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Consequences of inequality on semantics

by t-------------- Tue May 4th, 2010 at 08:38:30 AM EST

This post is inspired by a comment that I read from talos concerning how pensions are low in Greece.

I want to talk about wealth inequality (could be inequality of power or status or whatever, but I am concentrating here on the common definition).

One thing will be uncommon, though: inequality tends to be discussed from a class perspective - that is the underlying assumption most of the time. Sometimes people talk about inequality among nations. Sometimes about inequality inside regions of a nation. Rarely is inequality discussed from an INTRA-class perspective. I will use here the INTRA-class example. The fact that I, a Portuguese (ie, coming from an highly unequal European society) care a lot about INTRA-class issues is by itself, as I intend to show, a demonstration that I come from an unequal society.

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Societies that are highly unequal might suffer from only a subset of the above. But I would speculate that they probably suffer from most of the perspectives above, maybe even all. Or even from many added others (gender, race, ...)

The main argument that I want to present is that unequal societies are more difficult to understand and require more difficult and complex solutions.

Case one: What is a teacher?

Think about a teacher in your country. Does (s)he make enough to live? Takes a fair sum for work?

A teacher in Portugal, in the top bracket makes around 3100€/month (14 months). My partner, herself a teacher, makes around 500€/month. How? Cannot get a complete time-table and is payed in one of the lowest brackets. Also, every year she has to apply to a new position and it is possible not to get one. In fact she never got one in September, normally staying 1 or 2 months unemployed (again, could be worse - not getting one at all for a full year).

In order to continue my reasoning I would say that, outside of Lisbon, it is possible to have a decent life with 1000€/month (I have lived with that in Porto, know from personal experience).

So, what to think of a teacher's salary? Is it low, it is high? I would argue that inequality makes the answer hard. It also makes policy hard (with the added problem - in this particular case - that unions represent more the top brackets than the lower ones): If you cut 10% of a salary of 3100, that might be acceptable, but might condemn to misery someone living on 500€. So, a reasonable salary cut would have to be more carefully thought than in cases where the variation is more contained.

When such inequality is present, we simply cannot talk of "teachers", as we risk talking of completely different realities. As an information token, the word "teacher" lost value.

Now, if even talking about "teachers" in the media over-simplified and over-manipulated reality is difficult now imagine trying to discuss all this heterogeneity.

Case two: pensioners

Here I am just going to present my grand-father and my father (both getting a state pension): My grand-father makes ~200€/month. My father ~1500€ plus he still works free-lance for his old employer (Allianz) making probably not much less every month with free-lancing (though variable).

Conclusion

In a more unequal society, a rational analyser and decider will have to undergo a more complex cognitive process to deal with the heterogeneity caused be inequality: Looking at medians and means is not enough, full distributions will have to be more closely understood and monitored. Quantitative differences will have stark qualitative outcomes and spill-over effects (externalities) to other areas.

For me, with my background, listening the word "teacher" informs me very little: Do you have enough to eat a proper set of meals every day? Probably yes, but it is not assured. A nice place to live? I really do not know. Are you upper-middle class? It can happen, I know quite a few cases. For me a "teacher" can be all of this. It makes my cognitive perception more complex.

PS - There would actually be a way to start tackling this: high progressivity in taxation. But no "serious" person would propose such a thing...

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And for you, with your specific background, is the word "teacher" more informative?

[Replace "teacher", by whatever social discriminator you fancy]

by t-------------- on Sun May 2nd, 2010 at 12:05:58 PM EST
Inequality is a question only about two things. About ownership and privileges. That is the way it is today and that's the way it has been in history. The one who only has his/hers labour to sell is poor, the people with property and privileges are wealthy.
It is really only about one thing: the difference between earned and unearned incomes. Wages and profits from production of goods and services vs. rents and monopoly rights. This is not a complicated issue.
by kjr63 on Mon May 3rd, 2010 at 06:44:34 AM EST
Nice theory. Interestingly, my grandfather according to this theory, is partially rich: He does not have to sell his labour anymore to get his income.

In practice, in the real world, I suppose some extra complexity kicks in.

by t-------------- on Mon May 3rd, 2010 at 01:14:16 PM EST
[ Parent ]
In practice, in the real world, I suppose some extra complexity kicks in.

Sure. Like Vilfredo Pareto said, A-class should make B-class to believe, A-class earns their money. So "complexity," provided by media, historians, "sociologists" and economists is very much welcomed.

by kjr63 on Tue May 4th, 2010 at 05:38:20 AM EST
[ Parent ]
So, you suggest that the quality of life of a 500€/month earner is the same as a 3000€/earner?

Yes, I know that in theory they are both wage slaves.

But, if there is a need to cut, are they in the same class?

I would argue that, what is currently bought with 3000€/month makes that said salary unsustainable from a planet-wide perspective (resources).

If everybody made 3000€/month and had the ability to acquire resources equivalent to it, we would need probably 5 or 6 planets.

You seem to be fixated in the word "teacher". I seem to be fixated in an income difference (and job security is also qualitatively different) of 6x.

It in fact happens in the teaching profession in Portugal: rules that feel very good for part of the class, are pretty bad for another part.

While that black and white view of oppressors and oppressed seems to make sense, it does not preclude a complementary view that things can be a bit more complex than that.

by t-------------- on Tue May 4th, 2010 at 04:34:31 PM EST
[ Parent ]
So, you suggest that the quality of life of a 500€/month earner is the same as a 3000€/earner?
Yes, I know that in theory they are both wage slaves.

It depends what are their living costs. How much they have to use for basics and how much they can afford to spend.


But, if there is a need to cut, are they in the same class?

Neither needs a cut. But obviously the former needs a rise and the latter enjoys privileges the former does not. But both are small fish.


I would argue that, what is currently bought with 3000€/month makes that said salary unsustainable from a planet-wide perspective (resources).

That salary planet-wide for teacher is not unsustainable. The value created by labour is no less sustainable in the form of wages as it is in the form of rentier incomes.


If everybody made 3000€/month and had the ability to acquire resources equivalent to it, we would need probably 5 or 6 planets.

With such average incomes, wage earners would collect (and would have collected a long time ago) so much savings, that the supply of labour would diminish. And so would production. The more there are "workers" the more there is production and consumption.


You seem to be fixated in the word "teacher". I seem to be fixated in an income difference (and job security is also qualitatively different) of 6x.

I am also fixated in income differences. The problem only is that it is fruitless to focus just on wage earners. Why is it that they are bickering with each other? The mice are fighting for scraps. Job security comes from functioning markets and social justice. IMO there is no shortcut.


It in fact happens in the teaching profession in Portugal: rules that feel very good for part of the class, are pretty bad for another part.

Yes. In Finland Unions protect mostly just labour market "insiders." Outsiders they kick in the face.


While that black and white view of oppressors and oppressed seems to make sense, it does not preclude a complementary view that things can be a bit more complex than that.

They are not complex economically. But politically.

by kjr63 on Wed May 5th, 2010 at 06:35:55 PM EST
[ Parent ]
Pensions are more or less deferred payments on selling labor. I think the expenses for childhood and education should be viewed accordingly.

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by A swedish kind of death on Tue May 4th, 2010 at 08:16:28 AM EST
[ Parent ]
Contractual or optional pensions from employers, sure its deferred payment for labor.

Social insurance pensions? Not so much.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue May 4th, 2010 at 11:18:05 AM EST
[ Parent ]
It seems to me that for most jobs or professions, there's a pretty clear market pricing system in place. Teachers don't get paid much because society (stupidly) doesn't value them too much. Don't like it? Become a computer programmer.

The problem is the corporate executives who have interlocking compensation committees, a small community of moochers agreeing with each other that they are worth thousands of times as much as teachers.

by asdf on Tue May 4th, 2010 at 10:54:37 PM EST
It seems like you have set up your market pricing system with horizontal demand curves, in order to have a single, supply-independent "value" placed on any profession by "society".

But in the US, most teachers are employed in publicly funded positions, and most computer programmers, not.

Teachers in the US know that they are not going to get rich, and so those who are primarily driven by income opportunities do not enter the profession. And of course, some would be cheap at four times the salary and others would be worth giving a raise to get them out of teaching.

But the "demand" is not an amorphous mass of consumers with the marginal consumer wanting education provided hiring the marginal individual willing to do so at the wage just sufficient to get them to work - it is an organized process of determining qualifications and requirements and recruiting students into education degree programs and then placing them in school and then a highly politicized process of bargaining between the teachers and the school and the funding government(s).

Indeed, the "customers" in K-12 education are required by law to be there and are not charged (except of course in the US for a whole host of side fees and charges because of highly politically organized refusal to provide effective public education across the board).

Its as far from a market mechanism as the pay for CEO's, the difference is the institutions o depress teacher's pay and the institutions to inflate executive pay.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue May 4th, 2010 at 11:50:14 PM EST
[ Parent ]
I happen to be a computer programmer by training. And have been a teacher.

In my country, the average computer programmer makes less than the top teaching position. It makes around half of it.

Intra class inequality makes inter class comparisons hard.

by t-------------- on Wed May 5th, 2010 at 07:15:15 AM EST
[ Parent ]
You need to move to 'merica. An entry level programmer--really web site developer--without any sort of degree but some degree of fluency in Java makes around $35,000 per year. A high school teacher with ten years of experience and a master's degree in biochemistry makes around $50,000. And you need at least a BA even to be a teacher.
by asdf on Wed May 5th, 2010 at 09:57:51 PM EST
[ Parent ]


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