04/27/15

So Career Day Paid Off

Thanks Emme!

I’ll be leaving soon for Munich to complete a summer internship at the Rachel Carson Center for Environment and Society. The opportunity will let me combine my interests in ecological resiliency and social sciences. I’ll also have the opportunity to see how an international research think tank operates. The RCC is funded by LMU Munich and the Deutsches Museum and began its operations in 2009. Seeing a think tank which is still in infancy and has already expanded successfully ought to be exciting.

This has given me the chance to reflect on a lot of what we went over during our career day and skills building talks. On the one hand we talked about what skills we already had. In my case, I was able to use both academic knowledge and experience as assets during my interview. A lot of European students seem to have less real work experience than we do in North America, and my prior summer jobs have given me a lot of background in leadership, independence, and drudge work. Sometimes you just need to sit there three hours late and finish the project that is due the next week. Not that this should be new for UBC students.

It’s also given me the opportunity to reflect on where I’m going with this new stepping stone. Over this year I’ve gotten more and more interested in the necessity of useful data and effective human capital. Part of this was due to my ECON 303 course, which discussed incentives of organizations, and FRE 420, where political economy and the inability of organizations and governments to act for the common good was an important theme. It’s beyond doubt that much of what comes out of the social sciences is research for research’s sake. So how to hold social scientists’ feet to the fire? How to produce practical, usable results? How can we incentivize organizations to do good work and incentivize governments to actually use this material? These are the questions I’m currently asking.

All in all I’m very excited about this opportunity. The themes we’ve discussed in GRS and in other courses will doubtless be a thread running throughout the work of the RCC.

04/27/15

Ecological Realism: Ruin Events and the Precautionary Principle

This is a slightly edited piece which I did for another project (here). It should be of interest to anyone interested in ecological systems and risk. 

Nassim Nicholas Taleb recently appeared on EconTalk to discuss his recent paper: “The Precautionary Principle (with Applications to the Genetic Modification of Organisms)”. Many of the debates on the issue could be described as “data drenched”. What I mean is that the arguments circle around the available data, rather than on appropriate decision-making. Let’s take the example of human impact on the climate. Most environmentalists, climate scientists, and their allies point to a collection of data which they say gives conclusive proof that human impact on the climate will have damaging results. Skeptics dispute the data and say that political pressure has skewed the conclusions drawn from it.

Taleb’s view would be rather different. Climate is a complex and dynamic system. That being so, our data will almost certainly not be without error. The clearest example of this is the Global Warming Hiatus. Increased energy in the climate system has not been reflected in temperature rises – a phenomenon which most models were not able to predict. Skeptics and political conservatives have learned entirely the wrong lesson from this. The Hiatus does not mean that the earth’s system will be entirely able to cope with current changes. It means that our models are not good enough to predict these changes with a sufficient degree of accuracy.

The worst case scenarios include rising sea levels resulting in huge population displacement, increased conflict, economic decline, and damaged ecosystems. This likely isn’t a ruin event for the human species – eventually, those who adapt will be able to create stability. But it would cause the destruction of communities, impacted states, and ecosystems. The result is that even a small risk should motivate us to take actions which mitigate these threats.

In the case of GMO’s, Taleb et al are not convinced that we can safely determine what the long-run results of widespread use will be. In a worst-case scenario, they could make the global food system extremely fragile. One harmful enough blight spreading across food-producing countries, and billions of people could find that hunger and starvation is not so far off. The death and destruction this scenario entails would mean that our global political and economic systems will be caught up in a ruin event. Taleb’s point is simple: even a tiny non-zero possibility of such an outcome demands that we exercise the precautionary principle. This makes the event “fat-tailed”:

“…if I gather a thousand people randomly…to watch and weigh them, and then evidently have the total weights, and then you add to that sample the largest human being on the planet, that person will not represent more than .3% of the total. You see? But if you do the same with wealth, you will have one of the total–you will be maybe because you have a lot of people living on a few dollars a day on the planet, 7 billion people total population, you have 3 or 4 billion very poor people. So, odds are you have maybe a million and a half net worth for your sample. And then you add to that the richest person on the planet, $75 billion, and look what happens. There will be a rounding error. So it means fat tailed is how much the rare event contributes to the total.”

Ecological realism demands a focus on proper decision-making in addition to good data. Understanding the nature of fat tails and ruin events is a required fundamental.

12/18/14

The Case For Big Development

This term, I had the opportunity in Professor Chris Bennett’s FRE 490 course to review two World Bank development projects located in China.

The first was a restructuring project from the 1990’s intended to improve how Chinese Nature Reserves across the country were run. Specifically, they wanted to modernize their operations and better track biodiversity. The second was in Henan province and focused on giving medium sized livestock operations access to waste management technology in order to reduce negative environmental effects.

A lot of discussions I’ve had in GRS give me the impression of a general bias against big development organizations, especially ones like the World Bank. Some of the most common objections are:

  • Big projects don’t understand local differences in needs and goals.
  • Big projects are controlled by governments and corporations and aren’t really about the local people.
  • Big projects tend to make more mistakes which are hard to fix because of the project scale.
  • Big projects aren’t able to cultivate personal relationships with communities the way small ones are.

While these objections have some validity, doing this research allowed me to see the strengths of big development organizations as well.

Both projects were focused on large scale structural changes stretching across civil service departments and involving multiple levels of government. The fact is that it’s simply not possible for small organizations to do effective work on this scale, even working together. The World Bank had a working relationship with China already and experience doing similar projects across countries. It has a massive amount of financial and human resources at its disposal. Given that civil services are notoriously resistant to change, the size of the organization ensured it would have the legal resources and backing of the national government, both essential in doing the work correctly.

Slower more incremental change would have been useless in these projects, especially the nature reserves one. Given that civil restructuring creates so much resistance, it’s very likely that one massive restructuring with central government support was easier and cheaper than multiple, conflicting small projects that weren’t big enough for the government to throw its weight behind.

That’s not to say these projects were perfect. There were some serious logistical mistakes in the nature reserves project, although the World Bank vastly improved its approach in the livestock one. Nevertheless, I would argue that given the nature of the project the World Bank’s scale of development was a strength in this case as well. In the reserves project, the World Bank intended to move redundant workers to new enterprises or else give them retirement packages. Unfortunately, many planned new jobs fell through, leaving workers unemployed or forcing them to retire early. However, the World Bank was able to arrange retirement packages for them that ensured they faced no decrease in living standards, something a small group would likely not be able to do. Moreover, the World Bank also has the logistical, financial, and planning resources to ensure the feedback and lessons learned are actually useful for future projects. While small projects can be very efficient, they often do not have access to the resources needed to vastly improve in future projects. The livestock project showed that the World Bank had improved on almost all the points we critiqued in the earlier project.

I’m glad to have taken this course. From an economics perspective I already knew that large groups (like natural monopolies) can sometimes harness resources more efficiently than small ones. I enjoyed seeing how this was also true for international development, contrary to some of the biases I have encountered from students and people in the field. Chris Bennett has a huge amount of experience and applies it to how he teaches the course, and I definitely recommend this for anyone in GRS, even if they don’t plan on working in development.

04/19/14

Knee Deep in Misery

In the course of talking about development in GRS, we’ve discussed the challenges faced by people living in unstable regions where the State is small or nonexistent, or run by corrupt politicians, or run by members of a tribe who only want to take care of their own interests, or some combination thereof.

This article by the highly unorthodox but always well researched War Nerd made me consider how the nation-state borders in Central Africa can cause non-specialists (including myself) to not always recognize how deeply conflicts in different countries are connected and develop as each other’s offshoots. The War Nerd’s article discusses how the ‘rebel’ groups in eastern Congo who were nearing Goma some years ago see their own activities. Basically, the 5-10 thousand man force led there by Laurent Nkunda was composed mostly of Tutsi forces, while the groups they were staging attacks on were of Hutu origin.

As most are familiar with the Rwandan genocide, we know that these groups have historically been in conflict. However, War Nerd points out that the Hutu groups are in fact not just of the same tribe as the Rwandan Hutus, but many times are the same people who participated in the 1994 slaughter.

The reason these Hutu are out in the jungle is simple: they massacred almost a million fellow Rwandans in less than four months…They didn’t change their ways in Congo, either. The Hutu militias kept their machetes (“pangas”), kept tight control of their people, and kept in practice by raiding local villages for women and girls. They’re famous for branding the women they capture like cattle, marking them as sex slaves forever. Sometimes they let them go, when they’re pregnant, so they can go back to their villages with a Hutu rapist’s baby in their belly…But most of the time, when they get tired of the woman they drag her into the forest, hack her to death, and leave her there for the animals.”

In light of such incursions, Nkunda’s response is to use his own Tutsi forces in counter-operations against the Hutu groups. The article points out that this is not some uncivilized warlord as the Western stereotype implies: Nkunda went to university, was a schoolteacher and actually speaks six languages, not the four the article reports ( English, French, Swahili, Kinyarwanda, Lingala, and Kinande). 

As for the Congolese State itself, it is more or less nonexistent in these eastern regions. The few UN troops provide most of the aid in the region. The article thus takes issue with terming Nkunda and his forces “rebels” as the Western media has tended to. It’s difficult to be a rebel when there’s no State of any consequence to rebel against.

This article brought two important things to mind for me:

Politically this map is outdated, but does that fact matter if ethnic territories are more or less the same?

1) Purely on the level of political geography, a map which shows Central Africa’s tribal regions might be far more useful than a Political Map if we are to understand the conflicts happening here. We have these conflicts in our minds: Rwanda, the DRC, Uganda, and further on Somalia, Sudan, and so forth. However, as we see here, viewing these as different conflicts is a result of the fact that as far as the news media is concerned, they’re different “issues”. Different debates, different topics, different news stories. Hotel Rwanda tells the story of a conflict which occurred in 1994, not one which is still occurring now. Except of course, Nkunda, his men, and his enemies would strongly disagree.

2) It is vital to understand, as many in the aid industry and UN/African diplomatic spheres already do, that the absence of the State is what allows such gangs to function. What is less understood is that all too often, the State is simply that gang which has been given legitimacy by the so-called “international community”. While that might make things easier when the UN is trying to figure out who to assist, it often does nothing for the people on the ground except make their enemies stronger. There’s no easy answer to this precisely because there seem to be no real options except either backing one gang over another, or else creating some sort of State entity and then imposing it on all comers. With worries of neocolonialism understandably hanging over the heads of many, this second option is not the preferred one of most in the field, not of most of the local population themselves.

That being the case, however, it is vital that the UN, AU, and States themselves have the strength to enforce treaties and to make the legitimacy of State institutions a reality on the ground. Every effort must be made to gain the support of different parties involved in the conflict, but the unwillingness or inability to back up the rules with force makes the State no State at all, but merely a preposition.

This is the political and military reality faced by millions living in these regions. Foreign intervention is viewed with suspicion, and again this is justified. But as the War Nerd’s article shows: at the end of the day, the buck must stop somewhere. If we truly wish to avoid further foreign interventions and also end civil conflict in the region, then international bodies or local States must be chosen and actually backed, in the full knowledge that they will be working with people who have done terrible things. But the work must go on, because it is precisely the unwillingness to take such steps which have led many to do them in the first place, as Nkunda and others can certainly attest to.

03/13/14

Trading Incentives: Local versus Global Economies

In my ANTH 330 class (Rural Peoples in the Global Economy, taught by Charles Menzies), we’ve spent some time talking about the greater care local populations take in managing the natural resources in their territory. This is true for the coastal fishing communities, both First Nations and settler. The same holds for the gladesmen of the Florida Everglades, who were cast as outlaws by both Swamp Reclaiming programs seeking greater agricultural land and the parks system which they evaded in poaching alligator hides. Finally, we’ve looked at the experiences of the fishermen of Bigouden, in the Breton region of France. Artisanal fishermen have long struggled both to compete with larger trawlers in their waters and as people affected by the impact they have on natural resources (in economic terms, a negative externality).

Each of these conflicts is between two types of trade: one of which is local, artisanal, and dependent on regional resources and harvesting populations, and the other of which is global, industrial, and able to move its operations internationally if necessary. In GRS and LFS, we generally have a prejudice toward the former. But let’s consider the rewards and costs of each:

Local economies have great benefits when it comes to the valuation and management of local resources. When a population is dependent on certain resources, it tends to value them more. Additionally, the existence of local and traditional ecological knowledge from generations of experience allows them to look back at past events and practices when deciding what course to take in a situation. Increasing the valuation of local resources is a question resource economists face during development. When impoverished rural villagers turn to black-market lumber trade, for example, it’s because the value of the money outweighs the value of conserving that forest in the short term. This means that institutions must exist which allow these black market lumberjacks to both become legal, and also to properly conserve the forest as they have a vested interest in doing. This is far easier with local economies when one resource pool is used by the whole community.

On the other hand, if this resource pool or economy is affected, the region can face recession, depression, or social collapse. This can be a natural disaster. In the case of many artisanal fishers, it is the collapse of fish stock caused by overharvesting by industrial trawlers. This is the cost which must be accepted in a highly localized economy. If the economy cannot be rebuilt, people will eventually migrate to different areas to try and make a living.

Global players have different incentives. As they can move around the world, they will go where it is most cost-effective to operate. If they can outsource labour, they will. Even in the case of fishing operations, we read about how trawlers will pick up and go from Europe to Africa. They can spend weeks in the ocean, raking in hundreds if not thousands of tons of fish. They aren’t dependent on a local region. This means they don’t have as much incentive to conserve the pool of resources and ensure that it’s properly managed. State regulation and consumer pressure are much more important in regulating them, but they also have the option of exit if they find themselves too restricted.

But consider the security which this global field of play can bring to not just the firm, but to its customers. If a region imports from multiple locations around the world, then if one of those locations is disrupted the rest can still deliver. If global trade institutions are in place, it’s also easier to move in resources from other areas to make up shortfall and rebuild economies following local shocks. That diversification creates an element of stability because of redundancy built into the system.

So our goal in constructing a resilient food system should be to try and incorporate elements of each form of stability into the system, in order to benefit from both. Each region has its own comparative advantages. Local cultures and thus the desires of local consumers generally evolve to accommodate these advantages. In that sphere, local economies are the ideal area to grow precisely because it can make these systems more sustainable in the long run. The question many in LFS should be asking is, what sectors is it appropriate to maintain global trade in? How can this be done? How can we stop the undermining of local economies? Do we use protectionism in some areas and free trade in others (that’s almost always a de facto “yes” in most countries)?

A synthesized local economy coexisting with appropriate global trade networks is more complicated than the urban farms which many like to imagine. It also comes with more responsibilities than Big Agriculture generally likes to have imposed on it. Nevertheless, it’s almost certainly going to be what results, one way or another, in the years to come. Thus, we should plan ahead and make sure that these networks have solid and sustainable foundations as we continue to work toward a more resilient food system.

02/12/14

The Poverty Industry: No Laughing Matter

But that doesn’t mean we can’t make a comedy about it.

Marketed as “Kenya’s first mockumentary”, The Samaritans tells the story of Aid for Aid, an NGO working in Kenya. Every NGO horror story is combined here: the boss, with his Masters and MBA, is flown in from abroad despite little experience, acronyms are created without names or projects in order to apply for grants, and development-ese jargon is the dialect of the office. Watch the trailer for the pilot below:

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Hussein Kurji, the creator, was inspired by the many disaster stories he heard from NGO’s. He relates one which had, as a prize for a fundraiser, a rhino hunt. The aim of the fundraiser? Saving endangered rhinos.

Those working in development definitely have lessons to learn when watching this series. In the wilds of international development, the messiah complex runs deep. The boss announces upon arrival that he is here to save “Africa.” It reminds me of an acquaintance who worked in the DTES and reported that some project members he worked with seemed hesitant to make decisions which would share the credit of success with other organizations.

Speaking personally, I wonder if this occurs more in small or large aid organizations. Individual organizers have more control in small ones, but leaders in larger NGO’s have a larger stage on which to promote their own reputations. Regardless, the focus on self-aggrandizement instead of service undoubtedly has an effect on the way projects are carried out, at whatever level. A key role may be to get beyond the idea of “saving” Africa, which still pervades a lot of people in development. I recommend taking a tip from business leaders, who increasingly view African countries as trading partners, with potential gains for both sides. This gets us out of an unhelpful mindset as well as helping us respect the proper dignity of all parties involved. For better or for worse, we can never remove ourselves entirely from a project and act in pure service to another. That might be just as unhelpful, since it would mean little motivation to begin work at all. But we can at the least admit that self-interest exists instead of trying to dress it up in the language of salvation.

Samaritans will make those who have experience in development laugh and provide a warning to those going into the industry (which it is) in one way or another. Watch trailers for episodes one and two:

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01/16/14

Delusional Pragmatism

“Keeping the public and press in the dark about what’s happening at the DFO is not without dangerous historical precedent, says Kelly Toughill, a journalism professor at King’s University in Halifax. “About 18 years ago the federal government ignored, then muzzled DFO scientists who were warning that cod was being over-fished in Newfoundland,” she wrote to me over email. “The result was the complete collapse of the cod fishery and the complete collapse of the economy of what was then Canada’s poorest province.”

Source

This Vice article is a good followup to my comments about the destruction and hiding of information regarding Canada’s natural resource industry by the Conservative government. Economists agree that access to information is essential to help business make the decisions necessary for their operations The suppression of this information will certainly make it harder to determine the true costs of these industries in the long run. In other words, the government is making industries with far less stability than is popularly believed into Canada’s economic foundation. Sound familiar? Think along the lines of a financial market based on bad mortgages.

The Conservative party has posed as a hard-nosed, realistic, pragmatic party informed by economic science and devoted to building up Canada’s economy in a productive industry, unlike bleeding heart Liberals and NDPers who would rather save a couple of grizzlies than build up Canada’s economy. This is false. These actions ignore basic economic principles about freedom of information for determining costs and externalities. This comes in addition torepeated warnings about the dangerously high level of Canadian private debt, recently at 165% of disposable income. This situation is dangerously similar to what the US faced in the run-up to the Great Recession: jubilation at a growing economy, high debt, derision when it came to criticisms, and suppression of information which revealed instabilities. Those currently entering the workforce should be weary of this situation. Try to limit (or eliminate) debt, focus on fields which you can find work in even during downward swings in the economy.

There’s a lesson here too for those who consider themselves pragmatic and objective, informed by reason and evidence. It’s frighteningly easy to get caught up in the image of being objective to the point where you no longer really are. The Left bashes creationists while ignoring or banning science which undermines it. So-called Conservatives do the same when it comes to free market ideologies and science which undermines the free trade agenda (climate change and environmental externalities, in this case). Consider being willing to admit you were wrong a worthwhile investment which builds up the resiliency of your ideas…instead of having them crash down around you because you didn’t want to be disquieted.

In this case, it’s a party which would rather destroy scientific research than force companies to take proper precautions and take account of the true cost of our economic program. A hard nose is no excuse for a soft head.

 

Originally published at my blog: http://thisroughbeast.wordpress.com/2014/01/15/keeping-the-pu/

12/6/13

To Corporations: A Letter From a Person

To my dear corporate gentle-entities,

“Corporations are people, my friend.”

Those were the words of a presidential candidate in the last election. Pundits and talking heads have debated, defended, and debunked the notions that corporations are indeed people, with all the rights and freedoms which Western democracies recognize as coming with that category. You have poured money into lobbyists and think-tanks which have ingratiated that notion into our system of law and our economic structures. Many of our governments are currently organizing the Trans-Pacific Partnership, trade agreements which are meant to protect you as you go about your business around the world.

Witnessing these events, I have to put to you the following question: what on earth has possessed you that want to be recognized as people?

Let me inform you of the plight which those of us stuck in the “people” category have to suffer.

First, as corporations you have people defending your interests. Now I know that may sound a bit crazy, what with Occupy Wall Street not being so very far away in memory and with the general image of you not being that great among the common folk. But as I think we both know that so long as the common folk keep you in business, they can think whatever they please. Time was, a respectable man did two things as far as making a living was concerned: first, he kept himself off the government dole, and second, he made damn sure that he got what he deserved and what he needed to provide for his family from his work. Ergo, going to his employer and demanding a fair wage was his duty. Today though, it seems that it’s no longer selfish just to live on government welfare. No, even wanting a fair wage from an employer or complaining when we are wronged are now symbols of the entitlement and privilege of our spoiled generation.

You, my corporate friends, have it made! One upon a time, it was widely held that you deserved the profits you had earned. If new laws or your own inadvisable decisions resulted in lost opportunities, well that was just too bad. It was your own fault for not playing the game better by adapting to the new situation. No longer! Thanks to international “free trade” agreements, you are now able to sue our States not only for infringing on profits you already made, but on nonexistent profits which you would otherwise have been able to make! Take Australia: the government there recently instituted laws regulating the packaging of cigarettes. No doubt, the brigands thought they could subject their corporate victims to the whims of “public health” and “saving medical costs”. Fortunately, bilateral trade agreements with Hong Kong allowed Phillip Morris to sue for compensation in the billions in profits that it has not yet actually made, but which will now be smaller thanks to said laws. Suing for profits before they’re made? We Millennials can only dream of such things! We’re considered entitled just for wanting adequate pay for the work we’ve already done…if we decided to sue for what we’ve yet to earn, the pundits would have a fit, followed by a media field day.

Next, let’s take a look at general social responsibilities: specifically, the duty to look after our own. When we as simple “people” make a lot of money and then spurn our families and communities in times of need, there’s a word people use for us: “assholes.” Clearly, many of you have made the decision to invest some part of your revenues in supporting community events, kids programs, medical research, and the like. Good on you. But take the simple issue of wages…the key way in which “your own” are taken care of. When you pay your employees bad wages, you aren’t assholes, you have smart business practices! Sure, some of you decide to play the game differently. Costco sucks up to its entitled employees by paying good wages and letting them rise up in the company, Walmart doesn’t. But there seems to be quite a trend, and if the unpaid internships which are increasingly essential for us millennials and the growing love offoreign workers are any clue, that trend is to use employees as replaceable agents of labour instead of following through on that rhetoric that they are “partners” or “associates”. As people, you’d be called ethically contemptible. As corporations, you earn the big bucks and get Fortune 500 standing. Congratulations on your good business sense.

Finally, let’s examine what happens when we break laws. Here, we persons are victims of three coinciding trends, one of which is long-standing and the other two of which are more recent. First, punishments for breaking the law are enforced. Second, the stated penalties for breaking many laws are becoming harsher. Third, charging someone with breaking those laws is becoming a lot easier. But you, my dear corporations, need not worry about such things…at least, not if you’re connected and wealthy enough. One of your illustrious number carried out operations which poisoned an entire town in Alabama. One might hazard a guess that that is a lot of economic damage done (although some might ask about the individual lives ruined, bleeding hearts that they are). Monsanto’s part of the payment was$390 million, or the equivalent of 390 people getting the maximum Canadian penalty for copyright infringement (clearly, a far more serious crime). When we as “persons” fail in terms of our legal obligations, no one expects government help in fixing the situation we’ve put our personal and business lives in, outside of welfare programs which we have already paid into, and which we only access at the risk of being considered “welfare bums.” Meanwhile, one of the main banks whose bad business practices contributed to the Great Recession, which by someestimates cost the economy $12.8 trillion, paid $550 million in settlements and promised to be good boys in future. There’s a word for holding corporations to anything near the same level of legal responsibility that we hold individual people: bolshevism.

My corporate companions, you’ve seen the evidence for yourselves. You would do well to abandon the battle to be seen as “people”. As corporations, you have already fought valiant struggles to win the rights and privileges which you know and love today…and which will be even better defended in future. As people, you wouldn’t just have rights. You would have responsibilities, ones beyond just your shareholders, board members, and CEO’s. Suing governments for loss of profits might be construed as “whining” and “entitlement”. Not taking care of your own would be considered a bad thing. You might even have laws enforced on you and have to pay the full price of your actions.

Think of your liberty, my friends. Don’t debase yourselves in a pointless fight to be considered people. There’s less and less in it with each passing day.

But do think of us. One day, with hard work and if fortune is with us, perhaps people can be corporations.

Sincerely,

Your faithful and devoted Associate

11/4/13

Why Economics Matters to Food

Britain, undergoing a slew of new austerity policies, has begun to see the effects of this approach on its health.

In the last 3 years, the quality of food being purchased has declined, and more junk food and foods high in sugar and saturated fats are being purchased, particularly in households with children. Almost in contradiction, the total number of calories consumed has decreased. This means that these sorts of foods are making up a larger portion of the diets of British adults and children, especially in lower income families.

Wages have fallen about 5.5%, and although prices have begun rising as the economy begins to recover, wages have remained stagnant. The British obesity rates have been attributed more to an increase in sedentary lifestyles than to caloric intake. However, this new development will certainly have an impact as these lifestyles will likely not change. Children, particularly those in single parent homes, can expect to be especially hard hit.