John Howard, conservative social democrat #2

Last month I suggested that John Howard was a conservative social democrat, redistributing income as a conventional social democrat would, but giving it a conservative twist by targeting families.

An interesting presentation by Ann Harding of NATSEM at today’s Melbourne Institute/The Australian conference spells out the distributional consequences of all the extra spending.

For a single and childless person earning between $1,000 and $1,250 a week, changes in the tax and welfare systems since 1996-97 leave them 4% better off in real terms. But a couple with one earner and two children on the same income is 15% better off from tax and welfare changes, and a couple of two earners and two children is 19% better off.

These figures ignore changes in private income – they are the effects of changes in government policy alone. If increases in private earnings are included, a single adult is 15% better off and and a couple with children is 29% better off. This suggests that the market alone has not changed household relativities much, but government policy has had a big effect.

Harding also finds that when we look at equivalised household income (ie, allowing for the number of people in the household) over the last decade households in the top 20% of the income distribution have had % increases in their income that are slightly below the average, though still a good improvement – 24%. The biggest winners have been those in the middle two income deciles on 32% and 29%. Decile 2 did the worst, on 14%. Harding says this group contains a lot of old-age pensioners without private resources, so they have not directly benefited from the rise in market income or the added concessions for ‘self-funded’ retirees.

Overall, though, it supports my argument that while Howard only occasionally talks like a social democrat, he has consistently behaved like one.

Why are men more likely to be sacked than women?

Last week’s labour mobility data showed that men are more likely to be sacked than women. Admittedly, with overall retrenchment rates so low, it is not a huge difference in absolute terms – 2.4% compared to 1.9%. But relatively, men are noticeably more vulnerable. I haven’t gone back to calculate the differences over all the years of the job mobility survey, but the same pattern was there in the first survey in 1972 (3%/2.1%) and in 1984 (4.9%/4%).

The Melbourne Institute report on the HILDA survey saw this result in their data too and tried to work out why. After controlling for various factors including educational attainment, industry, and being casual or part-time they found that, while the gap narrowed, being female still conferred an employment security advantage. Women’s greater job security was also reflected in their subjective perceptions of how safe their jobs were. So women’s rising employment share over time could go some small way to explaining the good results on job security that we currently see.

But it still doesn’t explain why women are less likely to be fired than men. The Melbourne Institute report speculates that perhaps women are less likely to cause trouble at work than men. My experience is generally the opposite – they seem more likely to fight among themselves – but since my uni days I’ve only had office jobs, and perhaps the social skills (or lack thereof) of blue collar males land them in trouble.

Another suggestion in the Melbourne Institute report is that employers, who tend to be male, feel less comfortable sacking women than men. Perhaps there is some residual code of the gentleman at play. Or perhaps they fear the waterworks that may follow the giving of notice.

Their third suggestion, and the one I found most convincing, is that because more men than woman are in the labour force there is a selection effect, so that males of limited competence are more likely to be in the workforce than similarly competence-deprived women. With a larger pool of men than women likely to be sacked for stuffing up, it follows that more of them will in fact be shown the door.

These are not mutually exclusive possibilities. I will be interested to hear if readers (including lurkers) have any other ideas.