All posts in Articles & Interest

Sufferin’ on a Jet Plane

While we at Wagemark are by no means mind-readers (yet), we’re willing to wager that many of you spent time on airplanes in the past week. The last days of December routinely beat out those notorious dates bookending American Thanksgiving for peak airline travel in North America, and while we don’t have the numbers to prove it, it’s likely Holiday Season 2014 wasn’t the exception. Which means, according to the New Yorker, you likely incurred some variety of benign trauma up a mile high in the sky—just as Big Air intended.

In case you missed it, flyer-friendly airline JetBlue finally entered its competitors’ realm of requisite customer ambivalence this fall, following accusations by Wall Street analysts of being (to paraphrase) insufficiently horrible to the people it purports to serve. Forget leg room and complimentary WiFi—airlines now are all about those fees, not service.** How do they get away with it, you ask? By deploying, as writer Tim Hu argues, an ethos of “calculated misery” that establishes a baseline flight experience so actively punishing to its average economy class ticketholder that people will grudgingly opt to pay extra as a means of softening the blow. And, while these fees might increasingly coincide with fare decreases that ultimately allow for more people to fly to more places, the consequence is a steerage class experience of sorts for the bottom tier of flyers.

Hu concludes:

Ultimately, the fee models and the distinctions they draw make class inequality, which may be felt less in other places, painfully obvious. The conditions of carriage may lack the importance of other, more pressing social issues. But when an airline like JetBlue is punished for merely trying to treat all of its passengers decently, something isn’t right.

Meanwhile, a different kind of inequality showcase recently took place at Midtown Manhattan’s St. Bart’s Church, where Park Avenue elites enjoyed a $100-per-plate sit-down dinner with over 200 homeless New Yorkers, which…nice? Performative? Unhelpful? Maybe all of the above, but moreover, the event served to underline its own futility.

We promise, this makes sense.

As New York University history professor David Huyssen points out, 2014’s St. Bart’s dinner was not without historical precedent; similar feel-good charity dinners were hosted on Christmas 1899 and 30 years later at the onset of the Great Depression. Homelessness in New York has, meanwhile, reached an historic high that actually surpasses rates that coincided with those charity dinners of yesteryear. Some St. Bart’s dinner attendees even faced police harassment on their way to partake in their holiday supper. The irony of the dinner, then, was precisely in how it demonstrated the need for structural overhaul to combat inequality to any measurable long-term effect. As Huyssen writes, “If history is any guide, private charity will never suffice to meet basic needs in America.” It’s likely this dawned on some of the St. Bart’s diners as they returned to their respective chandeliered drawing rooms and makeshift sleep sites.

Finally, Suzanne McGee at The Guardian summed up “the five major things we screwed up in inequality in 2014.” One key pain point: Income Inequality.

“While everyone this year seemed to walk around clutching a copy of Thomas Piketty’s Capital in the Twenty-First Century and to have an opinion on its contents, and the phrase “income inequality” at least became a buzzword, nobody seemed to agree on what could or should be done,” McGee writes, adding that while even millionaires echoed the prevailing concerns, few seemed willing to actually support more equitable income distribution through progressive taxation models or—heaven forbid—pay caps. Private charity (sound familiar?) seemed to be the wealthy’s inequality solution of choice. Which, fine. But maybe, McGee counters, inequality is a serious enough policy concern to grab by the horns in the New Year, and “one we can’t afford to leave to the personal whims of wealthy individuals.”

And there you have it.

**Life Hack: Superimpose grim points of information onto kicky pop hits!

The twelve days of financial hemorrhage (and hope for the antidote)

It’s that week in between Christmas and New Year’s! Bah humbug? Well, actually, sort of. The Montreal-based Centre for Research on Globalization estimates that “the twelve days of Christmas [in the U.S.] now cost $27,673.” You might even say it’s the most unequal time of the year.

But maybe there’s hope: Economists at TD Bank in Canada have recently released a report on the dangers of the widening income divide, titled “The Case for Leaning Against Income Inequality.” The report recommends public investments to reduce inequality, though falls short on recommendations for how to fund such initiatives; as the Toronto Star points out, the closest it comes is “a passing and unenthusiastic reference to increasing income taxes on the top 1 per cent of earners, and a revealing omission of any mention of corporate taxation, non-salary compensation or CEO salaries.” Still, when economists at Canada’s largest lender begin waving red flags around the wealth gap, it’s awfully tough to look away.

Long a central focal point of American fixation (and disagreement), public awareness of inequality in Canada is gaining steady momentum. Alex Himelfarb, a former clerk of the Privy Council Office of Canada, told the Globe and Mail—when asked what keeps him up at night—that inequality is his “number one issue” of concern. In particular, he singles out austerity as the culprit for a “kind of trickle-down meanness,” adding that “capital always talks louder than labour – that’s why it’s called “capitalism” and not “labourism” – but now the bargaining power of capital is through the roof. So money talks louder than ever.” But this, Himelfarb argues, is socially corrosive and politically suppressive, quashing any sense of faith in collective action.

David Lammy would likely concur. The British MP, and Labour hopeful for the London mayor’s seat in 2016, predicts that direct action to combat inequality in the UK is required to prevent more riots like those that rocked the island during the summer of 2011. Lammy points out that with one and four young people unemployed in London and wages continuing to stagnate, “it’s becoming increasingly difficult to get on the housing ladder and face rising rents.” What results is a pressure cooker scenario, with conditions ripe for combustion. He adds: “It’s easy and crude to blame these problems on immigrants,” and recommends wage increases and rent caps as policy priorities to start with. Better that than violent unrest—an inevitability under current conditions.

Holiday spending, racial wealth gaps, and the truth about Monopoly

All of a sudden the holidays are here in earnest, greeting us with all the subtlety of a Whack-a-Mole mallet to the funny bone. In this consumer-driven season, the dynamics of income inequality are brought sharply to the fore from the moment Americans begin lining up for Black Friday sales—an annual ritual chided by many as a tacky celebration of conspicuous consumption, but which others rightly point out is a one-off opportunity for low income individuals to experience the purchasing power of the middle and upper classes.

Maybe during this final week of frenzied pre-Christmas shopping, some intrepid holiday gift-buyers will be purchasing board games for those of their loved ones whose attention spans have not yet been eviscerated by the onslaught of open Internet browser tabs and iPad apps. What both buyer and recipient might not realize is that arguably the most famous of these, Monopoly, is itself designed to deliver a lesson in income inequality.

The author Mary Pilon gives a short synopsis of her new book, The Monopolists: Obsession, Fury, and the Scandal Behind the World’s Favorite Board Game in Smithsonian Magazine’s January issue. Her research showed that while the game was released during the Great Depression by “a down-on-his-luck family man named Charles Darrow,” its origins date earlier—to an early-20th century aritist-writer-feminist named Lizzie Magie, who wanted to teach people about the evils of haves lording wealth over have-nots. Pilon writes that Magie told a reporter in 1906: “In a short time, I hope a very short time, men and women will discover that they are poor because Carnegie and Rockefeller, maybe, have more than they know what to do with.”

Then again, the year’s best-selling business book list suggests that maybe we’re beyond the point of requiring board games to school us on the wrongs of vastly unequal wealth distribution. As NPR reporter Marilyn Geewax points out, the business books that tend to sell the most copies are usually some variation on the get-rich-quick how-to guide. This year, however, marked a departure: Piketty’s Capital in the Twenty-First Century, Edward E. Baptist’s The Half Has Never Been Told: Slavery and the Making of American Capitalism, and Flash Boys by Michael Lewis were all business blockbusters that challenge readers to think critically about the role of Wall Street.

It bears mentioning that inequality begets inequality. In light of the US’s highest reported concentration of racial tension since the death of Rodney King, the New York Times reports on President Barack Obama’s recent statements on the nature of income and wealth gaps between blacks and whites—or, more to the point, that despite improved race relations in the US since he took office, these gaps have persisted. And before we in Canada or the UK get too smug about our own standings, it’s worth noting that our respective societies are hardly immune to the phenomenon, either.

The good news—if one takes an aggressively glass-half-full approach, which probably offers least a couple of psychological advantages during these short, dark days—is that Google Trends data suggests people are more likely to pay attention to the dynamics of income inequality during the non-summer months. Or, as Slate puts it: “Nobody, it seems, cares much about income distribution in the summer.” Slow clap, Slate.

Normcore, wage transparency, and the public trust

Remember normcore? The fashion trend was first reported by New York magazine in February, in reference to young trendsetters’ newfound inclination toward dressing like dowdy dads. It turned out they were onto something. The September issues of high-fashion glossies now on newsstands are beginning to reflect the shift. From mass-market retailers like the Gap to elite brands available only to a monied few, there’s been an aesthetic paring down—a surface-level democratization. And, as it happens, the adoption of a pared-down uniform by those who can afford more lavish looks has happened before.

The Week reports:

It’s unsurprising…to see echoes of today’s fashion in the way the Great Depression altered tastes in the 1930s. Then, fashionistas opted for simpler, more timeless styles that cloaked their wealth better than the freewheeling fashion of the 1920s. Then, too, the fashion tastes of high and low converged. 

Fashion trends can serve as a handy mirror to a given era’s social climate. That today’s cool kids are unwittingly harkening back to Depression-era stylistic sensibilities speaks volumes, whether they realize it or not.

And here, according to a survey released Thursday by the US Federal Reserve and reported by Reuters, are the normcore-birthing figures:

From 2010 to 2013, average income for U.S. families rose about 4 percent after accounting for inflation, the survey showed. All of the income growth was concentrated among the top earners, the survey showed, with the top 3 percent accounting for 30.5 percent of all income.

It goes without saying that worse things than fashion have suffered as a result. As reported in a study forthcoming from the Association for Psychological Science, in the US, trust in others—and in institutions—is at a three-decade low. The authors of the study found income inequality to be at the crux of this crisis of distrust, citing “a growing perception that other people are cheating or taking advantage to get ahead.”

Oh, and full-time working women only earn around 77 percent of what males do. In happier news, apparent normcore peddlers Gap Inc. are making public what they pay their employees—an unusual bid for transparency—in order to demonstrate the corporation’s commitment to gender-equal wages. (Less happy: as the Huffington Post points out, the same cannot be said for the overseas factories where most of the brand’s garments are produced.)

Mind the Gender Wage Gap

Women’s Equality Day—or the 93rd anniversary of the 19th Amendment granting women the right to vote in the US—happened this week, which meant that the gender wage gap received its share of hearty online debate. From the political side (the White House, as it happens, has its own Tumblr) came a chart borrowed from another Tumblr, I Love Charts, that showed that not only does the gender pay gap exist for high-educated American women with professional degrees, but it actively widens with time. By their late 30s, men with professional degrees reportedly earn 50% more than their female counterparts in comparable fields.

Women in low-earning fields don’t fare any better, reports The Washington Post’s Wonkblog. The paper cites a new study released by the Economic Policy Institute, which says that women in the restaurant industry earn less than men across the board. The disparity only widens as women move up in rank, with female managers earning least in comparison with males holding the same positions.

This gap isn’t limited to the US. In the UK, female bosses earn 35% less than male execs, according to the CMI’s National Management Salary Survey.

One solution: Increased wage transparency. President Obama signed an Executive Order in April to encourage pay transparency in the US (though its effects, so far, have yet to be determined). In the UK, Opportunity Now director Kathryn Nawrockyi has been quoted in favour of organizations making their wage data public, deeming this move “a good way to encourage openness and transparency” and “eradicate bias, both conscious and unconscious.”

Economic inequality and Ferguson

This week, as racially-charged unrest in the town of Ferguson, Missouri continues, the conversation about the relationship between economic inequality and America’s racial chasm has intensified. The New York Times, has broken this down into charts measuring rates of black versus white joblessness, homicide, chronic health issues, and more. While the report highlights certain glimmers of hope—more blacks in executive and political roles, converging levels of life expectancy—by most measures, including a significant racial pay gap and downright stark wealth gap, the conclusion is clear: “The black-white racial divide remains as central to American life as it has been for centuries.”

Meanwhile, The Guardian asserts that the fallout in Ferguson is “the inevitable outcome of economic injustice.”While the author concedes that economic inequality isn’t the driving force behind centuries-old systematic discrimination, minimizing the economic struggle faced by so many African American communities would improve their odds of being able to “grab and wield the share of political and economic power to which they are entitled by birth—by virtue of the fact that they’re citizens of the United States.”

Capping that off is the International Business Times, which quotes St. Louis Post-Dispatch reporter David Nicklaus: “If police tactics were the spark that set off the explosion in Ferguson this week, then poverty and hopelessness were the tinder.”

Back to the New York Times: “The Upshot” blog undertook a clever experiment this week, tracking a decade of web search data from counties across America to determine if, and how, economic inequality would affect queries. The results– “a glimpse into the id of our national inequality—showed that health problems, guns, video games and religion were all common search topics in places confronted with greater hardship. The flipside? Places with higher concentrations of wealth tended to exhibit greater interest in tech devices, fitness trends, and boutique baby products.

Finally, again in “The Upshot:” among the poor, women bear the brunt of inequality.

Not all jobs created equal

The good news first: It appears that, in 2014, the U.S. economy has at long last recovered all of the jobs lost during the economic downturn that began six years ago. Now, the bad news: these new jobs pay less. A lot less.

According to a report released by the United States Conference of Mayors, and parsed by the Los Angeles Times, these replacement jobs are mostly within lower-paid sectors. As a result, the ensuing pay cut is averaged at 23 percent. The unsurprising cherry on top of the disappointment sundae? The top 20 percent of earners continue to be accumulating wealth just fine.

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The income gap between rich and poor U.S. metropolises has reached a new peak. The Financial Times reports from new US Commerce and Labor Department data for the 100 largest metropolitan areas by population that shaky job recovery (see above) has made for a sharp imbalance between the country’s housing markets.

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Finally, this week’s conversation necessarily turns to Ferguson, Missouri. Following the killing of an unarmed 18-year-old black man, Michael Brown, by police officer Darren Wilson, and days of ensuing protests met with militarized policing tactics, the New York Times editorial board has released a contextualizing summary of the overlapping layers of racial segregation and economic disparity that incubated this week’s tragic events.

Commentary from Colorlines that picks up on the Standard & Poors report we discussed last week, as well as Monday’s report from the U.S. Conference of Mayors, elaborates on one facet of this deeply entrenched inequality rat king: that black and Latino wage earners are faring poorest in the unevenly recovering job market. When considering this week, it is impossible to disentangle one ingredient from the other.

A Standard & Poor’s surprise

A report by the financial services company Standard & Poor’s dominated headlines this week when it argued that inequality is a threat to U.S. economic growth—not exactly a stance one might expect from Wall Street. Of particular concern to one of the firm’s chief economists has been the onset of the most recent recession and its slow recovery. As the New York Times’ “Upshot” blog would point out, the report didn’t quite break any new analytical ground. Still, as the author writes, “it is a sign of where things are shifting: Anyone who wants to explain why the United States economy is evolving the way it is needs to at least wrestle with the implications of a more unequal society for the economy as a whole.”

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The harm brought on by inequality, of course, extends beyond the economy. Recent findings released by a group of researchers in the journal Demography suggest that income inequality has widened the life expectancy gap in the U.S. to a greater gulf than in most other developed countries. While unequal wealth distribution hasn’t had much of an effect on old-age mortality, it has led to a rise in deaths of younger people by violence or limited healthcare access. As a result, Healthline reports, life expectancy in some U.S. counties is lower than it is in Honduras or the Philippines.

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We all know that America’s economic recovery hasn’t treated all earners equally (in 2012, for instance, the top 10 percent of U.S. earners took home more than half of the country’s income). Similarly, not all metro areas have felt an equal blow. As Richard Florida reports in CityLab, metros like New York, Detroit, San Francisco and L.A. report income inequality levels not unlike those of developing world nations like Swaziland and the Dominican Republic. But, as Florida is quick to point out, the disparities are seen across the map, underscoring “an issue that the entire nation will have to acknowledge and tackle.”

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Meanwhile, also in CityLab, a new study probes the relationship between gentrification, race, and class-based inequality.

Florida writes:

Across the board, the likelihood of gentrification declined as the proportion of black residents in a neighborhood went up. The difference in reinvestment levels between neighborhoods of 35 and 45 percent black residents was more than twice the gap in extent of gentrification between neighborhoods of 5 and 15 percent black residents.

This persistent segregation, according to Florida, helps explain the division that happens within cities and metropolises.

Poor doors and the end of middlebrow

It appears that, in an age of inequality, even inclusionary zoning is fair game for Dickensian snags.

Last week, a New York luxury condominium developer won approval to install a second, back-facing door for its rent-control tenants in addition to the main, street-side entrance its market-rate residents would enjoy. As the comedian Stephen Colbert’s Comedy Central alter ego aptly put it this Monday: “Now, poor doors are just the latest in a trend that helps us haves not have to see the have-nots.”

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Friends of Wagemark, The Equality Trust, have updated their website to include new figures on the state of inequality in the UK. With this revised data, the organization has included a helpful breakdown of the metrics by which inequality is assessed and explanations of how inequality has changed over the course of the past century. It can be accessed here.

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Finally, the New York Times’ A.O. Scott wonders whether today’s much-discussed squeeze on the middle class might soon ring the death knell of the middlebrow—that is, that occasionally derided but ultimately ambitious streak in popular culture which has more or less defined American taste since the Second World War.

Scott writes:

It is hard to look back at the middlebrow era without being dazzled by its scale, complexity and size, and without also, perhaps, feeling a stab of nostalgia. More does not always mean better, but the years after World War II were a grand era of more. In Pikettian terms, the rate of growth exceeded the rate of return on capital, and the result was a culture as well as a society that became less stratified and more egalitarian.

The implication here is that with increased stratification, a society risks smothering the dissemination of ideas across social spheres and, in turn, stifling cultural production. To paraphrase Scott, this bodes poorly for the creation of future masterpieces.

Wages, Economic Real Talk, and Piketty for Dummies

“To measure overall inequality, you have to think about both pre-tax and after-tax inequality,” writes Zachary A. Goldfarb in the Washington Post’s “Wonkblog” this week. The post mostly concerns Obama’s inequality-reduction record, but it also brings up a point that’s easy to gloss over: that tackling inequality isn’t all about tax policy. Increased wages and improved educational opportunities matter (measurably!) too.

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In response to Amazon Kindle data that suggests that Capital in the 21st Century, Thomas Piketty’s 700-page inequality blockbuster, might be the most unread bestseller of all time (because, well, it’s a 700-page inequality blockbuster), columnist Nick Kristof breaks the subject down into five digestible nuggets. Among these: economic inequality in the United States has worsened considerably, and has become a politically destabilizing force. While Kristof introduces nothing terribly groundbreaking here, he offers a useful reminder: “Inequality and lack of opportunity today constitute a national infirmity and vulnerability—and there are policy tools that can make a difference.”

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As satirist John Oliver brought up in a segment from his popular HBO show that went viral last week, American optimism about economic opportunity might well be holding equality back. This week, Eduardo Porter similarly points out in The New York Times’ “The Upshot” blog that an American perception gap—that is, misjudgments about inequality—might account for hesitancy to vote for redistributive policies.

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Finally, Boston Globe columnist Tom Keane invokes US Census data to flesh out the last four decades’ labour market shifts that have partly led inequality to the fore. One measure toward reducing it: better pay.