Motivation and Incentives - Are the Rich and Poor Different?

March 19, 2014
Posted by Jay Livingston

Economic policies often rest on assumptions about human motivation. 

Rep. Ryan (Republican of Wisconsin): 

The left is making a big mistake here. What they’re offering people is a full stomach and an empty soul. People don’t just want a life of comfort. They want a life of dignity — of self-determination.

Fox News has been hitting the theme of “Entitlement Nation” lately. The Conservative case against things like Food Stamps, Medicare, welfare, unemployment benefits, etc. rests on some easily understood principles of motivation and economics.

1.    Giving money or things to a person creates dependency and saps the desire to work. That’s bad for the person and bad for the country
2.    A person working for money is good for the person and the country.
3.    We want to encourage work
4.    We do not want to encourage dependency
5.    Taxing something discourages it. 

Now that you’ve mastered these, here’s the test question:

1. According to Conservatives, which should be taxed more heavily:
    a.    money a person earns by working
    b.    money a person receives without working, for example because someone else died and left it in their will

If you said “b,” you’d better go back to Conservative class. A good Conservative believes that the money a person gets without working for it should not be taxed at all.*  

Not all such money, of course.  Lottery tickets are bought disproportionately by lower-income people.  If a person gets income by winning the PowerBall or some other lottery, the Federal government taxes the money as income. Conservatives do not object.  But if a person gets income by winning the rich-parent lottery, Conservatives think he or she should not pay any taxes.

What Conservatives are saying to you is this: working for your money is not as good as  inheriting it.** This message seems to contradict the principles listed above. But, as Jon Stewart recently pointed out (here), Conservatives apply those principles of economics and motivational psychology only to the poor, not to wealthy individuals or corporations.

Me, I’m with Rep. Ryan on this one. I think that the children of the wealthy would not at all mind paying considerable taxes on their inheritance. What abolishing inheritance taxes offers people is a full stomach (not to mention a full bank account, stock portfolio, a full house or two, etc.) but an empty soul. To repeat the Wisdom from Wisconsin: “People don’t just want a life of comfort. They want a life of dignity — of self-determination.”

Unfortunately, Conservatives want to take away that dignity and self-determination
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* Conservatives like to call the inheritance tax the “death tax” as though a person is being taxed for dying. But it’s not the deceased who is being taxed. It’s the lucky people who are given the money.

** Conservatives also favor lower taxes on other ways of getting money that are available mostly the wealthy and involve little or no work – gambling on stocks and more complicated derivatives for example.

Poverty – Race, Ryan, and Rhetoric

March 18, 2014
Posted by Jay Livingston

Poor Paul Ryan – he said what he really thought. That’s not always dangerous, but this time it was about why Black men don’t work, and Rep. Ryan’s explanation was that there’s something wrong with the men, their families, and their culture.

You can’t blame Ryan for his statement. His guard was down. He was among friends, being interviewed by William Bennett, a whale of a conservative. Bennett set the ball on the tee:

We’re setting records in terms of people not working. . . . There’s a cultural aspect to this . . . Boys particularly learn how to work. Who teaches boys how to work. . . . A boy has to see a man working, doesn’t he?

And Ryan took a swing:

Absolutely. . . . We have got this tailspin of culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working or learning the value and the culture of work, and so there is a real culture problem here that has to be dealt with.

When a reporter (lauren victoria burke of Crew of 42 - here) later asked Ryan about the racial implications in his statement, Ryan first tried the standard dodge” “it was taken out of context.” Then he went for total denial:

This has nothing to do whatsoever with race. It never even occurred to me. This has nothing to do with race whatsoever.

Rep. Ryan was using here a rhetorical device known as “a lie.”

The context for the Bennett interview was Ryan’s recent report on poverty programs, particularly those that encourage “dependency” rather than work.  Nor did Ryan embellish or add relevant ideas that were left out of the quote. So the statement was perfectly in context. As for race, the term “inner city” is so often to mean Black that it can’t even be considered a code word; it’s a synonym.

When burke (in a West-Wing-like walk-and-talk) pointed out the racial implications, Ryan suddenly remembered that poverty and unemployment were not purely inner city problems

This isn’t a race based comment. It’s a breakdown of families, it’s rural poverty in rural areas, and talking about where poverty exists — there are no jobs and we have a breakdown of the family.

Ryan’s second thoughts are accurate.  In fact, rates of poverty are higher in rural areas than in metro areas.  The difference is slight in most regions, probably because metro areas have so many people who are not poor. But in the South, the rural-urban difference is unmistakable.

(Click on the graph for a larger view.)

As several others have pointed out, it was only when Ryan’s image of poverty expanded to include rural Whites that his explanation expanded to include what should be obvious – the lack of jobs.  We can't really know the implicit associations in Rep. Ryan’s mind.  But it certainly looks as though they go like this:  Why are inner-city Black people poor? Because of their culture – they haven’t learned the value of work. Why are Whites in Appalachia poor? Because there are no jobs.



HT: Eric Volsky at ThinkProgress for the graph.

(An earlier version of this post had Ryan as a Senator. He is in fact a Representative. What could I have been thinking.?)

Jazz and Rap, White and Black

March 16, 2014
Posted by Jay Livingston

“Dave Brubeck Was The Macklemore Of 1954,” wrote Patrick Jarenwattananon, NPR’s jazz blogger (here), after Macklemore’s post-Grammy text apologizing to Kendrick Lamar.

Sixty years earlier, Time magazine put Dave Brubeck on the cover, and in 1954 being on the cover of Time was a big deal. Brubeck’s quartet  was on tour with the Duke Ellington orchestra at the time, and Brubeck felt, as did many others, that if any jazzer was going to be on the cover of Time, it should be Duke. (Time put Ellington on the cover two years later.)

Jarenwattananon hears in these stories a recurrent motif in American popular music:

Both also fit into a longstanding narrative in American popular music. White musicians play music of black community origin. Then, buoyed by systemic privilege, they enjoy mainstream success prior to the black artists they were initially inspired by. And they attempt to allay the guilt by deferring to said black trailblazers.

That’s almost certainly true of Brubeck. His popularity owed much to Whiteness. It wasn’t just that Brubeck himself was White. His music was White. (The frequent criticism of Brubeck among jazzers was that he didn’t swing – a valid criticism.*) In the early 50s, he set out to popularize his music by touring colleges, and in that era, college campuses were nearly all White. That success enabled him to move from a small label (Fantasy, with its translucent wine-colored records) to Columbia. His first record for that label was  “Jazz Goes to College.”

But the Brubeck and Macklemore stories are different in some important ways.  Jazz, unlike rap, has never had widespread appeal, especially among Whites.  So the audience for jazz à la Brubeck was a lot bigger than the audience for what Black jazz musicians, including Ellington, were playing. If Time was looking for someone emblematic of the surge (tiny though it was) in the popularity of jazz, Brubeck was the likely candidate.  Besides that, Time is a news magazine, and in 1954, Ellington  was not new; Brubeck was.

Does any of this apply to Macklemore?** He works in a genre that, even in its least White forms, is already popular among Whites. The White audience for rap is huge.*** Also, it’s not as though the White media have been ignoring Black rappers. Many a Grammy had been awarded to Black rappers before Macklemore. But in 1954, only one other jazz musician of any color had been honored with a Time cover. That honoree was Louis Armstrong.

Others who know more about rap and the Grammys than I do can correct me, and obviously it depends on who votes.  But my impression is that Macklemore’s Grammy did not have so much to do with “systemic privilege.”  Nor do I think he won because he “enjoy[ed] mainstream success prior to the black artists [he was] initially inspired by.”

Hat tip to a regular reader and erstwhile copy editor of this blog for referring me to the NPR story.
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* To swing is a term that defies precise definition – perhaps the difference between swinging and not swinging amounts to a matter of microseconds in the length of notes and perhaps the choice of tonalities – but jazzers know it when they hear it. And when they don’t.

** I know almost nothing about Macklemore and his music – only that our sartorial preferences run to similar sources. Fuckin’ awesome.

*** You frequently hear the claim that the rap audience is  70-75% White.  The  WSJ’s “numbers guy” Carl Bialik checks it out as best he can (here) and concludes, “Conventional wisdom, for once, turns out to be mostly correct – with the caveat that there’s a lot we don't know about race and rap sales.” 

Losing Their Religion - And So . . .?

March 13, 2014
Posted by Jay Livingston

“Kids, I don’t know what’s wrong with these kids today,” sang Paul Lynde in “Bye-Bye Birdie.” That was 54 years ago.

Paul Lynde is gone, but we now have N. Bradley Wilcox (here) fretting about the Millenials.  Kids . . .

[their]ties to the core human institutions that have sustained the American experiment — work, marriage, and civil society — are worryingly weak.

Not as tuneful, but it’s the thought that counts.

Wilcox is professor of Sociology and the University of Virginia, also, according to the bio on the NRO article, director of the Home Economics Project at the American Enterprise Institute and the Institute for Family Studies, so he ought to know.  He looks at data from the Pew Survey and the General Social Survey and concludes that the Millenials unless they change their ways as they grow older, will lead the country to political and economic disaster.*

Philip Cohen, on his Family Inequality blog (here), has already pointed some of the problems with Wilcox’s interpretation of the data on work and trust. Philip also provides a link to his earlier criticisms of Wilcox’s assertions about family.

It’s the “civil society” part that interests me. But how to measure engagement in civil society? Voter turnout among the young?  That was slightly higher in 2012 than it was a quarter-century earlier.  Wilcox does not use that. Nor does he use rates of volunteering. Instead he uses a measure of how religious a person is. Here is the graph he borrows from the Pew Survey.

Wilcox puts faith on a par with work and family.  But what benefits does personal religious conviction bring to the society?  Wilcox suggests that a willingness to trust others is a general social good.  And among younger people, the very religious are more trusting, though even among the Very Religious, those distrustful outnumber the trusting by more than two to one.

(Click on a graph for a slightly larger view.)

Interestingly, the Not Religious are more trusting than are the two middle categories, Moderate and Slight.  (The differences, with 900 people in the sample, are not quite statistically significant at the .05 level. The differences between Very Religious and Not Religious do not come close to significance.)

The religious dimension produces its largest difference in rates of marriage.

The Very Religious are the most likely to be married, the Not Religious the least. Wilcox and other conservatives see marriage as good for society and for the individual, and it is . . . in some ways.  Married people are more likely to say that they’re happy. But on other measures, like work, education and income, being religious seems to lose its advantage. 

Work: Wilcox says “full-time work remains the best way to avoid poverty and to chart a path into the middle class.” It also brings “an important sense of dignity and meaning.”  But according to GSS data, religiousness is unrelated to full-time work.

Education: Wilcox says almost nothing about education. Most Americans assume that it’s a good thing for both the individual and the society. School is also one of the important institutions of our society, so presumably staying in school indicates a commitment to civil society.  But it is the Not Religious who get higher degrees, while the Very Religious are more likely to drop out.

Income: Money is obviously a good thing for the individual. But it also matters for civil society.  Most measures of civic engagement (voting, participation in organizations) rise with income. Again, the Not Religious come out on the positive end of the scale.

The Not Religious are more than twice as likely as the Very Religious to have incomes of $80,000 or more. Or as Sen. Marco Rubio might interpret the data, losing your religion increases your chances of being rich by 116%.

In sum, except for being married, religiousness is either not related to the “core human institutions that have sustained the American experiment,”or the direction of the relation contradicts the way Wilcox would like the variables to align.

My point is not that Wilcox is wrong about a lack of civic engagement among the young. When my questions in class about current front-page political issues or important events in US history meet blank stares, I too have my Paul Lynde moments. I wonder: did students a generation or two ago know more about such things? I don’t trust my memory on that.

But whatever civic engagement is, and whether the Millenials have less of it, I don’t think we find that out by asking people about their religious convictions.

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* “a generation of young adults ‘unmoored’ from the institutions of work, family, and civil society, and distrustful of their fellow citizens, can end up succumbing to the siren song of demagogues, especially if the economy dips into a depression.”