Union members £4,000-a-year better off, government report suggests

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This story is a couple of months old now, but I’ve just come across it. From the Telegraph:

An average trade union member earns £4,000-a-year more than non-unionised workers, many of whom have suffered wage freezes or pay cuts in the last year, a government report suggests.

This would seem a pretty clear cut case for joining a union, but the Tory MP the Telegraph found to comment on the story saw things slightly differently:

Conservative MP Alok Sharma said the potential for some employees to gain a financial advantage of others by joining a trade union was “extremely unfair”.

He said: “Employees with similar experience should be paid the same, for doing the same job, by the same employer and many will find it extremely unfair if some employees are being paid a premium just because they happen to be members of a trade union.”

He thinks it’s “extemely unfair” that workers are able to join together and negotiate collectively to secure a better deal for themselves. On the side of “hardworking people”?

Chicago Follies (X)

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Originally posted on LARS P. SYLL:


Although I never believed it when I was young and held scholars in great respect, it does seem to be the case that ideology plays a large role in economics. How else to explain Chicago’s acceptance of not only general equilibrium but a particularly simplified version of it as ‘true’ or as a good enough approximation to the truth? Or how to explain the belief that the only correct models are linear and that the von Neuman prices are those to which actual prices converge pretty smartly? This belief unites Chicago and the Classicals; both think that the ‘long-run’ is the appropriate period in which to carry out analysis. There is no empirical or theoretical proof of the correctness of this. But both camps want to make an ideological point. To my mind that is a pity since clearly it reduces the credibility of the subject and its practitioners.


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Another reason Labour don’t deserve your vote

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From The Guardian:

“In a speech intended to address Tory claims that Labour cannot be trusted with the economy, the Labour leader will stress that balancing the books will be a key element of the party’s plans for the five years after 2015.”

The article goes on to quote extracts of Miliband’s speech which contains this passage:

“You and I know we won’t have the money. For all of the cuts, for all of the pain under this government, Britain still has a deficit to deal with and a debt to pay down. That’s why our programme starts with a binding commitment to balancing the books in the next government.”

You might ‘know’ that Ed, but I and an increasing number of people know that is bullshit. There is always as much money as is needed. That’s not to say Labour should go mad, but the money will never run out. It’s stuff – people, physical resources and our ability to innovate and create new technologies – which sets the bounds of the possible, never money.

Britain has a deficit, but the things it has to ‘deal with’ are its unemployment problem, its low wage problem, its housing problem. Miliband’s focus on things that are irrelevant, but which undermine attempts to deal with things are relevant, doesn’t inspire a lot of confidence in what a Labour Government under his leadership could achieve.

The Tories deserve to lose next year and the Lib Dems deserve to be wiped out, it’s just that Labour don’t deserve to win. Expect low turnout records to be broken again next May!

Rising employment figures hide some worrying trends

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The employment figures came out yesterday which showed the employment rate rising to pre-recession heights and unemployment falling to 2.12 million. At the same time though, the figures showed that wage growth continues to be outstripped by inflation, while productivity continues to fall. Rising employment = good; falling real wages and productivity = bad, so what’s going on?

Some of this puzzle appears to be explained by some recent labour market trends, namely the rapid rise in self-employment. There’s a very interesting post up at Piera today by FlipChart Rick. It contains some nice charts which I will repost here.

The first chart shows the changes in employment since the 2008 crash, split between employees and self-employed. The Coalition likes to shout about the increase in jobs since they came to power, but since 2008, the rise in employment is almost entirely accounted for by the growth in self-employment. As Rick says in his Piera post:

“Take out self employment and the figures would be rubbish. The government wouldn’t have had much to boast about until the back end of last year.”


Source: ONS Trends in Self-Employment

The next chart shows the mean and median weekly earnings for employees and self-employed workers. Both median and mean weekly wages for employees have barely moved since 2001 (in real terms), which is pretty dire, but when compared the the weekly wages of self-employed workers, it looks pretty rosy:

Screen Shot 2014-07-10 at 162927

This third chart comes from the ONS rather than Rick’s blog and shows whether those who are self-employed employ other people or not. It shows that while the number of “one-man bands” has risen by around 750,000 since 2007 (with most of the increase happening since 2010), the number of self-employed people with their own employees has actually fallen. It’s been argued that rising self-employment is a good thing because it demonstrates a increase in entrepreneurship and “wealth creators”, but this chart shows there is little evidence of that:

As Rick says in the post linked to above:

“More self-employed people, not much extra work, so falling productivity, under-employment and collapsing pay.”


The best #IDS #reshuffle Tweets

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Despite rumours last week (repeated here) that Iain Duncan Smith was to be moved in David Cameron’s reshuffle, he seems to have clung on. Many on Twitter reacted with disbelief. Here are some of the best Tweets I found on the subject:


Internet billionaire says “The pitchforks are coming…for us plutocrats”

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A couple of weeks ago, Politico Magazine published an article by billionaire Nick Hanauer, who – amongst other things – was one of the founders of Amazon. In it he argues that inequality has risen to such an extent that he thinks serious social unrest is inevitable unless something is done to address it. He is advancing ideas he has coined as “middle-out” economics as a rebuttal to the “trickle-down” variety. His approach is more pragmatic than ideological I think, a kind of self-preservation strategy for the top 0.1% if you like, but there’s little doubt what he is proposing would improve things for the great majority of people (while keeping the economic system fundamentally in tact). He argues the fundamental law of capitalism must be:

“If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.”

Hanauer’s key proposals in the article is for a $15 an hour minimum wage in the States (the Federal Minimum Wage is currently $7.25, which is about £4.20 an hour). Hanauer says the following about the minimum wage:

“The standard response in the minimum-wage debate, made by Republicans and their business backers and plenty of Democrats as well, is that raising the minimum wage costs jobs. Businesses will have to lay off workers. This argument reflects the orthodox economics that most people had in college. If you took Econ 101, then you literally were taught that if wages go up, employment must go down. The law of supply and demand and all that. That’s why you’ve got John Boehner and other Republicans in Congress insisting that if you price employment higher, you get less of it. Really?

Because here’s an odd thing. During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo. CEOs used to earn 30 times the median wage; now they rake in 500 times. Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before. So, too, for financial services workers and technology workers. These folks earn multiples of the median wage, yet we somehow have more and more of them.

The thing about us businesspeople is that we love our customers rich and our employees poor. So for as long as there has been capitalism, capitalists have said the same thing about any effort to raise wages. We’ve had 75 years of complaints from big business—when the minimum wage was instituted, when women had to be paid equitable amounts, when child labor laws were created. Every time the capitalists said exactly the same thing in the same way: We’re all going to go bankrupt. I’ll have to close. I’ll have to lay everyone off. It hasn’t happened. In fact, the data show that when workers are better treated, business gets better. The naysayers are just wrong.

Is this issue more complicated than I’m making out? Of course. Are there many factors at play determining the dynamics of employment? Yup. But please, please stop insisting that if we pay low-wage workers more, unemployment will skyrocket and it will destroy the economy. It’s utter nonsense. The most insidious thing about trickle-down economics isn’t believing that if the rich get richer, it’s good for the economy. It’s believing that if the poor get richer, it’s bad for the economy.”

UK politicians have made noises recently about raising the minimum wage, but all seem convinced it will cause unemployment. Hanauer demonstrates why it needn’t. The whole article is worth reading, and here’s a TED talk Hanauer did a couple of years ago that I’ve posted here before:


Another Government ‘Fag packet’ proposal for Benefit Sanctions & Cuts ?

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Originally posted on jaynelinney:

Rarely do I come across a Tory Policy proposal that makes me both Smile (albeit at the irony) and Shudder (with fear); but today’s report in the Telegraph does exactly this; “Hundreds of thousands of benefit claimants face being stripped of their state allowances if they refuse to undergo treatment for anxiety and depression“, this worries me on several levels.

The article quotes their source as saying “We know that depression and anxiety are treatable conditions. Cognitive behavioural therapies work and they get people stable again but you can’t mandate people to take that treatment“; I totally agree with the closing proviso but the apparent claim CBT works for depression and anxiety is False.

Firstly Depression is not a ‘one size fits all’ disorder, there are different types of this debilitating illness, and a notion it can be conveniently summed up to enforce potentially damaging treatment is downright…

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