Why Labour Should Adopt the Citizen's Income

I'm considering nicking top guidelines, and one Labour and the labour motion need to half of-inch is the citizen's earnings from the Green Party. Of path, the Greens do not personal it, it has been knocking about for a terrific a few years. But they're the most effective ones pushing it as a key plank in their commitments. Here is the fast section from their policy internet site, and is possibly to have similar wording for the 2018 manifesto:

EC730 A Citizen's Income enough to cowl an individual's primary desires could be delivered, to be able to update tax-unfastened allowances and most social safety benefits (see EC711). A Citizen's Income is an unconditional, non-withdrawable income payable to every individual as a proper of citizenship. It will now not be challenge to means trying out and there will be no requirement to be both working or actively looking for paintings.

EC731 The Citizens' Income will eliminate the unemployment and poverty traps, as well as acting as a protection net to permit human beings to pick their own types and patterns of work (See EC400). The Citizens' Income scheme will for this reason allow the welfare state to increase in the direction of a welfare network, attractive humans in in my opinion gratifying and socially beneficial work.

EC732 When the Citizens' Income is delivered it's far supposed that no person can be in a role that they may receive less through the scheme than they had been entitled to beneath the previous benefits device. Children could be entitled to a discounted quantity with a view to be payable to a figure or criminal guardian. People with disabilities or unique desires, and unmarried parents will get hold of a complement.

EC733 Initially, the housing gain system will continue to be in location alongside the Citizens' Income and might be extended to cowl contributions towards mortgage payments (see HO602). This will ultimately be reviewed to set up how housing benefit might be incorporated into the Citizen's Income, thinking of the variations in housing costs among one of a kind elements of the country and specific types of housing.

At £three,692/year for over 18s, we're hardly ever inside the territory of a weekly lottery win for all of us. But it is not without cost. The Telegraph assume it will price between £240bn-£280bn/12 months. Where they get this determine from I don't know. Providing an earnings for anyone over 18 could fee £185bn. That includes people presently in receipt of the simple kingdom pension. Remove the 10.4m currently drawing one knocks off simply over £38bn. The Greens favour investment it from a wealth tax and savings from a largely obsolescent welfare nation. Extra bills for housing, the disabled, and some form of infant benefit could stay. 

It's not beyond the realms of opportunity. It may be carried out if the political will and popular aid is there. Two feasible objections come to thoughts first, but.

1. It undermines the incentive to work.

2. It could make a contribution closer to inflation.

Let's have a look at some evidence.

Between January 2008 and December 2009, a coalition of mainly-German resource organisations backed a primary income grant pilot in Otjivero-Omitara in Namibia, a small city of about a thousand human beings located 100km from Windhoek. Everyone beneath 60 changed into paid a hundred Namibian greenbacks/month and the consequences had been exciting. While the records turned into skewed with the aid of circle of relatives participants from some other place migrating into the city as soon as the pilot became underway (making it appear to be family income in reality fell for the duration), despite the fact that poverty became decreased within a 12 months from 76% to 37% of residents. For those no longer homing migrants, it crashed to 16%. Within six months of its advent, underweight children fell from forty two% to 17%. School drop out costs fell from forty% to zero%, debt declined from N$1,215 to $772/in keeping with person, reported crime collapsed via forty two%, and the range of adults worried in "earnings producing sports" improved from forty four% to fifty five%. The pilot notes "the grant enabled recipients to increase their effective profits earned, specially through beginning their personal small enterprise, together with brick-making, baking of bread and get dressed-making. The BIG contributed to the introduction of a nearby marketplace by growing households' buying power."

Very properly paintings even though five years after the pilot concluded the Namibian government have now not implemented the policy. However, it really is Namibia, a rustic dominated through a big wasteland, low population, and lop-sided financial development. In impact, one would possibly argue that the length of the BIG pilot helped round out Otjivero-Omitara's nearby economy. Is this of any use to wealthy, Western countries? A collection of US and Canadian authorities pilots with Negative Income Tax added consequences that have been repeated with the aid of the Namibian experience. These had been slightly different in that a simple income was paid simplest to folks who fell below a positive threshold - think about them as a shape of contemporary running tax credits. The Namibian effect on education was presaged right here: attendance and attainment up, drop out quotes down. Low beginning weights disappeared and, in the Canadian experience, falls in accidents, and physical and intellectual health issues driven hospitalisation rated down by means of over eight per cent. Nor become there any evidence of recipients giving up work to live off the supply. Some secondary earners - in particular girls - scaled again their paintings hours, and there was a few evidence that if a number one earner misplaced their activity they spent a few weeks searching out a appropriate alternative (pp nine-10 right here).

Still no longer convinced? Let's take a trip to Alaska, domestic of the Klondike, Ice Road Truckers, and Sarah Palin. Since 1976 the country has taken a slice of oil revenues and invested the proceeds, constructing up a sovereign wealth fund really worth round $50bn. Since 1982 the Alaska Permanent Fund Corporation has paid out a dividend to the seven-hundred,000 or so resident Alaskans of varying fee.

As you may see, the cost has been all over the region. I anticipate it is going to be a historic low this year, depending at the performance of its non-oil assets. While it's miles authentic costs in Alaskan stores are higher than the USA heartland, that is due to import prices in place of any inflationary outcomes. Furthermore in November 2014 unemployment stood at 6.6% vs the country wide common of five.8%. Evidence of bone idleness or the fluctuations within the oil economy? As the Department of Numbers site shows, unemployment quotes were tremendously stable considering the fact that 1990. 

These reviews display a citizen's earnings may be completed, but ought to it be carried out? Of route, and as a matter of urgency: it's miles a easy degree that could dramatically improve the living standards of hundreds of thousands and, as the evidence suggests, have very beneficial knock-ons in phrases of training, fitness, crime, and network concord. That's why the Greens and growing numbers of Labour humans advise it. From a labour movement factor of view, there's some other compelling cause. 

For 35 years commercial enterprise has had the whip give up the global economic system. Capital freeboots its way throughout the planet subject to few checks, and gambling one place off in opposition to every other. David Harvey made the compelling case in his A Brief History of Neoliberalism that capital in its neoliberal section is decadent and regressive. Profits have not come from the growth of the effective forces, as Marxists might positioned it, however instead by an 'accumulation by way of dispossession'. The compelled enclosures of land, the selling off of publicly-owned belongings, the export and deletion of jobs, the advent of markets into public offerings, and the erosion of revolutionary earnings tax regimes has redistributed wealth from the bad to the rich. It's a worldwide power take hold of that is best been feasible because labour moves have been defeated in some distance too many countries a long way too oftentimes. 

From a British attitude, this has intended that many hundreds of thousands of people aren't covered by way of trade union protections and are subject to overwork, pitiful pay rises, task insecurity. And it's the whole-time workers. As the government talks up the financial recuperation and trumpets jobs boom, a easy observe the figures indicates that 24 out of each forty new jobs are complete-time, but in 2008 the F/T fee stood at sixty four%. And these days? 62%. We have a task market more and more bent in the direction of part-time operating in which many humans cannot make ends meet. With unemployment excessive and opposition fierce for what complete-time jobs there are, its bent a long way an excessive amount of closer to the purveyors of transient running and zero hour contracts. A citizen's profits might change all this. If human beings getting into the job market understand they have a regular weekly payment offering a touch bit extra safety, the market incentivises accurate employers. No longer will workers ought to dangle to a low paid process with an awful boss. A fundamental profits will hold the wolf from the door, changing absolutely the balance between employers and employees, and providing new political possibilities our movement can capitalise on.

This is the alternative purpose why I guide the simple citizen's profits. It's a formidable step in the direction of securing the hobbies of our human beings and changing society permanently for the better. We want to take it up, turn it into celebration policy, and win it.

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Why the Right Fears the Four-Day Week

I've got a guilty secret. I subscribe to CapX's mailing listing and from time to time, I like a number of its output. For those of you who do not know (or do not care) what CapX is, it's a elaborate ass weblog that patterns itself as the house of a number of the first-class politics writers going. And Daniel Hannan. It additionally occurs to be firmly at the right someplace among Cameroonism and the batshittery of so-called libertarianism. In many ways, its stock-in-trade is contrarianism, albeit not as strident or as manifestly silly as your average Brendan O'Neill missive. Its niche is the supply of middle forehead arguments bigging up Uber, applauding Tory financial coverage (properly, until this occurred), and blindly, blithely cheering at the anarchy of marketplace fundamentalism. Still, lefties used to the concept-loose rantings that typically passes for right wing thinking ought to take a look at it out in the event that they want their conservatism a hint extra massive.

Anyway, scrolling thru their plugs remaining week, I came throughout this through Allard Dembe, a Health Services educational at Ohio State University. And his piece, 'The hidden risks of a four-day workweek' isn't always exactly a identify that leaves plenty to the imagination. As readers recognize, there may be an emerging trend at the left (and, certainly, in politics as a whole) inquisitive about what's happening at work. Chiefly, maximum annoying for policy makers - and a device entirely depending on the disciplining of employees - are predictions that advancing automation is about to wipe out hundreds of thousands of jobs, make thousands of profession types redundant, and that the new jobs set to fill the distance will neither be available in sufficient quantities or provide a like-for-like alternative (Andy's taken a recent study this, I plan on replying in due route). Hence dialogue has been doing the rounds about lowering the operating week, or introducing a primary earnings to assist human beings outdoor of work.

As the ancient file shows, the employees' motion from its inception has fought to reduce the range of hours we spend selling our labour energy in go back for a wage or a salary. As the paintings/life boundary will become blurred for huge numbers of workers and paintings is extending itself past the formal work day, we need to take this more significantly and start asking critical questions about what the economic system must be for, in place of restricting economic debate to pushing up GDP figures and job advent strategies. It's in this context that Dembe's arguments should be appraised. 

Dembe has massive revel in reading places of work, and possesses an extended publication list that testifies to this. Unfortunately, occasionally information would not necessarily imply you ask the proper questions. He begins by way of list a number of corporations which have experimented with 4-day working and descriptions advantages in phrases of decreased overheads for business, much less time spent commuting, and so on. And then goes on to garbage it by using list the dangers. Chief amongst them are the outcomes of compacting paintings time. For example, assuming that five eight-hour days are filled into four days, Dembe notes the hazard of at-work accidents creep upwards. Furthermore, the usage of 32 years well worth of statistics, lengthy paintings hours are related to a plethora of later life fitness problems. And it really is earlier than we start talking approximately intellectual health issues, parental obligations and so on. He concludes, "I don’t know approximately you, but the prospect of a 4-day week scares me. I have already got a difficult sufficient time getting my everyday weekly work performed over 5 days."

There is an apparent factor right here. Can you inform what it is but? Why sure, Dembe is assuming the number of hours worked in a week are inviolable. There is multiple way to shorten the running week. Assuming the "hegemonic" ordinary running week, you could just redistribute the hours across 4 days. Or, right here's a thorough notion, paintings commitments can be redesigned so the number of hours worked are less. Instead of a working week of 4 10 hour days, how about four 8 hour days? As we've got visible over the direction of the ultimate 30 years, productivity gains have led to report income at the same time as wages have lagged nicely in the back of, and living requirements saved afloat mainly thanks to credit score and cheap customer durables. There isn't any motive, apart from politics, why paintings couldn't be reorganised to spread those gains to every person thru the discount of the running week with out lack of wages. For Dembe, CapX and pals this cannot be countenanced - an afternoon less at work really way absolutely computerized luxury communism is next.

What Dembe's piece demonstrates is a complete poverty of imagination. It's a case study in how capital's highbrow bodyguards cynically try to narrow the horizon of possibilities round a selected problem, in this example labour's monetary dependence on capital, foreclose alternatives with the aid of failing to even point out them, and then provide drab technical reasons why such-and-such an offer is unworkable and/or unwanted.

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Neoliberalism and the Battle of Ideas

If you need to look the problems of the Tory party encapsulated, watch Boris Johnson's conference speech. For the primary and perhaps the only time, the devoted grew to become out in large numbers to pay attention to the man who would be king use up a extraordinary deal of phrases saying not anything specially. But there may be one aspect our fatuous foreign secretary did touch on, which marked "Call me" Philip Hammond's speech the previous day, has cast a shadow over the depleted fringes and will haunt Theresa May's the following day, and this is the idea of loss. It's not simply the election, it's the yawning realisation that insurgent Corbynism has now not most effective introduced left Labourism lower back to the fore, however there lurking inside the background is the spectre of communism. What is worse, its rude go back within the Russian Revolution's centennial year eschews tankie patina for the promise of a better destiny. It's a communism absolutely in music with the zeitgeist. Fully computerized luxurious communism is greater than a semi-jokey meme, it's where the cutting edge of leftist thought is at and its elaboration is drawing in many thousands of radicalised brains. 

Small surprise the Tories are worried. As Hammond located, debates they idea have been settled within the 1980s are coming again. At a gap address away from the conference corridor, the PM said it became important to make the case without spending a dime marketplace capitalism all once more. Johnson went there too, and varied commentators, along with our intellectually-challenged friends at CapX, are panicking and turning out (what they assume are) hit portions demonstrating the superiority of neoliberal capitalism to its statist/social democratic versions and, naturally, North Korea. I'm surely concerned about a conflict of thoughts, and if the thin gruel doled out through Tory politicians and ideologues seen to date is the exceptional they can do then they stand no hope of stymieing the intellectual strengthen of leftist thoughts.

There is another issue hampering them as well. The Tories didn't win the war of ideas within the Nineteen Eighties by the force of argument, they secured their temporary victory on the idea of, nicely, force. Social democratic and socialist thoughts weren't debated into a deep sleep, they were bludgeoned into a coma through installed police at Orgreave and batons at Wapping. The defeat of the two pivotal labour movement struggles of that decade sapped the militancy and belief of masses of heaps of people, some of which carried the pall of defeat with them as they ascended the change union ranks. This helps provide an explanation for the "new unionism" of the Nineties and after with its emphasis on service provision and partnership with the bosses. The trauma of loss demobilised loads of human beings and, unsurprisingly, the Labour Party meditated this with a crumble in self belief of the left and the upward push of New Labour. Internationally, the death of the Soviet Union and its purchaser regimes cemented the triumph of bourgeois thoughts. When Francis Fukuyama proclaimed the give up of history in, properly, The End of History, as the competition between neoliberal capitalism and its adversaries went it didn't present as a wholly ludicrous argument.

The battle of ideas wasn't just about force. Thatcher, Reagan and co. Exorcised the bourgeois creativeness of its phantoms because, at the least, sufficient human beings have been doing nicely. While the miners suffered and had been starved returned to the pit heads, lots of oldsters were given alongside pretty nicely. With the NUM broken, Thatcher may want to get on with privatising the utilities and letting council tenants buy their homes on the reasonably-priced. The end result became the introduction of a layer of operating elegance human beings with a modest belongings preserving and possibly some British Gas stocks which, the Tories was hoping, could be sufficient to nudge them toward vote casting Conservative. At the same time, credit score exploded as actual wages modestly rose and modestly fell, which reduced the bar of entry into the unexpectedly diversifying consumer markets. Meanwhile, the advent of markets into public services and the fidgeting with training policy began positioning service users as self-activating consumers and scholars and students as young Thatcherites who might, and could only get on by their very own individual efforts. This changed into the marrying up of individualism with the entrepreneurial self, of the inculcation of neoliberal subjectivity against the backdrop of rising affluence powered by privatisation and debt.

As many humans have determined of late, the trouble with Thatcherism is you finally run out of things to privatise. Free marketplace ideas became the ruling orthodoxy because it appeared to paintings. If your argument is that capitalism minus regulation, a first rate sized public sector and powerful exchange unions ends in generalised prosperity, then it had better deliver otherwise people are going to get sceptical of such claims. And that is where we are now. Corbynism is famous and beginning the gate to a certain pair of German gents because capitalism isn't handing over for enough. As Chris has recently noted, the right are going out in their manner to show the Marxist competition that capitalism cannot be fundamentally reformed. Even tweaking capitalism so younger humans can appearance forward, as David Willets puts it, "to own a place of their very own, to have a respectable funded pension and to have a fairly secure process it's properly paid" is entirely off the time table. Instead all of the authorities can provide is a £10bn boost to assist to shop for, which does nothing to cope with housing deliver and does the whole thing to pressure fees upwards, and freeze tuition charges after whacking them as much as £9,250.

The hassle the Tories now have is they're having to combat the ideas wars once more with out law enforcement officials, without baubles and bribes, and in opposition to the backdrop of an glaringly damaged machine reputedly incapable of presenting a higher future. It's a combat taking location on a extra or less identical footing, and this is why they are terrified.

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The Basic Income and the Cult of Work

If you have the sort of task like, say Chuka Umunna, you won't need to peer the stop of work. You get a hefty revenue, you're the boss of your own workplace, you are reputable by your peers and considered to be someone who subjects, and first-rate long breaks help punctuate existence at Westminster. If, alternatively, your experience of work is a life of drudge, humiliation and insecurity there's a very good danger your views would possibly differ. The majority of people who work might like the habitual and shape a work day gives them. It might confer a experience of reason and provide a social lifestyles, however on the end of it most of the people would not do what they do in the event that they failed to must. Millions of people paintings genuinely because they haven't any desire.

We live in a society that makes a fetish out of work. One's trajectory thru the schooling system is (supposedly) guided through getting a decent activity at the give up of it. People's engagement with social protection is supposed to be a brief issue with the item of throwing them back into the place of work at the earliest opportunity. And if people are not working, they're feckless and bone idle and made to experience that way - by no means mind how unemployment continually exceeds the number of vacancies. And  what? It's all so bloody pointless. While there are people without jobs, masses of these with them are overworked. Work time too regularly bleeds into home time as paintings masses are impossible to manipulate as challenge piles upon venture. Or at any time the phone threatens to go with a "request" to are available in, shattering your unfastened time and reminding you a while is their largesse. Too many places of work are permanently quick staffed, and the enjoy of work is a dizzying affair of plate spinning and recurring. Life isn't always for enjoyment, it's a treadmill for endless tens of millions who recognize when they reach retirement that they may be too knackered or too unwell to do the things they constantly wanted to. Life is far too brief to be spent and bent in involuntary servitude, in particular when work may be planned and shared out equitably.

I wasn't amazed to discover Chuka's a lot trailed competition to the simple earnings couched as a defence of the cult of labor. Nor that his argument is virtually identical to criticisms previously ventured through Yvette Cooper. That does not suggest it isn't always nerve-racking, or won't be taken critically in some quarters. But severely, just look at the nation of it. Nonsense about fundamental profits meaning humans living off the state, dwelling vacuous, purposeless lives, of "giving up" on creating new jobs, it is a miserable workout in how impoverished the political creativeness can end up. For instance, within the coming wave of automation,

Work could emerge as more satisfying. In the new economic system our most treasured asset could be people. We have emotional intelligence and belief, and the capacity to create, empathise, convince and purpose in abstract approaches. We can make inventive leaps, and we have instinct. In the brand new economic system what's going to have delivered cost is what's devalued today – the emotional labour of being concerned, communicating, developing and connecting.

As if all this is depending on the archaic compulsion of changing our capability to labour for wages or a revenue. Technology need to not be deployed to create extra bullshit jobs so more human beings can spend their quality years doing meaningless, socially vain tasks. It have to be deployed to reduce the running week, to unfold the wealth we create, and to make us free from the need of waged labour. The future has to be something higher than a human being chained to a table, forever. And it totally can be.

What the basic income offers is a guaranteed, no-strings income to all. If cash way freedom and desire, this is precisely what it confers. It lets in humans the selection to spend their time engaged in socially productive voluntary paintings or to take a seat at domestic and play video video games. People have the liberty to indulge their passions. They can engage in entrepreneurial interest with out the hazard of wreck, as individuals, small partnerships or cooperative ventures. They are unfastened to dip inside and out of the education gadget, and achieve this while not having studying time eaten up by using work. And likewise, humans can retire early from paintings, boost a own family, attend to complete-time caring with out worry and insecurity. We understand a fundamental profits can do that, because trials show it.

Yes, there are simple earning and basic incomes. It has its enthusiasts on the right as well as the left. For the previous, knowledgeable as it's far through Californian tech-bro libertarianism, establishing a simple earnings allows for the abolition of social protection and a whole bunch of liabilities agencies shell out for. The basic income is a way of socialising danger, and supporting support a populace at the same time as Silicon Valley capital parasites off its facts. Others favour pitching the simple profits at a totally low stage so it does not intrude on paintings incentives. I.E. The necessity of operating. Left strategies to simple profits must reject both and pitch it at a degree that permits for a comfortable life that reproduces people in all their material, social and cultural complexity.

Would this gift a capitalist economic system severe difficulties of variation? Absolutely, however then we're supposed to be within the commercial enterprise of moving beyond markets and artificial scarcity. If capital desires to survive, it would have to transform the nature of work totally. Without compulsion, abruptly the (potential) employee has the upper hand within the capital/labour relationship. Capital would don't have any choice but to innovate and automate as tons as it possibly can, because to draw personnel, wages, which might definitely grow to be reimbursement for people's time, would must be tons better than they're currently. The conditions of labor might ought to be better. Work might need to end up extra profitable and enriching. And, who knows, due to the fact work could be finished through those who want to be there perhaps it is probably a more first-rate enjoy all spherical. Meanwhile the relaxation of society might circulate away from the economic vital, experiment with new methods of establishing things, and as all and sundry has a guaranteed true wellknown of residing may additionally determine to consign money itself to the museums.

It's this, in the end, which underpins the hostility Chuka and his friends have closer to the simple income. Theirs is not a realistic reputation of research that prove work is ideal for you however a deep seated fear that the precept of a simple profits, once mounted and practiced, is some thing that works towards the very logics of compulsion and class battle capitalism is depending on. And this is motive sufficient to assist it.

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Gender Inequality In Business

Women in Business

This year INSEAD celebrates 50 years since we had our first MBA participant. INSEAD is celebrating women in business, showcasing its research on topics related to gender, and organizing multiple events that bring together faculty, alumni and students. And rightfully so. But then I look at the data and weep. I recall my Robert Frost “But we have promises to keep, and miles to go before we sleep.”

Data

How does INSEAD rank compared to peer schools? Luckily, the FT provides this data underlying its annual ranking, which I downloaded and analyzed. Here is how INSEAD looks: for percentage of female faculty we rank 93/100; 

Maybe this is not an apples-to-apples comparison since there is vast heterogeneity across the 100 schools. If I restrict the sample just to the top 20 schools, the closest peers, then we rank 19/20 for percentage of female faculty (only Booth School at Chicago does worse) and 18/20 for percentage of female students (only HKUST and IESE rank below INSEAD). For the # 1 business school, these are not good numbers. More must be done. In fact, our recent EMBA ranking took a hit because of our low ranking on gender representation among EMBA students and faculty.

But it not about rankings. INSEAD prides itself on diversity, and national diversity is only one element. Classroom discussions benefit from a diversity of perspective. We don’t do so well along dimensions of gender and even economic or class status. In many programs at INSEAD, participants can cruise through without encountering a single female faculty member. MBAs can go through 6 months of core courses without encountering a single woman faculty. These reflect not explicit choices within the organization but heuristics, incentives, attitudes towards risk, and various implicit choices that result in fewer female faculty in the classroom. But they are insidious nonetheless.

Stepping Bravely into the New/Old World

Improvements on this dimension is only one aspect of the challenge. An immediate follow-up question is what does life look like for a fresh female MBA graduate?

In 1970, only 4% of MBA graduates in the US were women. By 2016, this number had increased by nearly a factor of 10 to 34%. This remarkable narrowing of the gender gap among MBAs is at first blush great news. But these are just the gender differences at graduation. What matters is the entire career trajectory and here the gender gap re-emerges. We see this happening along two dimensions – a declining participation in the labor force by women over time, and more importantly, a rising gender gap in earnings. 

All numbers from now on are based on surveys of Chicago MBAs who graduated between 1990 and 2006, in a paper published by Bertrand, Goldin and Katz. They find that at the start of MBA careers, earnings by gender are almost identical. This is the good news. But five years out of the business school, women’s annual earnings are 70% of that of men (30% lower). 10 years out the gender gap in earnings grows further – women earn only 55% what men do. Essentially, the gender gap reemerges with a vengeance and fairly quickly. This is accompanied by a rising gender differences in labor participation rates over time – a decade after graduation, 13% of women stop working compared to only 1% of the men. Equally prevalent is part-time work amongst women MBAs – 10 years after graduation another 18% are working part-time, most of which is self-employment.

Labor economists have identified three reasons for this large and rising gender wage gap over time after completion of the MBA: differences in choices and outcomes while in the business school (e.g., number of finance courses taken or GPA at graduation); career interruptions; and differences in work experience and weekly hours. These three reasons account for almost all of the gender gap in earnings (84% to be precise for the Chicago graduates). The first is relatively less important because the gender gap in grades and courses is not very large. Instead, the large gender gap in earnings is mainly a consequence of gender differences in career interruptions and weekly hours worked. Women, over time, have more career interruptions and work shorter hours. Unfortunately, in the corporate and financial sectors, the relationship between income and experience is highly non-linear with heavy penalties for a single career interruption. The relationship between work hours and income is also highly non-linear (convex) in these sectors. Building continuous experience in these positions, and agreeing to continuous long and inflexible hours on the job matters a lot more than “leaning-in” and bargaining fiercely for wage raises.

Not surprisingly, almost all of the career interruption and differences in weekly hours worked is due to the decision to have children. MBA mums’ labor participation rates are 20% lower compared to both men and women without children. And those who continue to work, put in 24% fewer weekly hours. The impact of a kid on labor supply grows over time – a year after birth, hours by women fall by 17% while three to five years later, hours decline by 24%. Essentially, it gets harder to stay in the fast lane and women adjust their labor supply decisions, by choosing family-friendly jobs, and avoiding jobs with insane hours. The latter are the ones with greater career advancement possibilities, in a narrow monetary sense. The deviation from the norm of insane number of weekly hours (74 hours per week for investment banking and 61 hours for consulting), inflexible demands on time (travel commitments and inflexible schedules) and continuous employment (no breaks,) are greatly penalized in the corporate and financial sectors.

Going beyond business school graduates, a similar pattern persists. Pharmacists, for example, have a really small wage gap, but lawyers, for whom contact hours matter, exhibit large gender wage gaps. A similar pattern across occupations shows up in the UK. The biggest gender pay gaps are again in the finance profession. Goldin’s research also found that workers in industries with large wage gaps are more likely to say their jobs value those who "develop constructive and cooperative working relationships" and that their company generally determines their "tasks, priorities, and goals." So leadership pressure that emphasizes close working relationships, co-location for innovation, and Marissa Mayer like bans on remote work, may worsen gender inequality.

With the wage gap twice as big for women with kids than those without, the fundamental reasons behind the wage gap seem structural rather than negotiating skills or an aversion to leaning in. The root cause is inflexible workplaces with rigid hours. Some professions have transitioned towards flexibility – pharmacists are no longer family owned but are part of large chains. Pharmacists are now interchangeable so women have more flexibility in choosing when to work. We see this in medicine as well -  doctors are shifting from one-person practice to larger multi-doctor health care facilities.

Some argue that the rise of the gig economy with flexible hours, and setting your own rates and times are appealing prospects and may narrow the gender wage gap.This may be overly optimistic. High-paying, high-contact professions such as CEOs, lawyers, M&A specialists, etc. are not going away. And the polarization of the job market, with some high-paying occupations and a mass of low-paying occupations, as a result of digital technologies, globalization and the rise of machines, may be accompanied by a rising, instead of a declining, gender wage gap. 

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Some Silliness from the FT

The FT published one of its periodical laments about how business schools are failing the MBAs yet again by not teaching skills that are highly valued by employers. All such articles follow a familiar pattern: Employers want skills a, b, and c; But business schools teach A, B and C. It ends with a Kiplingesque lament of "and never the twain shall meet." Later, this spawns a spate on articles on the value of the MBA, the revision of curriculum ('Where is your digital strategy, my good sir/madam?"), the future of jobs ("where are the robots and have they finally risen?"), and other such mind-numbing nonsense. In the meantime, top (but not all) business schools inexorably increase tuition, but magically seem to find students willing to pay them. 

The FT article made me laugh though. Above, are the five most and the five least important skills according to employers they surveyed. 

So basically, employers want friendly and gregarious people who show up on time, access and experience the Interwebs in multiple ways, but can somehow grapple with complex problems. So what if they lack statistical and data skills, are ignorant of the basics of marketing and finance, unaware of the larger issues of business and society, and have only a working knowledge of the Microsoft Office suite. Ironically, these same employers find it hard to recruit people knowledgeable in financial forecasting, big data analysis, and brand building. The natural question is why do they even try to recruit such people since they deem these skills pretty much useless. 

To get to this data, the FT surveyed 48 employers across 12 sectors from all over the world, including Brazil, China, Nigeria, US and Europe. As any MBA core course on statistics will tell you, this is severely under powered for a sample. Essentially, the sample size is too small to draw any robust conclusions. Employers who did not see the value of complex statistical skills will ironically miss this point but surely not the FT. If you are contemplating an MBA, do not base your decision on this survey. 

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In the Dark About Left-Handedness

My younger daughter is left-handed. I am teaching her how to write her numbers more legibly and being right-handed I quickly realized that this was going to be hard. So as a good academic, I asked Google to look into this and ran into an internet meme of left-handers dying earlier than right-handers. Here is the original mention in the New York Times. One of those classic "study says, blah blah blah" stories that newspapers love publishing and all of us love nodding our heads to. As usual, it is based on research, and has a truthy feel to it. 

The year is 1991, and Dr. Diane F. Halpern of California State University at San Bernardino and Dr. Stanley Coren of the University of British Columbia, publish an article in the New England Journal of Medicine. Their data show that left-handed people die when they are much younger than right-handed people. They obtained a random sample of deaths from Southern California and asked family members if the person who died was right or left-handed. In their sample, left handers died at an average age of 66 compared to 75 for right handers. They attributed it to left-handers struggling to cope in a right-handed designed world – think cars, heavy machinery etc. Buzzfeed has a funny/empathetic list (depending on your handedness) of worst things in this world for left-handed people. Check #11 which refers to the New England Journal study (left-handed people die 9 years earlier than right-handed people). 

But this finding is actually false – it is a subtle artifact of a sampling problem in the original study. The thing to realize is that in earlier times kids who were natural lefties were trained/forced to become right-handed and eventually identified by others as right-handed (remember family members answered the question, not the dead chap;) We don’t force young left-handed people to switch today. So in their sample of deaths, older folks will tend to have more right-handed people (those who are genuinely right-handed plus those who were forced to switch). Whereas amongst people who died young, a higher fraction will now be identified as left-handed. So if you divide this sample into left and right-handed people, the average age will be higher for right-handed people, by 9 years approximately. The researchers did not realize this and this led them to conclude that left-handed people die young – a horrific meme that prevails to this day. This is my attempt to reassure all left-handed people reading this. And yes, the title of the post is a play on “The Left Hand of Darkness.”

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