It’s not really a practical issue since recent history has shown that not all beneficiaries of land restitution ultimately want to work the land. This is also entirely reasonable given the change of our economy from a primary economy to a secondary and tertiary economy over the last 50 years.

So when I read that the SA Institute of Race Relations states that more land could have been returned to black beneficiaries if money was not offered instead, I just wonder what the point is.

If people are accepting cash rather than land, it may well be because they want the cash rather than the land. Given land, I’m not aware that there is a prohibition on selling that land (which would be a poorer form of property right than they originally had so surely can’t be allowed) so we could end up in the same situation.

The danger for me is that the measures of land restitution could so easily, accurately and misleadingly, refer to the amount of land that has been restituted, or the amount of land currently in the hands of black South Africans, when this is clearly not an accurate measure of what progress has been achieved.

It’s worth reading the entire article, but the main message is that we cannot use the dream or story or fairy tale of imminent migration into space and other planets as an excuse not to deal with the very real problems we have on Earth right now. The misconceptions, Hollywood induced and otherwise, about the ease of space travel or even the extent of our current capabilities, are massive.

As with so many things, the stories that fill our society can be very different from the harsh reality.

“Searchers” were able to find emails more quickly than “filers” in a study by IBM covering 354 email users.  Filers took nearly a minute per email on average, with searchers only take a third of that time.

Managing poor performance is tough because it’s so easy and so attractive to shy away from communicating the truth. Avoiding conflict and not addressing problems is far worse for all concerned.

Robert Kiyosaki, author of “Rich Dad, Poor Dad” outlines a similar viewpoint in response to research that shows “nice guys earn less than mean guys”. His take is that it’s not actually “nice” to hide the truth and dance around issues. There’s never a need to make attacks personal, but sometimes the news is not good and it needs corrective action.

As Kiyosaki says, “cowards finish last”.

He continued: “Over the past decade, private hospital costs have increased by 121%, while over the same period, specialist costs have increased by 120%.”

Anyone who measures growth over long periods without using compound annual rates can’t be taken seriously. Abusing numbers for shock value is a sure sign of a weak argument or a lack of appreciation for long-term issues.

121% over nine years (2001 to 2009) equates to an average cumulative annual growth rate of 9.2%. Now medical price inflation of 9.2% is high given inflation over the period and modest real growth in GDP and salaries. But 9.2% tells a very different story to a layperson than 121%. The 9.2% is more useful, more comparable to inflation, more easily able to be understood. 121% is more shocking.

I was really encouraged to read this in a story, quoting Matlala from HASA:

He pointed out that while the green paper said private healthcare costs had increased 121% between 2001 and 2009, this should be contextualised against the backdrop of contributions to public healthcare increasing by more than 100% over the same period.

“Even the price of bread has increased 111% over the decade… We have to face up to the fact that the cost of living has gone up, including healthcare,” Matlala said.

Finally, someone quoted acknowledging that the 121% figure is utterly misleading.

Incidentally, 111% over 9 years is equivalent to an 8.7% annually compounded growth rate, just 0.6% per annum below healthcare cost increases. 

It wasn’t that long ago that financial institutions needed marble-clad offices and multi-decade histories to show that they were serious and were financially stable and could be trusted. Now the organisations that generate trust are barely a decade old and interact with customers in a purely virtual form.

“If Google got up and said we are going to offer a savings account, for me, that would be very difficult and confronting,”

I already use and love Google Checkout, which allows me to purchase items quickly from a variety of sites without having to enter (or share!) my credit card information with the new merchant. I honestly wish all merchants supported it.

PayPal has had a difficult history in South Africa, given that only very recently have we been able to withdraw funds from PayPal (and only via FNB even now). Still, I trust them more than most merchants.

One reason I might be concerned about Google as a bank is that since it would be so internationally successful, it would be an insanely attractive target for hackers. The number of attack vectors that would be pointed its way would be particularly concerning. (Yes, I’m writing this from a virtually virus-immune Mac for similar reasons.)

All companies must focus on trust and genuine relationships with clients, but no more so than financial services companies.

We only complain about what we don’t like

Nobody complains to their boss that they are overpaid. Nobody complains that their pension or social security increases were above inflation last year.

We don’t understand the size of countries and continents

Africa is huge. More of an issue for Europeans and Americans, but the problematic views of the size of Africa due to mapping “projections” used to represent an almost-sphere onto a flat map are almost universally held.

The Real Size of Africa

We don’t understand our economy (or at least US students surveyed don’t understand their economy)

Bill Goffe surveyed his students [pdf] with worrying results:

1. Students assumed 35% of workers earn minimum wage compared to the 2007 actual statistic of 2.7%
2. Students thought recent US inflation was around 11%, when the real answer is basically 0. (and google is apparently planning some sort of price index of their own)

Plenty more where those came from.

Then a few previous posts of mine highlighting these problems

Estimating the ERP is hard, but the range of common flaws is astounding.

We like to complain about electricity prices, when we haven’t figured out that we pay for it all anyway.

Someone threw a shocking figure at me today. They said that the unemployed under age 35 in South Africa comprise 75% of the unemployed population. I believe the figure comes from Adcorp.

Like many statistics that are bandied around for shock value, this one is more fluff than substance. Here’s why.

The real view of the numbers

Here’s the data from the 2007 community service.

Two lessons from misleading statistics

Some graphical insights

Unemployment distribution by age from 2007 community survey

Unemployment status by age from 2007 community survey

Who stops working?

Before we can consider gender differences in unemployment and economic status, it’s important to understand the different life expectancy of men and women:

Population MF ratio from 2007 community survey

More boys are born than girls. This graph shows that by age 15, there are still slightly more boys than girls because of this. This ratio stays more or less constant until around age 30, where it seems the ratio of men to women actually increases. This may reflect fatal complications of pregnancy and child-birth (I’m not sure). The slight decrease between ages 18 and 25 reflects the “accident hump” in mortality where due to risky, testosterone-infused and culturally enforced behaviours, more young men die than eminently more sensible young women.

However, soon after age 30, the ratio plummets as men die with significantly higher probability than for women. This, incidentally, is the reason annuities are more expensive for women to buy than men – women live longer in retirement years.

These differences in mortality and therefore life expectancy have an impact on employment. The same pregnancy and child-birth stage that potentially gave rise to a temporarily increased mortality rate for women also has an effect on employment, since some women who have the opportunity to cease working (temporarily or permanently) to raise a family do so.

Economic status by age and gender from 2007 community survey

The above, rather busy, graph highlights a few interesting points:

1. More females are unemployed than males at almost all ages. (Unemployment means “actively seeking work but unable to find it” and therefore does not include those women who choose not to work.) Women are still discriminated against in terms of employment. Whether some of this is fair (due to a very few jobs where physical strength is a prerequisite ) is up for debate, but it’s clear the problem is larger than be explained by reasonable means.
2. From the early 20s, fewer women are economically active (employed or unemployed). This remains at a fairly steady 15% extra of women are not economically active compared with men at ages above 30. This reflects a mix of family responsibilities and cultural / societal expectations for women not to work.
3. The rate of departure from the workforce increases far earlier for women than men, with an accelerating rate starting from around age 32 for women and only 43 or so for men.

So, the decrease in unemployment overall as age increases may initially be due to experience making them more employable, but rapidly becomes a factor of women leaving the work-force initially, then followed by men a decade or so later.

It’s hard to know from this data why so many men (and women) leave the workforce in their 40s. It would seem unlikely that a significant portion of this is due to “early retirement” on sufficient savings to relax.

Are children providing for parents even at this age? Are these frustrated workers who, on being retrenched, eventually give up looking for work and become “not economically active” and dependent on grants? What does this mean for our tax burden and government expenditure on social welfare?

I’ll continue to analyse this data over time, but I think that’s more than enough for one post. Isn’t it incredible what insights and data are available when the underlying info is shared comprehensively rather than popping sounds-bites?

Not least of which is what teachers actually earn. A full-page advert in newspapers last weekend gave some very respectable figures  for teacher salaries.  A teacher just starting out, with a 4 year qualification has a total cost to employer of around R229,000 per year. This includes 13th check, pension, medical aid and housing allowance, but is a surprisingly high number. It also included the then-proposed 7% increase (versus CPI at 3.7% at the moment).

The offer was increased to 7.5% since the original advert, but the numbers below are the unadjusted numbers in the advert. These are annual basic packages excluding benefits. (It’s unclear whether the before Total Cost to Employer columns include or exclude the 13th check, which is definitely included in the TCE column).

This advert prompted an immediate outcry from teachers writing to complain that they earn nothing close to that figure. This was followed up by government affirming that the figures are correct, noting that many teachers may not add up all the non-cash benefits.

IOL has an article purportedly showing that teachers are well aware of the extra benefits and aren’t paid what government claims .

The Daily Dispatch has a similar article, and includes a scan of a salary slip showing clearly (if the slip is genuine) that the government figures are bogus. From the salary slip, a teacher with 15 years of experience shows R12,885 as a monthly total cost to company translates to R167,505 as a TCE, assuming a 13th cheque equal to the entire monthly TCE (which is almost certainly an overestimate since it’s unlikely housing allowance and medical aid would be included in 13th cheque). This should be compared against the 2009 column since this doesn’t yet reflect any increases for the current year. The comparison shows that the TCE is probably slightly below what the government has as a basic salary for someone with 15 years of experience.

The figures are so different, that I can’t help wonder if it isn’t the government that is confused about the additional benefits. The total salary reflected on payslips includes the additional benefits (but probably not 13th cheque) and these benefits are deducted from the total before arriving at the cash pay for the teacher.

I can’t understand why this story hasn’t been ruthlessly followed up by the media. A few reports here and there aren’t enough. There are only a few options:

1. The government blatantly lied about the figures.
2. The government is confused about what it actually pays teachers (wow – this is problematic)
3. Teachers are not paid consistently. Perhaps some teachers do earn what the government put out in the advert, but others don’t. (How is this fair, and does the government even realise this?)
4. Teachers are misleading the press about what they earn, either inadvertently or deliberately.

Surely this is massively newsworthy no matter which of the options is correct? Doesn’t this change the bargaining positions completely?

Even if the gross figures in the table are wrong, the relative sizes might still be correct. According to the table, teachers have been getting average annual increases over the past four years of between 9.7% and 11.1%. These are not insignificant increases at all given that inflation has average well below this point. Teachers have been getting real increases every year for several years.

It’s hard to justify this based on efficiency improvements (more on this in a later blog). It’s also hard to say that education has improved over this period (although this is much debated).

The experience adjustment translate to an additional increase of between 0.4% and 1.6% per annum. So an actual teacher being according to this scale would experience an annual increase of above 10% each year, when allowing for experience adjustments.

There are so many questions of fact here. What is the point of long-running strikes and heated debates about affordability and fair wages if we can’t even agree on the current numbers?