Income equality

I have had many interesting discussions recently about income equality between the sexes. This post is an attempt to organise some thoughts.

Australia has a gender pay gap of nearly 18%, and women are very underrepresented in leadership positions. To start with, this is clearly unfair, unjustifiable and to the detriment of our species (numerous studies have shown that diverse teams make better decisions -- I'll leave the research to you if you are interested).

My idea (which I now find to be written about already -- see below) is that income nonlinearity contributes to the gender pay gap. I outline the idea here:

In Australia, at modest income levels, incomes rise in (approximate) proportion to the experience and responsibility of the employee. However, at higher levels this breaks down -- the trend becomes nonlinear and incomes rise exponentially with experience/responsiblity. The graph looks something like this:




In households where both a man and woman work (clearly not all households are structured like this but many are) there is a simple pressure to focus on one person's career because of the exponential rewards for seniority. Couple this with society's chauvanism (women need to challenge stereotypes to attain seniority in the workplace) and the fact that if the couple wants children the woman must take some time off, it makes sense for couples to in general focus on the man's career.

Note here that I am trying to understand what is happening in Australia now, not to argue that this is a good or just outcome.

This idea is described in detail in A Grand Gender Convergence: Its Last Chapter, by Claudia Goldin, who writes:
Whenever an employee does not have a perfect substitute nonlinearities can arise. When there are perfect substitutes for particular work- ers and zero transactions costs, there is never a premium in earnings with respect to the number or the timing of hours. If there were perfect substitutes earnings would be linear with respect to hours. But if there are transactions costs that render workers imperfect substitutes for each other, there will be penalties from low hours depend- ing on the value to the firm.

What to do?

If you think, as I do, that something needs to be done about gender inequality then what needs to be done? I think a good start would therefore be to reduce income inequality at all levels: reign in top incomes to be more proportional to experience/responsibility -- ie. return the exponential income increases to a more linear progression.

This will have the added benefit of a more egalitarian society in general.

The relative cost of things

My idea regarding ideas for public transport has resulted in conversations about the problem of smart phones. This post is not a defense of smart-phones -- I see them as a decidedly mixed-blessing (perhaps one day we'll be wise enough to get their benefits with fewer social costs). I wanted to briefly talk about our (me included) inability to estimate the cost of things.

In a previous post, I wrote about a new battery I installed on my ebike. I was shocked to learn that it is estimated to take 500 kWh to build a 1 kWh Lithium-ion battery. This is a lot.

Similarly, many environmentalists object to smartphones and other computer technology because of the environmental cost. A large part of this, though certainly not all, is the embodied energy contained in the device (much of which is sourced from fossil fuels). For a smart phone, this is estimated to be about 280 kWh.

This is also a lot of energy.

However, consider that 1 liter of petrol contains about 10 kWh of energy. That makes the lithium battery equivalent to about 50 L of petrol (or one tank of fuel in a car) and the phone equivalent to about 1/2 a tank of fuel. That doesn't sound like so much, and is largely because we don't think about the ludicrous amount of energy that petrol contains and cars consume.

I see this as a problem with the way we compare energy use. High tech gizmos seem like they use a lot of energy to make, but the good old-fashioned internal-combustion-engine uses orders of magnitudes more. In my opinion, a smart phone that allows someone to efficiently use public transport and avoid car transport (without requiring a large-scale re-organisation of suburbia) would be an excellent use of resources, and would hugely decrease our reliance on motorised transport.

With Europe as an example, it is clearly possible to have an excellent public transport system without a fancy mobile phone based setup. However Europe also has population density that Australia
lacks. For Australia to provide public transport service equivalent to Europe's (given our sprawling cities) would be expensive (it either requires replacing housing stock with higher density dwellings, or having lots of public transport routes). Using an idea along the lines of my dynamic route generation plan could let us service our cities more cheaply (in terms of energy and money!).

Some may argue that such a proposal requires a lot more than just a smart phone. Of course, that is true -- a setup like the smartphone network and google maps requires broadcast towers, routers, repeater stations, network infrastructure, GPS satellites, computer server farms, etc. All this infrastructure already exists. It is being used, right now, by many applications. From an environmental viewpoint, it is a sunk cost: the environmental damage is done, I think we may as well get what good we can from it.