost ground are not likely to take such a philosophical view of matters.

Milanovic suggests that the complexity of economics makes it difficult to be certain that there is a causation between the gains of the globally poor and the losses of those who are relatively poor in the richer western countries (the folks at point “B”). However, the fact that one went up at the same time the other went down makes it a compelling narrative and easy to believe for those at point “B.” The folks at point “B” are not likely to be concerned with their relative standing in the world. Rather, their sense of well being is going to be a function of how they compare to the other people in their own countries. They see themselves losing ground and the folks at the top of the national distribution making out like bandits. They are only dimly aware of the masses outside their countries. This may explain the embrace of things like Brexit and Trump.

So, a friend had a Facebook post observing that black Americans will talk about being invisible and powerless and, all too often, white Americans will respond by arguing or trying to tell them that their complaints are not real. I chimed in, mentioning that for some white Americans, it doesn’t feel like they’re privileged. They are privileged, but they have a lot of problems of their own and, so, it doesn’t feel like privilege. I cited my older post where I used the Shawshank Redemption as a metaphor. Andy Dufresne was wrongly convicted and crawled through a river of shit to escape and go to Mexico. He might be excused for not thinking he was the beneficiary of privilege. But, he absolutely was. His black friend, Red would have been killed by the guards for the same antics and never would have been allowed anywhere near the warden’s financial documents.

Another person on the discussion thread responded by asking the very legitimate question about why so many people whose lives aren’t (not even in their own opinion) that river of shit still refuse to believe they are privileged. My response to that grew longer than I anticipated and felt like something that might have some value to post here — the perspective of a guy such as myself who enjoys most of the structural privileges you can name and why there was a period in my life when I would have resented the implication that I got where I was through something other than hard work and good choices:

I can only offer dimly remembered memories from my early 20s: white, male, very educated, upper-middle class background. I felt like I was where I was through hard work. I remember getting picked on in middle school and high school for being a nerd. I felt intimidated by the poor kids in school who acted in ways that were rougher than I was accustomed to. I felt like they didn’t value education, didn’t work very hard in school, and made fun of those who did. When they struggled later on in life, I felt like it was going to be because of the bad choices they made right now. And, because they made me feel angry, fearful, or resentful at the time, their future struggles were going to be no more than they deserved. (I see parallels sometimes in the very religious who are especially concerned and angry about the moral failings of others and seem almost happy about the eternal damnation those people are going to endure.)

So, when I got to college and I started to hear about diversity and privilege from a bunch of ivory tower types, it grated. I remember Dennis Miller had a bit about how, because he was a white guy, he was everybody’s asshole. I really identified with it.

There was a lot of individual resentment, fear, and lack of perspective that blinded me to the structural realities of what was going on in society. Of course I had a ton of help getting where I was. Of course those other kids weren’t pursuing education the way I was because they didn’t have the background I did. And their perceived deficiencies were magnified in my mind because of my own fears, anxieties, and resentments. So I wasn’t inclined to listen to any of it.

I’m not defending any of that. I’m not proud of it. But, that’s what I recall about why I felt the way I did when I was one of those guys who had a pretty good life and very much resisted messages about privilege.

The turning point, as I recall it; was that one day I was holding forth bitterly about political correctness or whatever, and my sister asked me bluntly, “what are you so angry about?” I probably offered up some response justifying my tirade. But, I chewed on that question, ultimately concluding that I didn’t have a lot to be truly angry about. Whatever people were saying about white guys or privilege or political correctness was in the abstract. Regardless of how those messages felt to me, nobody was blaming me directly. So, I shouldn’t be mad about that. And, when you got right down to how my life was going, it was pretty damn good. Being angry was gratuitous on my part. My resentment didn’t turn off like a light bulb or anything, but that’s when I think I started heading in the other direction.

So, anyway, one guy’s perspective. I’m not sure how much it applies to the dynamic in our culture generally.

I came across an interesting article by Olav Muurlink in the Sydney Morning Herald. (I really want to go to Australia, but it’s not happening any time soon, so I compensate a little by including some Australian papers in my news reader.) The jumping off point had to do with penalty rates that, I infer, require employers to pay higher rates to have employees work nights and weekends. It has apparently become a political issue in the Australian campaign cycle. The author says:

Penalty rates are often cast as a roadblock to business or employment but public health researchers see penalty rates as a deterrent against employing workers in ways that risk workers’ health.

It’s pretty easy to predict how such a measure would be cast here. “Let the market decide!” “You’re only hurting workers!” Etc. The thing is that an efficient market requires arms’ length transactions where each participant in a contract is making rational decisions without coercion. The need for things like food and shelter means that a potential employee isn’t as free to walk away from a deal or sit on the sidelines until opportunities improve. The invention of property laws means that a person has more limited opportunities to satisfy the need for food and shelter without dealing with other people. But we put up the property law fences so long ago, we forget that they are artificial restraints on liberty. (I’m not some wild-eyed radical suggesting that we get rid of property laws, but I do like to remind people that our laws put a heavy thumb on the scale in favor of property ownership, and we should give that thumb some consideration when reviewing the options of those with less property.)

In any event, Murlink points out that these penalty rates were *meant* to discourage work at odd hours. Work is not the end all and be all.

This is not an argument he makes, but obviously there is a point of unacceptable return, where the cost of labor does not justify the wage paid for it. We don’t permit contracts for perpetual servitude in exchange for food and shelter. That gets dangerously close to involuntary servitude even though an individual could theoretically enter into such an agreement “voluntarily.” We have to ask ourselves, when does the need for food and shelter make an employment agreement less than truly voluntary?

Murlink’s arguments center on the research that shows the costs of irregular work hours and the physical and mental toll imposed upon workers when they lack (or perceive that they lack) control over their work conditions.

A large and well-conducted Hungarian study was able to predict heart disease by simply asking “how much can you influence what happens in your work group”. Of the work variables in this study “sense of control” was the single most powerful predictor of ischaemic heart disease in women, and not far behind for men.

So what is “in your head” is important, and what we find consistently is that blue collar workers not only are more likely to work hours they can’t control, but they feel less in control of other aspects of their work and life.
. . .
[T]there are other ways working time factors pose risks to your health. When time we would normally spend on self-care or even essentials like eating is lost, we buy it back in unhealthy ways – skipping exercise and buying fast food, for example.
Ironically, overwork or unusual hours – even working on weekends – makes us fat. The human body is not designed for constant work. In fact, the eight hour day and the five day week very roughly mark the boundaries at which humans can safely work. The risk of an occupational injury on a ten hour day for example, exceeds that of an eight hour day by 41%, while even higher increases in risk have been observed on the sixth and seventh day of consecutive work.

As a society, we’re working more Saturdays, more Sundays, more nights, and more unusual shifts than ever before, and one way or another, we’re paying penalties. Either businesses pay them in cash, individual workers pay with health, or society pays through health care.

Let’s reiterate that. There is a cost for this kind of work. The question is not whether there is a cost, the question is who will bear the cost. If the cost is externalized onto taxpayers or individual workers, then it won’t be reflected in the price. Purchasers of these services are, in effect, receiving a subsidy — and, therefore, the demand for the weekend and overnight work will be artificially high. The penalty rates are an effort to internalize the costs such that the costs are reflected in the price. When the price internalizes all of the costs of a product, the laws of supply and demand can allow the market to work efficiently. When subsidies are involved, things get skewed.

For those interested in law and government, you might want to add the Hoosier Law Review to your bookmarks, feed readers, and whatnot. With so many blogs dying off after an initial heyday in the 2000s, it’s good to see a new one pop up and hopefully provide some fresh energy. Its “about” section describes the site as being written by lawyers, law professors, and judges and also that:

Hoosier Law Review is devoted to comprehensively covering the Indiana legal and governmental landscape without bias and according to the highest journalistic and legal ethical standards.

A tall order. I wish them the best of luck.

Ron Shawgo, writing for the Fort Wayne Journal Gazette, reports that Indiana ranks low on the latest well-being index. My working theory is that Hoosiers are inherently mistrustful of joy. If some part of life brings happiness, it’s suspect.

Once again, Indiana ranks near the bottom in the annual Gallup-Healthways Well-Being Index, a state-by-state survey of ourselves and surroundings. If there’s any good news it’s that Indiana rose two notches to 46th place.

. . .

Using measures of purpose, social interaction, financial security, community pride and health, the index attempts to help communities and businesses make decisions on health care and job productivity. If you feel good about yourself, have pride in your community, have supportive relationships and believe your life has purpose, then you are likely a healthy, productive person. The measures intertwine.

Indiana consistently has been in the bottom 10 in the index. Its highest ranking was 38th in 2011.

The criteria (and Indiana’s rank) are:
PURPOSE (39): Liking what you do each day and being motivated to achieve your goals
SOCIAL (41): Having supportive relationships and love in your life
FINANCIAL (33): Managing your economic life to reduce stress and increase security.
COMMUNITY (44): Liking where you live, feeling safe and having pride in your community
PHYSICAL (46): Having good health and enough energy to get things done daily.

It doesn’t surprise me that, even though it isn’t great, Indiana performs best on the financial category. We allow ourselves to prioritize working for money. Observing the attitudes of Hoosiers over the years, I suspect many of our citizens view the other stuff as, on some level, frivolous. Certainly not something we support the government spending money on.

Hawaii, Alaska, Montana, Colorado, and Wyoming end up with the best scores while Indiana, Ohio, Oklahoma, Kentucky, and West Virginia make up the bottom five.

Warning: this little post isn’t going to live up to that mouthful of a title.

Brian Howey writes about a recent conversation with former Governor and current Purdue President, Mitch Daniels. Daniels identifies what I agree is a very real problem with the change in our economy. The shift from manufacturing to a knowledge based economy may leave us producing more than we need, but the production is going to be done by fewer and fewer people:

“Every time human ingenuity has created one of these transformations, people have worried,” Daniels said. “They see what is being lost. It won’t take a third of us to grow food. What’s everybody going to do? Every time up to now, the new economy produced more opportunities than the old one did.”

But the change gripping the United States today is worrisome to Daniels.

“It’s not yet clear to me that it will create sufficient categories of new high-paying jobs,” Daniels said. “Whether there will be enough of them to support a growing population and a middle class like we’ve known, that’s what is bothering me.”

As I view it, we’ll be economically productive enough to create what we need to support everyone as well or better than we ever had. The problem is that our current means of allocating the benefits of that productivity doesn’t distribute those benefits in a manner that will support everyone as well or better than we have in recent memory. Traditionally, there has been some justification in telling someone that, if they weren’t producing and acquiring what they needed to support themselves, it was because they were lazy, and we ought not reward laziness. More and more, it seems to me, there are people who are perfectly willing to work; but the economy has shifted in ways that requires labor less and less. If labor isn’t something the economy needs very much, how do we go about allocating our resources in a way that doesn’t rely on labor as a proxy for merit?

Sen. Tallian has introduced SB 136 which would expand a tax deduction for education expenditures currently available for expenditures on expenses for private schools. This would make the deduction available for similar expenditures in connection with public schools.

This means expenditures in connection with:

enrollment, attendance, or participation of the taxpayer’s dependent child in a public or private elementary or high school education program. The term includes tuition, fees, computer software, textbooks, workbooks, curricula, school supplies (other than personal computers), and other written materials used primarily for academic instruction or for academic tutoring, or both.

The deduction is up to $1,000 per child. Sounds fair.

Sen. Mrvan has introduced SB 33 which would make it a Class C infraction for a retail business to decline to allow a customer with Crohn’s Disease or Irritable Bowel Syndrome to use a bathroom on the premises if such a bathroom was available to employees and it would be safe for the customer to use.

If this goes forward, one item I’d like to see is some mention of an affirmative duty for the Customer to advise the business of the eligible medical condition. Also, the terminology is a little misleading. It defines a “retail business” as “a place of business that is open to the general public for the sale of goods or services.” So far, so good. But, it defines “Customer” as “an individual who is lawfully on the premises of a retail establishment.”

Taking my law firm as an example, I think regardless of the law, I’d let someone who had a medical condition use the bathroom. But, as a general rule, we have debtors come into our office to pay bills we’re collecting on behalf of our clients. Sometimes, they’ll ask to use our bathroom, and if we have no other experience with or connection to the individual, we’ll usually decline and tell them we don’t have any public bathrooms in our office. We have an arm’s length, often adversarial relationship with some of these individuals. They are not our “customers.” But, under this law, they are “customers” in the sense that we’d have to open up our bathroom. Like I said, no big deal if they have a medical condition, but the terminology could be clearer, and I’d like them to have some obligation to put us on notice of the condition. As it’s currently written, they could say nothing, we could decline, and I think we’d be liable for the $100 penalty if they had an eligible medical condition.