Download Gittinomics: Living the good life without money stress, overwork and joyless consumption PDF

TitleGittinomics: Living the good life without money stress, overwork and joyless consumption
Author
LanguageEnglish
File Size2.8 MB
Total Pages260
Table of Contents
                            Contents
Home economics: An introduction
PART ONE: FAMILY FINANCES
	1. The changing workforce
	2. Women at work
	3. The cost of kids
	4. The value of higher education
	5. The Great Australian Home
	6. Saving, debt and guilt
PART TWO: THE OUTSIDE WORLD
	7. Paying for health care
	8. Taxes—love 'em or hate 'em
	9. Crime and drugs
	10. Our ageing population
PART THREE: EVERYDAY LIFE
	11. Housework has value
	12. The pleasures of consumerism
	13. The shortage of time
	14. The attack on leisure
	15. Happiness
	Last word: My take-home message
Bibliography
                        
Document Text Contents
Page 1

Gittinomics PAGES.indd iGittinomics PAGES.indd i 17/11/06 12:33:18 PM17/11/06 12:33:18 PM

Page 2

Gittinomics PAGES.indd iiGittinomics PAGES.indd ii 17/11/06 12:33:19 PM17/11/06 12:33:19 PM

Page 130

124

of what economists call �opportunity cost��the thing you�ve had

to give up because you�ve chosen to do something else.

You can value your leisure at your after-tax hourly rate of

income from your job. If you�re the kind of person who does a

lot of things for yourself, it�s likely that the value of your leisure is

quite a bit less than the hourly rate you�d have to pay a mechanic

to � x your car, a painter to paint your house, or whatever. But

why is the professional�s hourly rate higher? Often, partly because

the pro can do a better-quality job than you can. Almost certainly,

because the pro can do the job faster than you can. But both those

factors are built into your opportunity cost. You have to give up

more hours of leisure than the pro would and you probably settle

for a lesser-quality job. So what�s the main saving from doing it

yourself ? The fact that your labour, unlike the professional�s, is

tax free.

When you look at it like this, you see why lower income-

earners are more likely to engage in this form of tax avoidance

than higher income-earners. Making the generous assumption

that higher income-earners are just as handy as lower income-

earners, the main difference between them is that higher

income-earners are likely to set a higher value on their leisure

time because their after-tax hourly income is higher. Doctors or

lawyers or business executives are less likely to try DIY because

their after-tax hourly income is usually higher than the hourly rate

they�d have to pay a tradesperson to do it for them.

But there�s another reason ordinary employees are more likely

to do it themselves. They work for a � xed 38 hours a week plus

the odd bit of overtime. Many would probably like to increase

Gittinomics PAGES.indd 124Gittinomics PAGES.indd 124 17/11/06 12:33:47 PM17/11/06 12:33:47 PM

Page 131

125

their income by working longer hours in their job. In the absence

of that, they can achieve the same result�make their take-home

pay stretch further�by doing jobs themselves rather than paying

other people to do them. (A limitation of this analysis, by the way,

is its assumption that all work, whether paid or at home, involves

�disutility��that is, people don�t enjoy doing it. In reality, many

people enjoy work and some may regard work they do around the

house as little different from leisure. But this just makes it more

attractive to exploit the tax advantages of do-it-yourself.)

The most sublime example of tax avoidance through do-it-

yourself is the person who gives up his job so he can build his

own home. There�s a lot of it about. Each year the New South

Wales Government issues about 15 000 permits to owner-builders

(though not all will have chucked in their jobs). When you give

up your job, what you lose is not what the boss pays you but only

your after-tax income. Then you�re free to do it yourself rather

than pay taxpaying sub-contractors to do it for you. Your labour

goes completely untaxed. Whether it makes � nancial sense turns

on whether what you lose by giving up your job is more or less

than what you save by doing it yourself (remembering to allow

for the likelihood that you�ll take longer to do it and be rough

around the edges). It�s less likely to make sense for someone with

a high-paying professional job; it�s more likely to make sense for

someone with a trade or blue-collar job. Once again, it�s a form

of tax avoidance more suited to lower income-earners than higher

income-earners.

The greater scope for the lower-paid to avoid tax by doing

it themselves is a leveller in our society. It isn�t taken account of

Taxes—love ’em or hate ’em

Gittinomics PAGES.indd 125Gittinomics PAGES.indd 125 17/11/06 12:33:48 PM17/11/06 12:33:48 PM

Page 259

253

Bittman, Michael, Meagher, Gabrielle and Matheson, George

(1998) ‘The changing boundary between home and market:

Australian trends in outsourcing domestic labour’, Social

Policy Research Centre discussion paper no. 86, University of

New South Wales, Sydney.

Ironmonger, Duncan and Soupourmas, Faye (2002) ‘Calculating

Australia’s gross household product’, Department of Economics

research paper no. 833, University of Melbourne.

Ironmonger, Duncan (1995) ‘Household industries’, in Kim

Sawyer and Joy Ross (eds), The Changing Structure of Australian

Industry, McGraw-Hill, Sydney.

Chapter 12 The pleasures of consumerism

Hamilton, Clive (2003) Growth Fetish, Allen & Unwin, Sydney.

Schwartz, Barry (2004) The Paradox of Choice, Ecco/HarperCollins,

New York.

Van Boven, Leaf and Gilovich, Thomas (2003) ‘To do or to have:

That is the question’, Journal of Personality and Social Psychology,

vol. 85, pp. 1193–202.

Seligman, Martin E.P. (2002) Authentic Happiness, Random House

Australia, Sydney.

Chapter 13 The shortage of time

Honoré, Carl (2004) In Praise of Slowness, HarperCollins, New

York.

Goodin, Robert, Rice, James, Bittman, Michael and Saunders,

Peter (2002) ‘The time pressure illusion: Discretionary time

versus free time’, Social Policy Research Centre discussion

paper no. 115, University of New South Wales, Sydney.

Bibliography

Gittinomics PAGES.indd 253Gittinomics PAGES.indd 253 17/11/06 12:34:17 PM17/11/06 12:34:17 PM

Page 260

254

Frey, Bruno S., Benesch, Christine and Stutzer, Alois (2005)

‘Does watching TV make us happy?’, Centre for Research

in Economics, Management and the Arts working paper

no. 2005–15, Basel, Switzerland.

Chapter 14 The attack on leisure

Veblen, Thorstein B. (1899) The Theory of the Leisure Class,

reprinted Penguin Classics, 1994.

Chapter 15 Happiness

Myers, David G. (1991) The Pursuit of Happiness, William Morrow,

New York.

Frey, Bruno S. and Stutzer, Alois (2002) ‘What can economists

learn from happiness research?’, Journal of Economic Literature,

vol. XL, pp. 402–35.

Australian Unity Wellbeing Index, <www.australianunity.com.

au/au/info/wellbeingindex> accessed August 2006.

Kasser, Tim (2002) The High Price of Materialism, MIT Press,

Cambridge, Massachusetts.

Diener, Ed (2006) Frequently asked questions, <www.psych.uiuc.

edu/~ediener/faq.html> (accessed 15 March 2006).

Lane, Robert E. (2000) The Loss of Happiness in Market Democracies,

Yale University Press, New Haven.

Frank, Robert H. (1999) Luxury Fever, The Free Press, New

York.

Gittinomics PAGES.indd 254Gittinomics PAGES.indd 254 17/11/06 12:34:18 PM17/11/06 12:34:18 PM

www.australianunity.com.www.australianunity.com.au/au/info/wellbeingindex
www.psych.uiuc.edu/~ediener/faq.html

Similer Documents