What do you earn?

Helen Kelly linked to an advice column in the Herald which suggests that while it’s perfectly okay to ask people how much they paid for their house, it’s a no-no to ask about their income.

It’s a great collision between two myths which reinforce a lot of terrible ideas we’re told about people, and value, and solidarity.

Of course you can ask people – with proper etiquette – what they paid for their house. House-buyingness is next to godliness. Buy a house young and you’re an entrepreneur. Own multiple properties and preach the virtues of “treat ’em mean, keep ’em keen” and you get headlines. There’s no shame in owning one house, five houses, or making millions of dollars literally being subsidized by a state which won’t provide decent housing for people in need.

But there’s plenty of shame in asking people what they earn. That’s private information, after all, and you’re an individual standing on your own two feet and by god, if other people (who aren’t as good and productive as you) find out what you get, they’ll try to steal it!

Or as advice columnist Lee Suckling put it:

Asking somebody about his or her salary is far less permissible. This is purely because it’s none of your business.

The only people that need to know how much you earn are your boss and your spouse.

It’s the gospel of self-interest. You’re an individual. You’re think as an individual. You function as a good little rational economic unit working purely for its own gain.

One of the terrible aspects of our current system is how it unnaturally pits us against each other. You certainly shouldn’t look at the other people working around you and think “we’re in this together. We’re in the same situation! We should be treated fairly and given the same pay for doing the same work.” They’re not comrades. They’re competition!

We’re meant to take it on faith that each of us – the “you” who has to protect your good deal from the avarice of your fellow labourers – is getting the best deal. And we’re meant to see this as a good thing, because the boss wants us to sit at his table in the cafeteria, not them.

We’re meant to trust that the boss is properly sharing his or her profits with the people who created them. Unfortunately, a lot of them aren’t.

That’s what a lot of people working at Google discovered when Erica Baker created a shared spreadsheet of the salaries of people working at the company. Surprise surprise – they found people weren’t being paid equally for their work. And apparently managers at Google didn’t like this. Erica Baker isn’t working there any more.

The defensiveness is kind of understandable, but also shows the benefits of transparency for everyone involved. We know about unconscious bias. Most people don’t twirl their moustaches and announce “I’m going to pay women less because I hate them”. They don’t realise they’re doing it until it’s all laid out in front of them. And if they think of themselves as good people who aren’t sexist or racist, etc, it can be a shock to discover you were being sexist or racist, etc, in practice.

(In the same way, I doubt Lee Suckling sat down at his keyboard and thought “Haha! How can I reinforce a cult of individual self-interest today? Muahahahaha!”)

A final point: if you’re in a unionised workplace with a collective agreement – and I acknowledge they’re the minority – you do see what your coworkers are earning. You know that the same job is paid at the same rate, or that everyone in your team sits in the same pay band. It doesn’t ruin morale.

What do we see when the people in a workplace or industry are in the union? Higher wages, better conditions, and fairer pay for men and women.

the incredibles coincidence

So I’m sorry, but I’m going to keep on being impolite. Because “politeness” is capitalism’s way of tricking us into not comparing notes and realising just how much we’re all getting exploited.

No fix for housing affordability as long as we ignore what’s actually affordable

Housing affordability has been a huge issue in New Zealand for a long time, but some extra fuel has been added to the fire by a recent survey which shows housing in Auckland is less affordable than in New York, Los Angeles, or Tokyo.

The survey ranked 378 cities in nine countries and considered the cities affordable if the median house price was a maximum of three times more than the median annual household income.

Auckland’s median house price is $613,000 – 8.2 times the median income of $75,100.

There are a lot of reasons for housing being unaffordable – property speculators driving the prices to ridiculous levels, a National-led government which would love to see wages drop – and a lot of different solutions, depending on whether you listen to the people who make money flipping property (open up more land to development, relax regulations on the building industry) or the people who care about people (a living wage, more stringent taxation on speculation).

Personally I think anyone who looks at Auckland and goes “you know what this city needs to do? Sprawl more!” needs to be banned from ever commenting on Auckland issues because they clearly don’t live/have never lived there (or at least, not in the sprawl they proclaim to love).

Principally I’m concerned by the relaxed attitude Mayor Len Brown seems to have:

He defines “affordable” as under $500,000, which is still more than six times the median household income, but insists more options are being developed.

“A good number of [new apartments] are high $200,000s to low $400,000 purchase prices, and what we’re seeing with those developments is they are selling out,” says Mr Brown.

“The most recent example I’ve got is that the St James apartment development, which is being built in conjunction with the renovating of the great old St James theatre. That’s only just come on for pre-sale, and it’s already pre-sold by half – and they haven’t even started the project.”

I immediately question whether the kinds of people who can pre-buy apartments which haven’t even started construction are the kind of hardworking/struggling/middle-New-Zealand families who find it impossible to get their first home – if only because banks demand a far higher deposit on apartments. Even if you’re talking only $280k for the place, you may need to find over $80k just to get your foot in the door.

And it brings to mind what I was saying just yesterday about taking numbers out of context: what use is it knowing that unbuilt apartments are selling like hotcakes unless we ask who is buying them? What proportion are first-home-buyers? New Zealand-based investors? Overseas-based investors? Corporate interests?

But the other problem is this: Brown defines “affordable” as “under $500k”. This is a common bit of silliness in the house-price debate, with even Labour under David Shearer declaring that “affordable” covered everything from $300,000 on-average-per-house to $550,000 for a single-family home.

The problem is, the Demographia survey defines “affordable housing” as a median price of no more than three times the median household income. Across New Zealand, for the year ending 30 June 2014, that was $72,394 – giving an “affordable” median price of $217,000. For Auckland, as quoted above, it’s $75,100 – a bit higher, but we’re still talking a median of $225,000.

Building a lot of apartments in the “high 200s to low 400s” might drag the current obscenely-high median lower, but it’s still not getting us anywhere near “affordable”.

There may be many reasons for housing unaffordability, and many possible solutions, but we’re never going to make progress on the issue as long as we can’t even be realistic about what “affordability” is – and acknowledging that it’s far less than those of us lucky enough to already own our homes would assume.

Alternative numbers

In my post yesterday I said:

… there’s something obscene about the way the economic story gets framed: the figures on a page, the points on an index, the number of dollars someone can swap for a number of different-coloured dollars.

Let me revise that a little.

Numbers can be incredibly useful for telling a story. For example, in the article I linked to in that post, there are these numbers about the size of Housing New Zealand’s “priority A” waiting list:

June 2007: 133
June 2008: 248
June 2009: 261
June 2010: 368
June 2011: 402
June 2012: 425
June 2013: 1290
June 2014: 3188

There are these numbers from FIRST Union about the $4.14 million package paid to ANZ’s CEO:

“That’s $80,000 a week – more than most bank workers earn in a year.”

And it can be a problem when we just don’t have the numbers:

[Child Poverty Action Group] spokesperson Donna Wynd says, “The lack of data means the public has little idea of whether the government’s “relentless focus on work” is actually improving outcomes for children, or protecting vulnerable children – something the government claims is a goal of welfare reform.  Living on a greatly reduced income, with benefits cut by half, has major consequences for children so it’s critical to know the number of children affected by sanctions and for how long.   The public deserves to know the impact of pouring millions of dollars into reforming social assistance.”

The problem is this: to most people – even university-educated people like me – the kinds of numbers we usually hear about are completely opaque. We’re expected to take it for granted that if mean quarterly household incomes have risen, it means people are doing better. Or if the performance of manufacturing index grows for three consecutive months, it means people are doing better.

People are not doing better in New Zealand. Even people like me, who don’t have a lot to fear from three more years of a National government, do not prosper when society grows more unequal, when financial poverty forces people to live in cars, when preventable diseases are rampant, when businesses move their work overseas because of a lack of infrastructure and jobs training, when desperate people tune out of society and turn to addiction or crime.

Numbers can be a guide. They can be useful – even necessary – to figure out what’s working or where more work is needed. But unless they are related to the real lives of people, we should stop giving them weight. Because people are more important than numbers.