The Lasting Damage of High Inequality

In my previous post, I shared the grim results of a recent OECD study that found a consistent rise in wealth and income inequality across much of the developed world, with the U.S. taking the lead among the richest countries (though comparatively less wealthy countries Chile, Mexico, and Turkey were ahead).

Reporting on the same survey, the New York Times delved further and explored the impact that this worsening inequality is already having on societies: Continue reading

Income Inequality Growing Across The World

The Organization for Economic Cooperation and Development (OECD), a group of 34 mostly wealthy countries, has published the results of a study finding that income inequality is “at its highest since records began”, with the with the United States ranking among the highest on the spectrum.

More from Al Jazeera:

The United States was near the high end of the inequality spectrum, followed by Israel, the United Kingdom and Greece. Only Turkey, Mexico and Chile were found to have higher levels of income inequality than the U.S.

Denmark was the least unequal country according to the report, as measured using the Gini index, a common measure of income distribution. Slovenia, the Slovak Republic and Norway also ranked near the low end of the spectrum.

Overall wealth is even more unevenly distributed than income, according to the report. Across all 34 countries studied, the bottom 40 percent of households were found to possess 3 percent of all wealth. In contrast, the top 10 percent laid claim to half of all wealth, and the top one percent held almost 20 percent of all wealth.

Gurría said the report’s findings demonstrate that inequality slows down economic growth. He urged OECD member countries to adopt more redistributive policies, saying that redirecting wealth flows would benefit not just low-income households but the economy as a whole.

“Well-designed, prudent redistribution does not harm growth”, he said. “In fact, it goes hand-in-hand with growth”.

In addition to tax transfers, the OECD report recommends more investment in education, policies that promote remunerative employment, and measures that “remove barriers to female employment and career progression”. Bringing more women into the workforce and narrowing the pay gap was found to have a mitigating effect on income inequality.

In recent years, global elites have become increasingly concerned about income inequality. Last November, the World Economic Forum, which hosts the annual gathering of political and economic leaders in Davos, Switzerland, put out a report identifying income inequality as the number one trend to watch in 2015.

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Taking Environmental Sustainability to the Next Level

It is one thing to design buildings that can minimize impact on the environment. But what about creating structures that can play a regenerative role, contributing positively and directly to surrounded ecosystems? CityLab explores this intriguing and recent concept:

The idea is not to be satisfied with efficiency for its own sake. Regenerative design aspires to an active participation in ecosystems all around. A green roof is pleasant for humans and reduces energy consumption in the building underneath; a regenerative green roof not only does that but is intentionally designed to support butterflies or birds that have otherwise vacated an urban area.

Capturing rainwater, recycling graywater, and treating wastewater on-site are all great for reducing overall water consumption. But in regenerative design, these strategies are only optimal if they recharge the local aquifer as well.

Similarly, building materials shouldn’t only be viewed in the context of minimizing damage and the consumption of resources; they should be put to work for the planet. The use of wood thus becomes at its core a carbon sequestration strategy. The carbon soaked up by older trees—harvested in sustainable forestry practices, cutting them down before they fall and rot and release emissions back into the atmosphere—gets taken out of the cycle, permanently tucked away as beams and pillars and walls.

Given the novelty of the idea, there are no working models just yet. The article highlights the closest example of a regenerative system: the VanDusen Botanical Garden Visitor Centre in Vancouver (pictured).

Waste from the toilets is harvested to be mixed with food waste composting, while the water is separated out and purified for use in irrigation. Rammed-earth building blocks were formed by dredging ponds on the site, and the deeper water in turn led to a healthier ecosystem. The equivalent of staircases encourage all kinds of critters to get up to the green roof and feed; coyotes have been spotted up there.

Given the twin trends of rapid urbanization and equally rapid environmental degradation, this is definitely idea well worth exploring and investing in further. What are your thoughts?

Traditions in Academia

Eupraxsophy:

Finns take their education very seriously.

Originally posted on Pickled Hedgehog Dilemma:

Traditions are a part of every culture, from holidays to formalities to how guests are treated.  And of course in academia there are traditions that are unique to countries and continents.  Since I spent several months contemplating going back to graduate school in another part of the world, There are a few of these academic traditions that I have stumbled across that I think are not just really interesting, but make me want to go there for my degree despite being in a program already.

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Lessons From Mexico On Combating Poverty

Given all its present woes, Mexico would not strike most as a model to follow. But as I have mentioned before, for all its political and socioeconomic challenges, namely with respect to crime and corruption, one of the world’s largest economies has a lot going for it. As a “newly industrialized nation” with a broadening middle class, the country of 120 million is taking steps to better harness its burgeoning economic potential.

A good place to start is with the agricultural workers who make up a bulk of the country’s most impoverished people. One state is taking a simple yet profound approach to the problem, as The Atlantic reports:

In the Mexican state of Baja California, which exports huge amounts of strawberries, cucumbers, and tomatoes to the U.S., labor is taking a different tack that might take some of that pressure off of employers, for better or for worse: The local government is reportedly leaning toward paying a portion of farmworkers’ wages, bringing them up to 200 pesos (about $13.30) per day.

The terms of the agreement between farmworkers and the government have yet to be nailed down (for example, how much of the wage increase will be shouldered by government versus industry) but it is refreshing to see a government recognize that significant amounts of workers simply don’t make enough money to live comfortably, and to try to do something about it. And wages are only one part of the equation. The agreement would also have the government take pains to make sure workers are receiving the healthcare and social-security benefits they’re guaranteed by law, and hopefully would make it rarer for crew bosses to sexually harass female farmworkers.

In essence, the government is filling the gap between livable wages and what most companies offer. This might seem like an unlikely or unwarranted solution to most Americans, but it is already the reality, albeit less directly:

A recent study from UC Berkeley’s Labor Center found that nearly three-quarters of people participating in government programs such as Medicaid and food stamps are in families headed by workers. The authors, calling this a “hidden [cost] of low-wage work in America”, estimated that through these programs, taxpayers provide these families with about $150 billion in public support. Additionally, programs such as the Earned Income Tax Credit essentially subsidize the wages of workers whose income is below a certain level.

Shouldn’t companies be making up this difference instead of taxpayers? That’s how some state legislatures feel. Starting next year, California will publicly name any company that has more than 100 employees on Medicaid. And in Connecticut, state legislators are considering a bill that would require large employers to pay a penalty for each worker on their rolls earning less than $15 an hour.

Ultimately, what the government of Baja California intends to do is improve the situation that workers are in—something, one would hope, that companies start feeling the pressure to do as well.

It is very telling that the forces that most strongly oppose raising the minimum wage, or providing some sort of government support to workers, are the same ones directly responsible for underpaying their workers and shifting more and more of their companies’ profits to shareholders and top executives.

If businesses (and their supporters) do not want to do more to compensate their employees better, yet also do not want the government to help make the difference, then what exactly is the end game? A sclerotic economy where everyone is just barely getting by, and the demand for goods and services — which these same businesses claim is woefully lacking — remains low? Why should poverty — in any nation, much less the richest one — be seen as an unavoidable fact for so many working people?

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How An Iron Fish Can Help Millions of People

Anemia, caused mostly by iron deficiency, is one of the most widespread and consequential health afflictions in the world, impacting 30 percent of the world’s population, mainly children, teens, and young mothers. From constant fatigue and headaches, to potentially deadly hemorrhaging, it literally weakens entire communities and makes the already laborious lives of the poor even more miserable.

It is easy to take for granted the prevalence of iron in most developed-world diets. But for most people living in the developing world, such as in Cambodia, it can be difficult to grow or access iron-rich food, let alone take expensive and equally unavailable iron tablets. It is one of those problems that should not be so widespread and intractable, indicative of the pervasive neglect and inequality of many economic and political systems (and indeed the world).

The BBC highlights a promising solution by Canadian scientist Dr. Christopher Charles so simple and cost-effective that there can be no excuse for not implementing it.  Continue reading

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This wind turbine generates power without blades

Eupraxsophy:

It is cheaper to build and operate than conventional models, and though not as energy efficient individually, can collectively cover more ground to make up for it. Sounds like something well worth investing in.

And of course, this is coming out of Spain, a world leader in wind power.

Originally posted on Quartz:

Growing interest in alternative energy sources has made the three-pronged white metal wind turbines dotted across open landscapes a familiar sight.

But thanks to a Spanish energy startup known as Vortex Bladeless, there’s a new type of turbine in town with a rather different look—and the potential to be cheaper and more reliable. Vortex’s generator resembles a giant straw in the ground and harnesses wind energy without the need for rotating windmill blades. It’s designed to vibrate in the wind as much as possible, like a guitar string; those vibrations are then converted into stored energy.

According to the company’s website, the Vortex turbines are 53% cheaper to manufacture and 51% cheaper to operate than traditional wind turbines. This is in part due to their lack of moving parts—there just aren’t that many components to break. Their current model, the 41-foot Vortex Mini tube, captures around 30% less energy than a traditional wind…

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Four Cancer Charities Accused of Fraud, With Some Important Lessons

According to the New York Timesfour sizeable charities — the Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America and the Breast Cancer Society — have been accused by the Federal Trade Commission and all fifty U.S. states of being controlled by the same small network of individuals who were enriching themselves with millions in donations.

According to the complaint, [James] Reynolds devised the fund-raising scheme in 1987 and recruited his son, friends and members of his church congregation to participate in the years that followed. The F.T.C.’s finding of $187 million in misspent donations reflects the charities’ activity from 2008 to 2012. In that time, the charities spent less than 3 percent of donations on cancer patients.

“The defendants’ egregious scheme effectively deprived legitimate cancer charities and cancer patients of much-needed funds and support”, said Jessica Rich, director of the F.T.C.’s bureau of consumer protection.

The complaint also accuses the organizations of falsifying financial documents, reporting inflated revenues and “gifts in kind” they claimed to distribute internationally.

Aside from the sheer sordidness of this affair — enlisting loved ones and church members to embezzle funds meant to go to cancer victims — this it is vital reminder about the importance of being vigilant towards any and every charity you are interested in. No matter how admirable or convincing the cause, please do your utmost to fact-check rigorously. Plenty of good and honest organizations doing effective work lack funding.

And while it is true that these organizations have not been formally convicted, the details of the case, and some prior controversies, do not look encouraging.

In any case, checkout charity reviewers like Charity NavigatorGive Well, and Charity Watch to see if any organizations you are interested in make the cut. Feel free to share your own trustworthy watchdogs.

How To Lift Families Out Of Poverty

NPR reports on an international study with a vital, yet surprisingly novel, goal: finding out whether or not humanitarian is actually effective for lifting people out of poverty. Despite the billions of dollars going into global aid of some form or another every year, there is an unfortunate dearth of data on what is most effective and how.

In response, a Yale university professor has teamed up with several humanitarian groups around the world (including MIT’s Abdul Latif Jameel Poverty Action Lab and the nonprofit Innovations for Poverty Action) to rigorously test poverty reduction programs with “the same method doctors use to test drugs (that is, randomized control trials).” Listen the result here or read the following excerpt:

They teamed up with a network of researchers and nonprofits in six developing countries. They went to thousands of communities and found the poorest families.

Then they divided the families into two groups. They gave half the families nothing. And the other half a whole smorgasbord of aid for one to two years. They gave them:

  1. Some livestock for making money, such as goats for milk, bees for honey, or guinea pigs for selling. “Depending on the site, there were different things specifically appropriate for that context,” Karlan says.
  2. Training about how to raise the livestock
  3. Food or cash so they wouldn’t eat the livestock
  4. A savings account
  5. Help with their health — both physical and mental

Karlan and his colleagues reported the results of the massive experiment in the journalScience this week.

So what did they find? Well, the strategy worked pretty well in five of the six countries they tried it in. Families who got the aid started making a little more money, and they had more food to eat.

“We see mental health go up. Happiness go up. We even saw things like female power increase,” Karlan says.

But here’s what sets this study apart from the rest: Families continued to make a bit more money even a year after the aid stopped.

“People were stuck. They give them this big push, and they seem to be on a sustained increased income level,” says Justin Sandefur, an economist at the Center for Global Development in Washington, who wasn’t involved in the study.

“What I found exciting and unique about this study is that the impact of the aid was durable and sustainable,” he added.

The results suggest that the right kind of aid does help people in multiple places. It lifted the families up just a little bit so they could finally start inching out of extreme poverty.

The researchers caution that while the data is positive, there is still a lot to be done. For starters, most recipients remained very poor, with incomes and food consumption together only increasing by around 5 percent on average.

Moreover, it is still unknown how sustainable even these modest bumps are, as the study only followed the results for a year after the aid stopped.

Even so, the findings are very important, as they show aid groups that fairly basic strategy can often work. Even a little bit of extra money can make a huge difference in improving families’ lives, whether it is allowing them to make gains in their nutrition or health, send their kids to school, or simple hope.

 

College Grads Still Have It Rough In Post-Recession America

College graduates are spending more and more years — and money — to get worse and worse entry-level jobs. That is the grim conclusion from this recent report from The Atlantic:

The majority of young people aren’t graduating from a four-year university. Rather they are dropping out of high school, graduating from high school and not going to college, or dropping out of college. Millennial is often used, in the media, as a synonym for “bachelor-degree-holding young person”, but about 60 percent of this generation doesn’t have a bachelor’s degree.

And how are they doing, as a group? Young people don’t seem to have a jobs problem—their jobless rate is a bit elevated, but not alarmingly so. Rather they have a money problem. The jobs they’re getting don’t pay much and their wages aren’t growing. A recent analysis of the Current Population Survey last year found that the median income for people between 25 and 34 has fallen in every major industry but healthcare since the Great Recession began.

Again, it is not that young degree-holders are having a hard time getting employed — on the contrary, they still have a better chance of finding a job than those of any age without degrees. It is that the quality of their work — in terms of pay, growth prospects, treatment, etc. — is poor and not corresponding to their skills and investment in education. It is under-employment rather than unemployment that is the big issue. Continue reading