Category Archives: Life

Income Inequality, The GINI and Marriage

I continue to question the GINI calculation comparison of nations in order to determine how well wealth is distributed within those nations.  For example, I have a specific problem with the fact that the United States has seen a significant rate of marriage decrease in its population over the last several decades.

As an example, I used a population of 4 and computed the GINI if they were all single:

24,000 – 30,000 – 50,000 – 75,000  The GINI came to .24162

If we marry 2 of those we might see:

24,000 – 50,000 – 105,000 This GINI is .301676

If we marry a different 2, we might see:

54,000 – 50,000 – 75,000 This GINI is .093110

Clearly the makeup of the population impacts the GINI coefficient.  In this analysis, I was called on small sample size.  Fair enough.  I did the data on a population of 10,000.

I took a random sampling of 10,000 salaries.  These salaries ranged from $0.00 to $250,000 and formed a near perfect bell curve with an average of $125,000.  Clearly this is not how wealth is distributed in real life, but I am simply making a point.

I then created 4 worlds.  Each world had a different marriage rate; 80-70-60-50%.  An acknowledge flaw in my data is that I do not randomize the single people each time.  That is, in the first world where 80% of the population is married, I take the first 2,000 and mark them single.  I then marry the 2001st individual to the 6,001st individual.  Then the 2002nd individual to the 6,002nd individual and so on.

My results:

  • 50% Marriage:  .3446
  • 60% Marriage:  .3353
  • 70% Marriage:  .3227
  • 80% Marriage:  .3015

As the marriage rate went up, the GINI went down.  In other words, as my population increased its marriage rate the inequality diminished.  In fact, by moving from a 50% marriage rate to an 80% rate, the GINI moved by 12%.

Let’s do it again.  10,000 new salaries, same constraints:

  • 50% Marriage:  .3471
  • 60% Marriage:  .3416
  • 70% Marriage:  .3248
  • 80% Marriage:  .3093

Again, a continuing trend toward equality.

Does my theory have legs in the real world?  I think it does:

Inequality is typically higher as the percentage of married people declines and as the correlation of of partner’s income increases.  Inequality also tends to be higher when low-income earners are disproportionately likely to remain unmarried.

In other words, the more people marry, the more equitable income is.  Especially when this trend is observed in low income individuals.

Further data suggests that poverty is addressed by marriage:

As expected, the results clearly show that married parents experience lower poverty rates and higher incomes not only than single mothers living without another adult, but also among those unmarried mothers with at least two potential earners. Poverty rates of cohabiting couple parents are double those of married parents; non-cohabiting single parents with at least a second adult had poverty rates three times as high as among married parents.  The apparent gains from marriage are particularly high among black households.

The gains from marriage extend to material hardship as well. About 30 percent of cohabiting couples and 33-35 percent of single parents stated that sometime in the past year they did not meet their essential expenses. These levels are twice the 15 percent rate experienced by married parents. Even among households with similar incomes, demographic and educational characteristics, married couples suffer fewer serious material 21 hardships. Moreover, despite their less promising marriage market, low-income and less educated mothers who are married experience significantly less material hardship than lowincome,
less-educated mothers not married.

In short, marriage matters.  And for whatever reason, the United States is becoming a less married nation.  If you wanna address poverty, inequality and hardship, focus on getting people, especially low-income people, married.  Failing that what you are doing is transferring wealth from one population to another in an attempt to “wish” you way out of reality.

 

Private Christian School

I’ve mentioned before that I have some history with the public schools.  In addition to attending a small public school in Minnesota, we had one elementary school, one middle school and one high school, my dad taught in that system.  I went on to college to become a teacher and then I taught in an even smaller public school system.  This district consisted of three small rural towns.  One town had the elementary school, another had the middle school and finally, the third town had the high school.

I’m a big proponent of state mandated education for our children.  And I’ve been a big proponent of the public schools.  However, as my children age into the system, the shine is wearing off and I’ve begun to see massive flaws in the system.

At the end of last year, my wife and I finally decided to pull our kids out of the public schools.  Substandard results with substandard management with substandard teachers was going to be the normal fare for the next 13 years; we already had 3 in and the light at the end of the tunnel wasn’t getting any brighter.

When we started shopping for a private school we didn’t really care if the school was religious or not.  All we really wanted was stability,  a strong emphasis on achievement, a leadership focus and a sense of community.  In the end, we choose a school as much for the community as for the achievement of it’s students.  Perhaps we’re lucky in that we have a great school so close to our neighborhood.  In any event, the school is Christian; non-denominational, but Christian.

As I mentioned, I grew up in rural Minnesota.  It may sound strange to say, but while religion is a big part of the culture there in on prairie, it’s a very private kinda thing.  It’s not the type of religion people see on TV.   There is no gospel choir, there is no fire and brimstone, there’s no speaking in tongues.  People don’t go around proselytizing.  In fact, churches in Minnesota are able to save money because they don’t have to build the first three rows of pews [the joke is that good Lutherans don’t sit up front].

I’ve been to church all the way from Seattle to Wilmington.  I’ve seen a lot of it.  And in Minnesota there isn’t the holding of hands during the Lord’s Prayer.  We never hugged people while sharing the peace.  Like I said, religion is a private kinda thing.

All of which contributed to my surprise when I attended our school’s varsity basketball game last night.  It was a blow-out.  Our guys beat ’em by 40.  The other team was frustrated, tired and beat up.  Tempers were beginning to flare.  When the buzzer sounded I started to get the kids into their coats and get ready to go.  However, after the players shook hands they all made their way to center court where coaches, cheerleaders, officials knelt and bowed their heads in prayer.

It was powerful.

I love our new school.

 

Marriage In The United States Of America

Last month I made a claim that one of the reasons the GINI coefficient, a measure of the disparity in income, is not telling the whole picture in America is that it doesn’t reflect the true concept of households.  I made the case that:

For example, you could take 4 people with incomes described as:

  1. $24,000
  2. $30,000
  3. $50,000
  4. $75,000

The Gini coefficient for the above data is .24162

Now, marry two of those wage earners:

  1. $24,000
  2. $50,000
  3. $105,000

The Gini coefficient for THAT data is .301676.  Without ANY income changing at all, the Gini increases by 25%.  In other words, the same number of people are working the same number of jobs and earning the same number of dollars.  The only difference is the method by which they calculate the Gini.

Nickgb over at Poison Your Mind called shenanigans.

You are taking a nation-wide economic statistic, applying it to a population of four, then three, and drawing conclusions as to its usefulness?

Certainly my math was simple.  It consisted of a population of 4 individuals.  Clearly this was just a demonstration of what could or might occur in a larger group.

However, since then, we have learned that a record number of Americans are unmarried:

Barely half of all adults in the United States—a record low—are currently married, and the median age at first marriage has never been higher for brides (26.5 years) and grooms (28.7), according to a new Pew Research Center analysis of U.S. Census data.

In 1960, 72% of all adults ages 18 and older were married; today just 51% are. If current trends continue, the share of adults who are currently married will drop to below half within a few years. Other adult living arrangements—including cohabitation, single-person households and single parenthood—have all grown more prevalent in recent decades.

Certainly there is nothing wrong with people deciding that they would rather enjoy life’s treasures as a single person rather than a married person, but it is also true that when measuring household income using the GINI coefficient, a drop in marriage rate of 33% will impact the results.

 

Minnesota Metro Transit Bus Drivers: Pay And Overtime

A recent analysis of bus drivers for the Minnesota Metro Transit system provided some interesting data:

  • Base pay for drivers is nearly $50,000 a year.
  • The top earner in the system made $120,000 a year.
    • He did this by working, on average, 74 hours a week.
  • Overtime in the system has jumped by 52 percent from 2008 to 2010.
  • A driver on overtime – paid at time and a half – saves Metro Transit $4 an hour on average.
    • This due to the fact that the agency would have to pay for training, additional benefits and pension.
  • A union agreement says that no more than 24 percent of Metro Transit’s workforce can be part time – prompting the agency to turn to overtime.
  • In October, 89 percent of weekday overtime assignments were during rush hour and lasted less than three hours.

The incentives are undeniable.  For a system that demands flexibility; traffic doesn’t occur in neat 8 hour blocks, the rules prohibit the proper response.  Further, regulations surrounding benefits, those benefits that include vacation, retirement and health care, make it more cost effective to work an already employed person than to hire someone else.  And lastly, being a Metro Transit driver isn’t all that bad; 50 large is a good deal of money.

Finally I’d like to point out that for at least one of these drivers, the overtime is a feature and not a bug.  And it’s a feature because of decisions HE’S made in HIS life:

Lance Wallace is happy to drive a few extra hours if it means his wife can stay home with their four children – all younger than 5.

The New Hope man is among the top 5 percent of overtime earners at Metro Transit. Picking up extra shifts and working nearly every day, he averages 60 to 70 hours a week. The $37,700 in overtime he earned last year pushed his total earnings to $86,400.

“I don’t really want to work overtime,” Wallace said. “But I do it to make up the income.”

The extra work doesn’t make him “overly tired,” Wallace said. In fact, after working two jobs before, he “feels good” to now work where he can dictate his own hours.

Mr. Wallace is a father.  A father of FOUR.  A father of FOUR in a family that has the mother stay home.  And of those FOUR kids, all are younger than 5.  And this father of four young children is happy that he’s able to work the hours he does in order to prevent having to carry two jobs.

My point?  Incentives matter.  Raising the cost of hiring means that you will see less hiring.  Wage earners will enjoy working more hours if it benefits them, not the other way around.  Government union work pays well.  People who have 4 kids in 4 years time have a more limited ability to dictate their time.

Pino’s Law: Travel Mugs

For any trivial number N greater than 2 travel coffee mugs, there will ALWAYS be N-2 dirty non-dish washer safe mugs available on the counter.  Further, there will be N-(N-2) dirty dish washer safe mugs in the dish washer.

There is no counter example to this law.

Ever.

Corollary One:

Buying more Travel Mugs does not increase either:

  • The number of clean mugs
  • The chance any mug will be clean

It only increases the number of dirty Travel Mugs at any time.

Kidney Transplant

So, I’m reading a story about an illegal immigrant who is struggling to obtain a kidney transplant.  He has a donor; his brother.  But the system doesn’t allow illegal residents transplant care.  Lifetime dialysis?  Sure.  Transplant?  No.

Anyway, I’m sure I read this somewhere, but it occurred to me that of all the people in the kidney transplant process, the doctors, the hospitals, the nurses everybody, the only person who isn’t compensated for his time and effort is the guy that loses the kidney.

Isn’t that weird?  Maybe if we allowed people to sell their spare kidney we wouldn’t have so many people waiting for a kidney.

Greed, Capitalism And Charity

In the same way that the Left characterizes climate skeptics as loons, educational reformers as child haters and minimum wage advocates as haters of the poor, the Left characterizes free-market capitalists as greedy bastards.  Any support shown for a system that rewards the successful is immediately attacked as shilling for the rich.

Wanna reduce taxes on corporations because corporations will move to where there are lower taxes?  You support corporate welfare.  Wanna create laws that allow businesses to hire, and then fire, the most qualified and least productive?  Then you don’t care about the poor and disenfranchised.

With all the tribalism in today’s politics you can’t get the concept through the noise.  You’re unable to penetrate the distinction between “my side” and “your side”.  It’s more important to win than it is to create a viable path forward.  I see this often in corporate America.  I see competing managers championing their idea to the detriment of the team.  I feel I’m witnessing the same thing here in our politicians.  It’s more important to “win the debate” than to actually be right.

Because of this, because the Left vilifies all those who want to create a system that rewards the producers while removing the ability to destroy value from the ineffective managers, we will never be able to have a reasonable debate that typically successful people are reasonable people who, as it turns out, love other people:

The donor whose $350 million gift will be critical in building Cornell University’s new high-tech graduate school on Roosevelt Island is Atlantic Philanthropies, whose founder, Charles F. Feeney, is a Cornell alumnus who made billions of dollars through the Duty Free Shoppers Group.

Mr. Feeney, 80, has spent much of the last three decades giving away his fortune, with large gifts to universities all over the world and an unusual degree of anonymity. Cornell officials revealed in 2007 that he had given some $600 million to the university over the years, yet nothing on its Ithaca campus — where he graduated from the School of Hotel Management in 1956 — bears Mr. Feeney’s name.

The $350 million gift, the largest in the university’s history, was announced on Friday, but the donor was not named. Officials at Atlantic Philanthropies confirmed on Monday evening that it was Mr. Feeney, a native of Elizabeth, N.J., who is known for his frugality — he flies coach, owns neither a home nor a car, and wears a $15 watch — as well as his philanthropic generosity, particularly to medical research.

It turns out that capital, in the hands of the skilled, produces significant value to all the world.  And, as a reward, the capitalist acquires significant wealth as well.  And then, in the end, he often gives that wealth away.  As if to say, “I have come, I have made a difference and now it is time for me to give it all back.”

 

College Education: Which Majors Pay The Most

So, a little bit of live blogging.  Last week in the comments I posited that the highest paying Majors were not the Majors that graduated the most students.

Let’s look.

According to Time, the top 10 paying Majors are:

Highest-Earning Majors

Thoughts?

7 of the top 7 Majors are engineering.  8 of the top 10.

The other two are very technical majors.

Graduates?

Top 10 Most Popular Majors:

Most Popular Majors

  • Business Management and Administration
  • General Business
  • Accounting
  • Nursing
  • Psychology
  • Elementary Education
  • Marketing and Marketing Research
  •  General Education
  • English Language and Literature
  • Communications

Not one in common.  Not one.

My advice to Occupy?

Go to school and study a discipline that pays.

The Hard Makes It Great

I’m always looking for ways to get an edge in parenting.  I love little stories that I can use.  I enjoy toys that tell a story.  And I really Really look forward to sharing pivotal scenes from movies.

I can’t wait to start the tradition of watching “Miracle” this coming February 22nd.  I look forward to the day when I can watch “Old Yeller” with my son.

I’m watching “A League of Their Own” right now.  And this is one of those scenes:

The hard makes it great.

Damn.

Brad and Britt And Glass Houses

So, two months ago local talk radio show hosts were taking phone calls on their show.  The guys at Brad and Britt are Liberal.  I don’t think that they’d object to being described as left of center.  Anyway, they took this call from a listener and it turned out he subscribed to the more conservative point of view.  Britt, clearly having taken the opposite point of view went into his “Little Rush” imitation.  This is where he puts on Rush’s radio bumper music and does a fantastic impression of Rush.  By itself, Little Rush is hilarious and spot on, using it to yell over an earnest caller is obnoxious.

I called him out:

That Tweet got me “blocked”.

Meanwhile, Britt feels it’s totally appropriate to call out Neil Boortz in a much less polite tweet:

This is how the Left rolls.  Free speech for me, censorship for thee.

 

UPDATE:

It would appear that The TalkMaster blocked Britt months ago:

Not sure that this makes any difference what-so-ever, but Britt felt it was important to include.

Done.