The M Society

Not Your Cup of Chai:

Since I am kind of convinced it is true, so I will just try to prove it head-on. If it doesn’t work out, a contradiction will be generated, and we could prove it by contradiction.

Here I need to remind myself not to take an example as a proof (e.g. “Cuppa is poor, ergo life is not fair and the society is M-shape.”). Can we take the GDP or average income of a particular country and start from there? Nope, because the income disparities will be canceled out and averaged.

How about this: Some governments will release data on household income, and it is a good starting point. Do note absolute numbers usually mean nothing, we need to note the trend, the nascent trails….

Popularity: 48% [?]

The Age (22/2/2008):

Families skip meals to pay rent

Act on negative gearing, say experts 

by Sunanda Creagh (Sydney) and Tim Colebatch (Canberra)

RISING rents are forcing thousands of Australians to skip meals and deny their children school excursions, according to new research.

This came as another study showed there will be a massive increase in the number of renters over the next 40 years as housing becomes increasingly unafforable to low-income earners.

Research by the Australian Housing and Urban Research Institute, based on surveys and interviews with 1400 renter households and 400 recent home purchasers, found that 26% of low-income renters surveyed sometimes go without food and 42% can’t afford school excursions.  Forty-seven per cent said that, even with improved income, rents would still be too high.

“Despite the government obsession with home ownership, private rental is the problem sector,” institute researcher Terry Burke told the National Housing Conference in Sydney.

Many home owners pay their mortgage by taking second jobs, but Professor Burke said: “Any economic slowdown means they could lose those jobs and then you have thousands who are going to be in trouble.  I suspect we are approaching that situation.”

He criticised negative gearing, the first home owners’ grant, capital gains tax and rent assistance as measures that add to demand for housing without boosting supply, but said he doubted the Federal Government would drop the policies.

A separate study presented at the conference, headed by hosing analyst Judith Yates of Sydney University, projects taht over the next 40 years, the number of households will increase by 50%, but the number of renters will almost double.

“In the future, as in the past, the majority of Australians will have affordable, secure housing over their lives,” the study said.  “(But) it will increasingly difficult for low and moderate-income households who have deferred home purchase to become home owners.”  The number of lower-income households in housing stress in the private rental market is expected to increase by 120%.

The study points out that home ownership rates are already falling among younger households.  Between 1981 and 2006, the proportion of householders aged 35 to 44 who do not own their home has risen from 25% to 32%.  The proportion aged 25 to 34 who are renting has swollen from 39% to 49%.

The Housing Industry Associatiation forecast that in 2007-08 there would be hardly any growth in housing starts.

Housing Industry Association director Chris Lamont said hosuing starts had stalled at a level providing about 20,000 fewer homes a year that Australia needed.  New rate rises would further restrict supply, putting more pressure on house prices and rents.

Popularity: 74% [?]

The “M-shaped Society” concept is a hot issue in Taiwan ever since Kenichi Ohmae defined it. I found this article published in National Policy Foundation (NPF) Research Report.

Ohmae’s concept has immediately caught the attention of the general public as well as government policy makers in Taiwan. Many have recently argued whether the income distribution structure has transformed into an M-shaped curve. For instance, consumer prices have escalated over the years, but the wage seems to have stood still. Education expenditures and child bearing costs have particularly surged and become unbearable to many families. Many people have therefore claimed themselves as “near poor” group. Those who have suffered irregular employment or unemployment may even fall into the so-called “new poor” class. On the other side of the island, it has been often reported that housing market in urban area has reached a record of high price, which is far beyond the affordable price for most people in the society. Luxurious goods have well sold at unprecedented price, which is hardly reached by the general public. It seems that a divided society is becoming a catchword for recent Taiwan society.

………..

Examining the unemployed population by age, we found that those aged 25-29 remained the highest rate of unemployment as compared to other age groups. The majority of those aged 25-29 are university and college graduates, who are conventionally expected to be in the middle-income class. This suggests that if the unemployment rate of high-educated population remains relatively high, the middle-class will be more likely to decline in the near future.

………..

Unlike in Japan, the earnings of workers in Taiwan did not significantly decrease in recent years. Taiwan seems to deviate from the M-shaped society as Ohmae defined. Although Ohmae focused on the decline of the middle classm, he did not provide any statistical measurement in his well-known book. We thus develop two tentative but handy measures for examining the shift of middle class, and coined them as “the Balance Index” and “the M-ratio” respectively. The former was constructed as a relative measure among different income groups, while the latter was designed as a measure indicating the change of the middle class relative to the overall contribution of people.

(link)

Popularity: 100% [?]

For richer, for poorer:

As Bulgaria’s stock exchange took a serious hit amid worldwide stock plunges and predictions, it emerged that last year’s strong growth in housing prices would not be repeated this year, a new survey found. And, the country’s relatively rich are getting relatively richer.

In Bulgaria’s first year of European Union membership, households earning more than 2000 leva a month tripled…from one per cent in 2006 to three per cent in 2007.

But for 56 per cent of society – the poor, the elderly, small town and village dwellers – the rate of rise in incomes was slower, according to the poll by Noema agency, released on January 22 and quoted by Bulgarian news agency BTA.

Most of the times, I think attitude is the thing that determine you to be rich or poor.

Popularity: 50% [?]

Why Living in a Rich Society Makes Us Feel Poor:

Put the question another way, however, and we seem a little less certain. Consider a choice between these two worlds:

World A: You earn $110,000 per year, others earn $200,000.

World B: You earn $100,000 per year, others earn $85,000.

Robert H. Frank is a professor at Cornell University and the author of “Luxury Fever.”

The income figures represent real purchasing power. Your income in World A would command a house 10 percent larger than the one you could afford in World B, 10 percent more restaurant dinners and so on. By choosing World B, you’d give up a small amount of absolute income in return for a large increase in relative income.

Which would you choose?

Popularity: 50% [?]

Associated Press

New figures on university endowments confirm it’s not just the “haves” and “have nots” in academe these days. Beyond the great majority of colleges, there’s a growing group of the newly rich schools, and — at the top of the heap — a tiny cadre of ultra-wealthy institutions.

The latest endowment figures from NACUBO, a college business officers’ group, highlight the growing prosperity but also the stratification among elite universities. That development is creating tension.

Education is a good investment.

Popularity: 41% [?]

The building of this site (The M Society not Them Society) was inspired by the concept of M-shape Society observed by Kenichi Ohmae, a Japanese business strategist and writer.

What is ‘M-Shape Society‘?

In a well-developed modern society, the distribution of classes is in a ‘normal distribution’ pattern, and the middle class forms the bulk of the society.

However, in the emergence of the ‘M-shape society’, the middle class in the society gradually disappeared. A very few people in this middle class may climb up the ladder and squeeze into the upper class, while the others in the middle class gradually sank to the lower classes.

These people experienced a deterioration in living standard. They may face threat of unemployment, or their average salary are dropping. Gradually, they can only live a way the lower classes live: e.g. take buses instead of driving their own car, cut their budget for meals instead of dining at better restaurants, spend less in consumer goods…

There may be still remarkable progress in economic development, the GNP may still rise, there may still be economic growth, and the national average salary may still rise. However, the wealth increase in this growth may concentrate in the pockets of the very few rich people in the society. The masses indeed cannot benefit from the growth, and their living standard is on the decline.

What was worse, the upward social ladder seems to have disappeared - opportunities and fair competition become fewer and fewer. People in the lower class can no longer climb up the ladder: they cannot earn a high-paid job or have stable employment, even if they have a high level of education. The places in the upper class were reserved by the upper class for their descendants.

This site is to observe whether the riches become richer, the poors become poorer. Is it possible for the rich to become poor, or the poor become rich?

Popularity: 47% [?]