Order Cialis And Viagra Para Se Usa Arcoxia 120 Mg Where Can You Buy Cipro Adalat Xl 30 Mg Tablets Can You Buy Codeine And Promethazine

Data abuse


3:30 pm - March 19th 2010

by Guest    


      Share on Tumblr

Guest post by luis enrique

I wish people spent more time looking at data and less time pontificating, so in theory I ought to love the flourishing of attention paid to household income data

But I don’t, because I think it’s being misused. It’s possible to misuse data like this in lots of ways, but I want to focus on just one. The household survey data offers a static snapshot of household incomes, but the right way to think about poverty, and wealth, is to look at lifetime income profiles.

Here’s what I mean. Think about a squarely working-class couple [1]. For example, say one is a bus driver and the other a hospital orderly. This fictional couple are not, and never have been and never will be well-off. When they were young, they were penniless, and their future as pensioners doesn’t look too comfortable either, but right now they are late middle aged, the kids are back at school and both have built up many years of experience in their respective jobs. Depending on the assumptions you make about realistic wages, this couple could be pulling in £30,000 to £40,000 [2] . They could easily sneak into the top third of the household income distribution.

It could be possible to argue that households in this region of the income distribution are well-off, and not the sort of people left-wingers should be concerned with. That’s not right. These people aren’t well-off, they just look well-off because we are comparing a household a the peak of its earnings powers to an income distribution that includes young people, pensioners, or people in temporary unemployment and so forth. There is a tendency to argue that policies that help such people are regressive, and should not be supported by left-wingers (this fictional couple would be, I think, in the seventh household income decile) [3]. That’s not right.

If you want to say that, for simplicity, left-wingers should concern themselves with the welfare of people in the bottom half of the income distribution, you should look at life-time income profiles and pick the bottom half of that distribution, not the static snapshot offered by the household survey data.

Those years where working people are at the peak of their earning power are important – it’s when debts have the best chance of being paid down and savings accumulated and children helped to establish themselves. Of course egalitarians want to see the distribution of wealth flattened, but at the same time we also want to make working at the lower end of the distribution as rewarding as possible. We want to make workers better off. It would be a big mistake to evaluate policies through the prism of static household income data, and perhaps reject them on the basis that they help the well off.

[1] Of course not all households have two potential wage earners. The fact that the data mixes single people with no dependents in with everybody else is another reason why making comparisons with averages (or deciles) can be misleading.

[2] The UK median full-time wage is just over £25,000.

[3] I gather there are some other problems with that analysis (only looking at one leg of the tax policy) but even if that wasn’t the case, it would still be wrong to using income data in the way they do.

    Share on Tumblr   submit to reddit  


About the author
This is a guest post.
· Other posts by


Story Filed Under: Blog ,Economy ,The Left

Sorry, the comment form is closed at this time.


Reader comments


^
this, in gigantic masses. Students with rich parents or decent future earnings potential (*) and old folks with no income but plenty of house-price wealth (**) are not our problem as lefties (students might be daft enough to vote for whatever silly policies we put forward if we make them hippy enough, but that’s not the point outside of crude electoral politics) – the working class, in the sense of people who actually work in actual jobs, are.

(*) ie ‘all students’
(**) the government should endorse mortgage release schemes, so that rich old people stop thinking they’re poor; it should also encourage old folks to sell up and move into smaller houses using any non-coercive means that gerontic-marketing-specialists can think of…

Good piece. Would it be fair to say that ideally we would just measure static wealth (perhaps corrected for age), on the basis that the more of it there is, the more utility the individual has and the less help they need? It’s not very easy to do this, so income measures of *some* kind will have to be the fallback, but it strikes me this is what a lifetime income measurement is really getting at.

@johnb
“it should also encourage old folks to sell up and move into smaller houses using any non-coercive means that gerontic-marketing-specialists can think of…”

It’s crazy that we need “means” to do this. I still cannot for the life of me fathom how that whole poor-little-old-folks meme has managed to get so well-established. As if people in their 20s, 30s, 40s and 50s didn’t make pragmatic decisions constantly about where they can afford to live and what sort of home is suitable for them. Why is it so unthinkable that people older than that might have to as well? An exaggerated reverence for (wealthy) age which sadly does not translate into overwhelming campaigns for better end-of-life care. IMHO.

I can’t help thinking that using any tool to analyse national household income (something over 24 million units) is rather crude and ‘big hammer’. As Luis says, it does not compare like with like, and automatically therefore makes incorrect deductions so much easier.

Now, the problem is that however refined the solution proposed to the problems of using over-averaged data, it will still be comparing people to average figures, and not actually making any assessment of need (if we adopt Alix’s idea of lifetime income measurement, we are also making some very large assumptions which have no clear justification in any individual case). A household with an income of £30 000 per annum is not only quite well off if it is one person, but poor if it is four, or relatively worse off if the wage earners are mature than it is if they are young; it is also far better off if household income is reduced by not paying rent or mortgage, by having less debt, by not having to travel 150 miles every weekend to see family etc. Whilst it is therefore tempting to complicate the data, income data alone is not enough to define if someone is actually poor, in the classical definition of not having enough money.

And no, I don’t have a solution to the problem. But I do not think in this case the flawed system of crude data analysis is any better than no solution.

4. George W. Potter

@ john b

I’m a student, my father has to live off an income of less than £8k a year. I can only afford university doe to claiming the maximum maintenance allowance, maximum loan and due to the bursary my university offers people from low incomes. I’d say that if you want a fairer society then you need the means for people to educate themselves, dismissing students as not worth bothering with completely overlooks the very real problems people from low incomes face in trying to go to university. And if people can’t educate themselves then how can you ever expect there to be anything approaching proper social mobility?

I can’t make up my mind whether you’re a rightist posing as a lefty or if you’re a lefty with absolutely no clue about the very basics of progressive policies.

5. Luis Enrique

George,

you’re right (and I suspect John was being slightly facetious in the element of his comment you object to). Ensuring young people from poor families can afford to go to uni is of course a basic left wing concern. However conditional on that the fact students are skint isn’t such a worry, because (most) students have much higher expected lifetime incomes than the rest, which I think is what he was getting at. (And student debt should be structured so they’re not repaid unless that income materialises)

(My point in the OP, is that we shouldn’t base ideas on who is rich, or not, by their location in the static household income distribution).

More posts by Luis Enrique please.

7. George W. Potter

While it’s not the subject in hand, I favour the NUS proposal for free university education which would be funded by a graduate tax.

Back to the topic in hand, a very good article. More of the same please.

“While it’s not the subject in hand, I favour the NUS proposal for free university education which would be funded by a graduate tax.”

So you like the system we have currently, is what you’re saying?

“dismissing students as not worth bothering with completely overlooks the very real problems people from low incomes face in trying to go to university”

I don’t know if this was what John was getting at, but my take on his post was that students have a lot done for them right now. There are zero access barriers in to university, the only current problem with the system is that it ensures a student incurs large debt. But essentially, at the point of delivery university is actually roughly as easy to get in to if you’re a straight A working class person or a straight A upper class person from a financial perspective. Student Loans Company incompetence not withstanding.

With all that said…the leftist cause is really not putting it’s efforts to best use if they want to concentrate on helping students to get *more*. Support them in what they are currently getting, hopefully improving upon it, but there are definitely much bigger areas of inequality that need to be tackled right now.

As I’m an old bastard I feel that uni education should be funded through grants.

As for lefties just looking after one or two sections of the society we all live in, daft – lefties should look after all society inclusively.

I think it should be funded through grants too, but I don’t think that’s a particularly lefty policy, not while it hands state money to the rich.

Lee: this is my difficulty with the left/right argument – what we are talking about is the education of children/young adults. And in so doing, the future of our society as a whole. Even though most(?) of those rich kids will go on to support the Tories some will have a heart and support progressiveness in society. Do we just condemn them because their parents are rich?

We have to look at where the dividing line is, do we stop grants to households on 35k, 45k, 60k a year? Will this mean a little more of a tax burden on those who can afford to pay? Quite, but all those who go to uni should go through the grant system. It is insanity that a wealth country such as the UK in-debts those kids before they have done a days work – only for them to pay taxes AND pay a portion of banks profits.

13. George W. Potter

@8

“So you like the system we have currently, is what you’re saying?”

No.

At the moment students have to pay tuition fees, we can borrow this money but it does have to be paid back. That said, if we complete our degrees then that isn’t likely to be a problem.

However, when we look at the other aspects of university such as accommodation and living costs, etc. students like me simply cannot afford to go to university. The only reason I [i]can[/i] afford university is because my university uses a substantial chunk of tuition fees to offer bursaries to those on low incomes. Their bursaries are substantially larger than the minimum they are required to offer. Were they to offer a minimum I would be unable to afford to go to university. That’s the bottom line.

Removing tuition fees and offering a grant to study (to cover reasonable living expenses) would allow true access for all with the ability and could be funded without additional cost to the public purse (in fact a reduced cost overall) in the long run by a small tax on the earnings of graduates. [i]That[/i] is what the NUS proposed. That is most definitely not the current system.

14. Charlieman

@1 John B: “(**) the government should endorse mortgage release schemes, so that rich old people stop thinking they’re poor.”

I’m surprised at you, John. Equity release schemes have been around for years; my mother’s care home fees are funded by the local authority secured by a debenture on the eventual sale of her flat. Many of the early equity release schemes were lousy for the mortgage holder, sometimes to the extent of fraud. Thus there is a bad odour surrounding equity release, which is a pity owing to the benefits (eg my mother’s case) that honest schemes could provide.

@OP, Luis: “For example, say one is a bus driver and the other a hospital orderly.”

The income figures sound reasonable to me. Bizarrely, you’ve picked two occupations that would have been 90%+ public sector jobs in the 1970s. Associated with the modest income would have been a modest pension package. Some public sector employees in the 1970s and 1980s (and possibly today) could take on a long term mortgage in their late 40s, knowing that their pensions would cover it. That’s another angle on life term earnings.

12. I happen to agree with you and 13, no doubt.

I wonder how much UK business would be prepared to put in if they knew they were getting a better student out of the system in the end? I have heard that businesses don’t mind about there being a lot of good graduates (why would they, it drives down wages) so perhaps they should put their money where their mouth is. Though clearly they’d be loathed to do so while students are able to do “less productive” degrees.

“It is insanity that a wealth country such as the UK in-debts those kids before they have done a days work – only for them to pay taxes AND pay a portion of banks profits.”

This argument has actually become less relevant over the last decade or so because we all operate on debt, and no doubt will continue to do so long after the recession. It seems a bit odd to argue that young people should be preserved as these unsullied debt-virgins when as soon as they get out of university (or even during) they get credit cards and car loans and mortgages flung at them just like everybody else. The problem is in debt culture in general, not this particular debt at this particular time.

Also, I’ve never been quite sure why £15k of debt is somehow completely intolerable while £7k of debt represents utopia, (which was what I left with having not paid tuition fees), especially when the terms on both are fairly generous. No-one’s going to kick your door down to recover either of them the way they are your credit card. The more valuable arguments lie with the principle of free tertiary education than the “saddled with debt” thing.

The only issue that I remember from my University years, and would be amazed if it’s different now, is how much it costs to suddenly become independent and how much of that needs to be found through employment. Tuition fee’s being free would be ideal, but I think we could all happily live with a reasonable tuition fee that needs to be paid back interest free…as long as we didn’t feel that halfway through our education we had to drop out because we couldn’t afford to actually live.

To me it would be as step in the right direction if at the very least the system didn’t raise the tuition fee any higher but did increase the student loan to a more acceptable level (something like a 20% rise in loan value).

But on topic, I think this kind of post is really good. We need more sense when it comes to the numbers, especially during this time when politicians and hardcore supporters are willing to bend the facts to push their policies.

Yes indeed. Breaking down lifetime earnings, consumption, carbon footprint etc are more likely to give meaningful figures than snapshots.

A good article, as others have said. More please!

20. Charlieman

@17 Le Griffin: “The only issue that I remember from my University years, and would be amazed if it’s different now, is how much it costs to suddenly become independent and how much of that needs to be found through employment.”

Is that not part of the process of higher education for young people? Budget, work and academic time management?

And if you can’t cope with that scenario (which is ridiculously easy for those from a wealthy background to accommodate), can you take a break?

Charlieman: There is certainly an element of budget and time management, but if you’re going in to higher education it’s to learn…what benefit is there to the country to throw money at a student only to have them fall down because they MUST work to be able to afford to live and it detriments their studies? So that you can feel smug about the downfall of an individual put in to impossible circumstances?

If kids are going in to HE it’s to learn, and we should be providing (even if it is only a loan, at the least) all the money they require to pay their rent, pay their bills and buy enough food, otherwise we’re just wasting money.

“And if you can’t cope with that scenario (which is ridiculously easy for those from a wealthy background to accommodate), can you take a break?”

The wealthy ones aren’t the ones that need the help. My understanding is that you can take a break but there isn’t a guarantee of you being able to get back on to the course due to the contracting funding for HE. Either way we’re risking throwing money down the drain because we’re not prepared to ensure that at the very basic level students can live their lives and learn.

Any other person without a job would get a benefits payment and have their rent paid for them, students are given a loan that doesn’t even cover the same amount. I won’t get in to it, as it’s more of a personal opinion; but the way students are treated with regards to the job market, ending up mostly in temp jobs with less rights than other workers and the poorest pay, is disgraceful exploitation of the position they’ve chosen to go in to and learn better skills and knowledge that, ultimately, benefits the entire UK economy.

I think there is a great deal of truth in this. More and more with the state of the housing and job market it seems to me that life chances are inherited by the ability of parents to support children through education, support young adults through their first jobs and then give them a deposit or security to buy a house and join the gravy train. Their actual income during this period is not a very important factor.

I really don’t know what to do about it….

23. Charlieman

@21 Lee Griffin: I tend to agree with you, but I am less confident about what to do about it. I start from the presumption that central government declaring that whatever percentage of 18 year olds should enter HE is a folly. I believe that continuing education is better for people and for the economy than drafting an arbitrary number of kids into universities immediately after their A levels. Genuine continuing education is seriously expensive and should not be regarded as the cheap alternative to a three year degree course. Proof of my beliefs, of course, requires a cultural change and a series of governments that are committed to adult educational reform.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Data abuse http://bit.ly/an9e7C

  2. Lee Griffin

    So @leftfootfwd still confused on definitions, maybe they should go to http://bit.ly/an9e7C and see how misleading they're being.

  3. Mark Davids

    Liberal Conspiracy » Data abuse: It could be possible to argue that households in this region of the income distri… http://bit.ly/bKCfTD





Sorry, the comment form is closed at this time.