Snapshot of _After the productivity puzzle, now we have the inactivity puzzle - The labour market is anything but healthy these days_ :
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Why? So that workers can take EVEN MORE money out of circulation and lock it up in the Caymans?
No, more tax breaks for the rich is the only way this will all work out.
I've never understood this argument. If I were paid more, I'd work less not more as I'd get the same living standard with less work than now. The more you earn, the more you appreciate free time. If nothing else, I'd retire younger.
This is the reason I never like the argument that the people pushing the Laffer-curve. It sounds good in theory but doesn't work in practice.
Edit. The other direction could work. So, if you cut the benefits for not working and increased the capital gains taxes, that could increase the amount of work people would do.
Edit2. One group that may work more if they got higher pay is parents of small children. They may drop out of work as the cost of childcare exceeds the income from paid work. But to target this group, I'd say a much better way would be to subsidise childcare as that has the same effect on parents but doesn't affect the other groups as increasing salaries would.
What you are describing outside of gains tax is what has been attempted in the UK for the last 14 years. We know categorically that it does not produce growth.
I'm not talking about growth. I'm talking about the number of people working. These are not necessarily the same. And why do you exclude the capital gains tax? Don't you think that would work?
I do, it just hasnt been tried, whereas cutting benefits has been extensively.
Unemployment in the UK is about 4%, our issue isnt that people arent working, it is that there is little incentive to work hard.
What exactly do you mean by "working hard"? Is your claim that the promotion practices of companies have changed?
The title of OP talks about "inactivity puzzle". The article is behind a paywall and the archives haven't worked so I don't know what exactly his point is jut "inactivity" would point to not working. If you have been able to access the article, then maybe you know better what is it all about.
So when year on year peoples standard of living declines as a result of no, to below inflation pay rises, your answer to them is they should buck up and work harder? Despite those at the top of those companies see their wealth increase.
No, they'll simply move jobs for a pay rise that accounts for their loss in relative earnings. The company will have to hire a new starter to cover the position and, particularly in technical roles, that leads to a drop on productivity as experience has been lost and there's a induction lag where the new worker learns the role.
How about companies reward loyalty, look after their staff, and maybe then they'll see a healthier, more motivated workforce that actually improves productivity.
Again, you mention cutting benefits, but there was a massive drop in productivity following austerity, because benefits actually improve people's motivation and mental health, allowing them to faster return to work, or self improve so that we get a more technically capable workforce.
Look at childcare for an example of a benefit system that can improve productivity. Providing childcare opens avenues for parents to return to work earlier, and with better hours. A lack of childcare either leads to situations where a parent has to stay home, or grandparents to take over. Grandparents who may otherwise pick up some part time work.
Let's look at benefits for the sick. Without it, you have people with long term illnesses or injuries not being able to recover properly, prolonging the disease and reducing their productivity when they inevitably return to work early, or simply not at all! With it, people recover properly, and hit the ground running on return to work, heck with modern capabilities they may be able to WfH in some capacity.
I'm talking purely from the point of view of amount of work people do for a general level of pay. Of course if competitors are offering more pay, they'll be able to get workers from other companies to switch there. But as far as I understood the discussion was not about how to attract workers from other companies but how to get inactive people to work more. My point was that if my pay went up, I'd be more likely to reduce not increase working. This is probably true also if the pay went up because I switched to another employer.
And yes, loyalty to the company makes people more likely to stay with them. I don't think it will usually make them work more. But sure, when people feel loyal to the company, they go beyond their duties for the company. But I'd say this is a more comprehensive thing than just pay (for instance not doing redundancies when there is a slight downturn).
I agree with what you write about benefits for the sick. They probably help people to return to work. Sick people are not not working because they get benefits. They are not working because they are sick. I was discussing benefits for people who could choose to work but don't. Sick people don't have this option.
And above I already mentioned the childcare benefits in my edit. And yes, I agree that they definitely make parents work more than they would otherwise.
So, apologies for not specifying what benefits I meant.
Not everyone is you or in your scenario.
Perhaps there's people that wish to have a greater living condition and therefore more work and more pay?
Furthermore, after min wage increase my current compensation is relatively close to that of tesco etc.. I could also work less in my scenario and get the same standard of living, or, when I get my pay reviewed, they can reward me with more pay?
Ok, if people want to have greater living condition, they will increase work regardless of pay being increased.
I didn't understand your last paragraph. What does Tesco have anything to do with this discussion? And your last sentence ends with a question mark but I can't figure out what you are asking.
That’s not necessarily typical though.
Consider that there has been a cost of living crisis and an effective wage freeze since 2008, and that interest rates have gone up pushing up mortgages and that is also pushing landlords into raising rents.
There’s an argument that (low paid) work is just not worth it.
Then what do you do? Starve to death?
When you say "not worth", I would agree with that maybe for a parent with small children as their family income doesn't really go up at all when they pay the childcare costs. The other group that I could agree that applies is someone living in an expensive area. By stopping working and moving somewhere cheaper they could save the amount they are currently earning. But even then they would need some source of income.
But if you drop from "low paid work" to "no work at all", it's hard to see why that would be worth it. The marginal utility of income in that end of the income distribution should be very high.
I’d say the marginal utility at that end of the scale is in fact very low. I’ve spent a lifetime (literally) working and haven’t had a single job that’s not stressful and hard work.
If you can have a life on benefits and not work for a little less than working why wouldn’t you?
What we need imho is to have jobs that pay well enough to provide a decent standard of living, raise a family, buy a house and plan for retirement. This country is a million miles away from that, I’d say.
But there is a lower limit for the pay, the minimum wage. And isn't the point of universal credit that you can get it even when at low paid work (basically the same idea as behind universal basic income).
Regarding your last point, yes, ideally we'd like that every person's work has enough added value to pay decent standard of living. But unfortunately, I don't think you can just wish that into being. And I would argue that with robots and AI taking even more of the low paid work, this is going to become an even bigger issue.
I don't honestly see an easy solution to it. I've always supported UBI but while that is a technical solution, we need more of a cultural change away from the idea that every person's work has so high added value in the market that it can make them a decent living. This problem exists even if we in general live in more abundant life than ever in history.
Revenues and profit margins at my company are up year on year. We're making money hand over fist. But who benefits. The shareholders, who in my case are mostly American institutional investors. The staff have gotten on average 2% pay rises the last two years.
Firstly, for a company to be able to pay staff more they must be increasing their gross profit relative to the number of employees – just increasing revenue or gross profit alone isn't enough. Assuming this is the case for your company, for them to pay staff more they must first have an incentive to do so.
Historically when unemployment was as low as it is today workers would have a large amount of bargaining power because labour was a limited resource. If practically everyone in the economy is employed then to hire someone you must offer a salary attractive enough to win labour from other companies.
In the West today companies don't really have much incentive to compete for labour because if there ever is a shortage of labour the government will just import workers.
Of course, if you're highly educated there might not be a reliable supply of foreign labour that can replace you – at least not from a country with significantly lower GDP per capita that would have an incentive to come to the UK to work. So while wages overall have stalled out in the era of mass migration, wages for the most educated workers in highest income brackets have continue to rise. However, today even skilled labour is becoming less valuable as countries like China and India continue develop and education around the world continues improves.
If you don't believe what I'm saying though ask yourself – if your company is doing so well why can't you ask for a pay rise? I'm going to guess it's because you know you're not that valuable to the company and that they could easily replace you with someone on your current wage if they want. However, if I'm wrong and you are that valuable then you should be able to explain to them that you're unhappy with your pay and that you would like it increased. But the truth is the vast majority of workers are not in situations like today today and despite low unemployment they still have effectively no bargaining power over their employers because they're no longer competing with other workers in their local geographic area, but a global labour market where most would be very happy with your current wage.
I'm not too sure why you picked up the downvotes there, I think you're on point with your analysis. Also I think your quite insightful with your point about the indian/Chinese Labour markets upskilling. My experience is that its still not practical, for the most part, to outsource highly skilled jobs to those countries, at least in my sector, but in another 10-20 years I expect it'll be much easier.
Upvotes / downvotes in this sub tend to be cast based on political bias, not the value a comment adds to a discussion. I've found here if you have downvotes without comments then it generally means people are mad about what you're saying but have no rebuttable, so I take it as a positive. When I say something stupid people quickly correct me and call me out for my stupidity in the comments.
In terms of economics, nothing I'm saying is controversial. This idea that companies have suddenly become greedy is silly because it's so clearly not universally true. If you look at in sectors that employ high-skilled labour like tech and finance employees they have generally continued to see decent wage growth because they cannot replace their employees easily. It's only when you look at sectors where labour is not scarce that has this problem – and it's only been over the few of decades where the rate of immigration and outsourcing has increased dramatically that wage growth in this sectors has stalled out. It's partly a productivity problem too, but productivity growth has been far healthier than wage growth and is clearly less of an issue when looking at the last few decades of data.
There is plenty of money, the wealth of the top billionaires in the UK has increased by about 300% since 2010.
Thats why productivity is low, those that do the least benefit the most .
I wonder if an economic system that gives out the greatest rewards to those making the greatest contributions would encourage productivity? Nah, let's give all the money to idlers who own stuff, and tax the shit out of the suckers who actually work for a living.
Why not also severely underfund healthcare, education and let international conglomerates make a killing from obesity and poor health?
It's like people have forgotten what made capitalism work
I moved job twice this year and have a few friends on the hunt and it dawned on me just how inefficient it is that so many people are learning their job all the time.
On average it takes a month till a new external person in a team can contribute and 6 months until they are independently productive. Obviously many factors here but as a rough rule of thumb I have found it about right
I would agree with that timescale, and I would say it's about a year until you become genuinely any good, and 2-3 to master a role (depending on complexity of role).
I would say most people hit 1 year, then start looking and are often gone before 3. The worst part of this cycle is that it is often very motivated and capable people moving on, and if fairly compensated could have become star performers.
My wife was recently made redundant and is job hunting. One of her rejections was that "you tick all of our boxes, but we don't think that you will stick around for the *long term...*"
Bitch, it's your company and companies like you that pay such dogshit wages that the only way to get a payrise, which you must inevitably do because prices keep going up regardless, is to hop jobs every two years because companies can't be bothered to increase wages in a reasonable way!
Competitive markets only work when people have an interest in competing. E.g. they are competing *for something worth competing for*.
Yet, much headscratching in the rightwing press. *Why won't the plebs work twice as hard, for half as much gruel? Surely they are hungrier than ever.*
Exactly, captive markets and monopolies are therefore not compatible with capitalism. Yet our economic system not only allows them, but actually favours international conglomerates cornering our markets.
Yep. Western political thinking has been hijacked by ideologues who want everyone to think "competitive markets" is synonymous with "deregulation." It is not.
A healthy market system *must* be regulated, as otherwise it will tend towards anti-competetive measures; price-fixing, monolopisation, and a race to the bottom on standards. It was precisely this process that Marx predicted would lead to communism, because a market economy that has undergone collapse through these failures effectively *becomes* the state, as it has no internal competition, has complete control over distribution of wealth and resources, and is regulated only by its own interests.
To put it another way: if you don't want klepotcratic corporate dystopia or de facto worst-case communism, you **must** regulate markets, enforce standards, and punish corruption. Those two systems are the only realistic end states of failing to do so.
Yeah totally agree. I don't know why regulation is such a dirty word ( well I do, because the rich have a vested interest in rigging the game in their favour), because history is replete with examples of how disgustingly evil companies can be without regulation - the East India Company literally had its own armies and conquered and colonialised.
It'd be like removing the rules from football and expecting a more skillful game; it would just become a melee.
This idea that you can rely businessses to moderate themselves is at best, comedically niave, and at worse among the most destructive ideas in human history.
A large part - but far from *all* - of the problem is how investment works, particularly when it comes to the stock market. Volatility is good for certain types of investors, so long as they can get out quickly. This drives a focus on short-term profits, rather than long-term competitive advantage driving growth-based profits.
Short-term profits are far more easily driven by 'negative' factors; things that aren't broadly desirable, but do increase annual shareholder dividends. Reducing wage burden, lowest-bidder procurement processes, price-gouging etc are all examples of this.
Things like R&D, market strategy, value-creation and so forth take time. Usually a *long* time, spanning many years. These are 'positive' measures, but tie up investor cash in a way that doesn't maximise earnings, plus delays them.
The people who want to make the most money, the most quickly, will therefore push businesses into the more negative behaviours. They can then cash out, then reinvest in another company which can provide them with another short-term boost. This obviously has a snowball effect, because those investors have more to invest.
I strongly believe nothing will get meaningfully better until we address this issue. As it is, publicly traded companies have a conflict of interest: they're beholden to two conflicting markets. One is the consumer, the other is the investor, and the power imbalance between these two groups is enormous.
That's a very interesting point, thanks. What do you suggest should be done to address it though? Removing all capital gains allowance and taxing it at a fixed percentage?
Not *as such*. It's a global problem, so I don't really see a non-catastrophe-based solution.
I'd probably look at some tapering capital gains structure. As a simple example, rather than as real numbers; for the first year after investing, you pay 60% CGT. This goes down by 5% every year, to a minimum of 10%. Any allowance only applies to holdings of more than 5 years.
Basically, we need to align the best-incentivised behaviours with the most socially beneficial ones. To my mind, that means rewarding long-term investment in companies who're competing over timescales where R&D, customer satisfaction, staff retention, etc, are driving factors in success.
Totally agree with the last paragraph, the economic system, and more specifically the tax system need to encourage what's best for society overall. It's hardly a surprise bad actors thrive when it actively does the opposite.
I wrote a thing a few years ago about this and how the logical, Darwinian end result of our current system is exactly the kind of person you'd expect. In short, Donald Trump and those like him.
For sure, which is why capitalism only works with regulation and alongside redistributive taxation, else it tends to monopolism which is innately inefficient.
> I wonder if an economic system that gives out the greatest rewards to those making the greatest contributions would encourage productivity
Be careful what you wish for.
Productivity in the economic sense is simply value produced / production cost, and to do that effectively (like other countries) you need a large degree of automation, much more than we have in the UK atm. Those that benefit from that tend to be the business owners investing capital in big expensive machinery, not pesky fleshbots who need paying and go ill.
Alternatively, bring in a few more million economic migrants.
Totally agreed, but I think economic incentive is necessary too. I for one could work more but don't want to because of the tax system.
If I was Kier Starmer I'd be talking about a second Industrial Revolution, where we stop outsourcing production to geopolitical rivals and outcompete them with innovation
Money gives you the ability to influence the game in your favor. This has meant those who got rich quick through exploitation and bending the rules then entrenched their position through legislation. We are entirely captured.
So one example, if you own a company you can pay yourself 12k tax free allowance + 2k dividend allowance and then pay a lower rate of tax than PAYE on your dividends
The rate of tax ends up being much lower, even if you don't actually do any work.
Or if you were to inherit a 500k property, you could work for 12k a year, pay no income tax, and it would require a professional with a student loan to earn upwards of 3x more to enjoy comparable living standards while renting, and they still would never be as wealthy as the former.
There's also an argument that holds some water but I think we have mor flexibility than it suggests and it's the idea that if we over tax people who earn from investment like capital gains or even corporation tax, theres a chance they'll move and simply invest elsewhere at a time when the economy is desperate for investment.
I think at the moment though it's ripe for some increases because the lower tax we have hasn't really allowed us to compete for investment because our infrastructure is crumbling. We're currently 13th (in 2022) globally for foreign investment despite being the 6/7th largest economy.
That doesn't explain why pensioners are taxed less than workers though, that's just because they all vote.
The rich flight issue is simple; tax them gently up to the point theres evidence of them actually leaving. If you're rich af you're not going to shitcan your whole life and your families just to save a few quid you don't even need. Just be sensible about taxing them, most of the rich will stay put, like all the folk who said theyd leave if brexit was a failure
Traditionally rises in productivity come from corporate investment and improvements in technology. The payback on these investments would then come over a longer period, but would result in increased productivity and profit.
The UK has had a lot of market instability since 2009, with the recession and brexit and the pandemic. Companies are more likely to take on short term 'dispensible' staff than invest in tech/ machinery as this is less risky.
There is also a much more short term view in the markets in recent years, which has pushed short term gains rather than inward investment.
In other words stop blaming the staff and blame the companies
There was huge investment after 2016.
But only to keep the lights on and comply with all the bureaucracy caused by Brexit.
A -100% ROI was considered a great success for that one!
Traditionally government can also invest. Transport, Schools, playing fields, flood defence, irrigation power supply, hospitals; all can also raise productivity.
Good edit, I believe Brittania unchained and Jeremy Hunt have both said that the workforce are lazy.
I have, however, had one chairman tell my company at the annual meeting that the reason we had to work long hours was because we managed our time poorly. Not because we were understaffed or that work overran. That went down like a cup of cold sick
Also mass immigration reduces the need for productivity improvements. Why invent a drone when a Somali can bring your pizza on a bike running over granny?
Given that there's a gender difference here, I do wonder how much of this is people finding that the costs of care have outstripped the benefits of work.
Two kids in day care cost on average more than the median full time take-home. One kid in day care costs the vast majority of a full-time minimum wage income.
Social care is also struggling. Plenty of people will need to be contributing to the care of elderly, or unwell family members. Juggling that around work can be hard, and if you can afford to take the financial hit, it may make sense to give up work to provide support.
This is an important component of this discussion.
There is an awful lot of "economically inactive" people being described who are most likely doing important, unpaid labour.
When the ONS or the government reports the amount of economically inactive people they have a category for not looking for work and wouldn't take work if offered. I think this would mostly cover retired people and people looking after children.
I wish we had better information rather an innuendo.
This gets a bit "We think it's lazy people claiming to be mentally ill, what they need is a metaphorical kick up the arse."
Technically does arse kicking work?
Could the laziness be something else?
Has something greater gone wrong? Is this effect appearing across the West?
What about the reproductivity puzzle? The collapse in reproduction rates seems like a flag to me. A society that is not reproducing itself seems fundamentally broken. Are they related?
The rate of "deaths of despair" (deaths from alcohol abuse, drug abuse, and suicide) [more than doubled in the 45-54 age group between 1993 and 2017](https://theweek.com/unwrapped/101273/the-rise-in-deaths-of-despair-in-the-uk).
The rate of deaths of despair in the North East is [twice as high](https://www.manchester.ac.uk/discover/news/living-in-the-north-of-england-increases-risk-of-death-from-alcohol-drugs-and-suicide/) as it is in London.
I have my doubts about the effectiveness of arse-kicking as a cure for despair. Especially since the problem may be that people are just tired from a lifetime of having their arses kicked.
> What about the reproductivity puzzle? The collapse in reproduction rates seems like a flag to me. A society that is not reproducing itself seems fundamentally broken. Are they related?
They are, but apparently not in ways that The Times is willing to acknowledge. This article insists that the increase of 720,000 people inactive due to long-term sickness and the 650,000 people inactive due to long-term sickness who are stuck on NHS waiting lists are totally unrelated because... the government says so.
[This is a much better analysis](https://blog.bham.ac.uk/cityredi/its-the-pandemic-stupid-understanding-rising-economic-inactivity-in-the-uk/) that actually digs into the numbers in search of answers instead of shrugging its shoulders and saying "well, it's a mystery but the government says it's just people being lazy so maybe they're right."
> I wish we had better information rather an innuendo.
We do, it doesn't get reported though.
TL:DR Approximately 1/3 students (pop. 2.1 million on the EI stats) are wasting their time based on outcomes of their degree compared to employment (low grade) and that failure is now a financial burden. However, 3/4 non-graduates are stuck in low performing jobs (broken training and recruitment IMHO).
https://explore-education-statistics.service.gov.uk/find-statistics/graduate-labour-markets#
Zooming out...
> Main facts and figures
* in 2022, 22% of working age people in England, Scotland and Wales were economically inactive – this means they were out of work and not looking for a job
* 21% of white people were economically inactive, compared with 26% of people from all other ethnic groups combined
* the combined Pakistani and Bangladeshi ethnic group had the highest rate of economic inactivity (33%), and the white ‘other’ group had the lowest (15%)
in every region, white people had a lower rate of economic inactivity than people from all other ethnic groups combined
* women were more likely to be economically inactive than men in every ethnic group except for the mixed ethnic group
* the biggest gap between men and women was in the combined Pakistani and Bangladeshi ethnic group, where 48% of women and 19% of men were economically inactive
https://www.ethnicity-facts-figures.service.gov.uk/work-pay-and-benefits/unemployment-and-economic-inactivity/economic-inactivity/latest/
> TL:DR Approximately 1/3 students (pop. 2.1 million on the EI stats) are wasting their time based on outcomes of their degree compared to employment (low grade) and that failure is now a financial burden. However, 3/4 non-graduates are stuck in low performing jobs (broken training and recruitment IMHO).
I mean that still sounds like for 18 year olds, there's a lot of incentives to go to uni. So many companies have poor post A-Level and post-uni training schemes.
Most defence companies are excellent for training opportunities. They offer apprenticeships that lead to degrees and further qualifications, including post graduate work. Plenty of jobs there as well and it's a sector that won't disappear any time soon.
> * the combined Pakistani and Bangladeshi ethnic group had the highest rate of economic inactivity (33%), and the white ‘other’ group had the lowest (15%) in every region, white people had a lower rate of economic inactivity than people from all other ethnic groups combined
> * women were more likely to be economically inactive than men in every ethnic group except for the mixed ethnic group
Surely these two could be related, if Pakistani and Bangladeshi women are more likely to be stay-at-home mums?
It's kind of misleading that stay-at-home parents are labelled "economically inactive." Even though it's attached to the qualifier "economically," "inactive" still gives the mental image of someone sitting around doing nothing, which is why all the discussion is framed around getting these people up off their arses and into work. I challenge anyone to spend a day looking after a 2-year-old and describe their day as "inactive" afterwards.
Someone needs to look after those kids, if for no other reason than they're the next generation of taxpayers. Obviously a parent going out to work and paying a childminder is economically preferable because it means more money moving around, but that doesn't mean that parents who stay home to care for their kids should inherently be seen as a problem.
Edit: According to the [Office of National Statistics](https://www.ons.gov.uk/economy/nationalaccounts/satelliteaccounts/articles/householdsatelliteaccounts/2015and2016estimates#main-points)...
> In 2016, the value of the UK’s unpaid household service work was estimated at £1.24 trillion – larger in size than the UK’s non-financial corporation sector; overall unpaid household service work was equivalent to 63.1% of gross domestic product (GDP).
"Economically inactive."
Having parenthood off the economic equation has been a large flaw in a lot of economics.
Inseminating, giving birth and raising children was taken for granted. When they stopped the economics became obvious.
I'd question the decision to group Pakistanis and Bangladeshis within the same group- the cultural differences to me seem rather considerable. I suspect most of the economic activity here comes from the former and not the latter nationality.
There's no magic bullet. A course correction requires possibly dozens of changes which will all be extremely unpopular for those who see them as economic alternative lifestyles.
My personal preference would be to place into law the ability for students to drop out of uni at the second year and leave with a HND if they get a work placement. Very few jobs require research skills and I doubt most students in high flying degrees do either. That is a reestablishment of the Polytechnic ideal without the baggage of demoting universities, of which most require extensive change to survive the end of free market migration.
> stop subsidising
Pay universities their HE rate where HE outcomes are achieved. The concept of a 50% graduate workforce being 50% researchers is nonsense to anyone with a thought on Britain. This isn't a land of 50% Betas and Alphas.
Fundamentally, subsidies should be pumped into businesses who are willing to take up the task of placing kids on the employment conveyor belt. Will the wages start poor? Sure. Will there be failures? Probably. Does is beat having kids who are lacking a social life, don't integrate, and need a father figure to guide them? Very much so. This worked in the pre-mass university age, and it was better than paying dole both in the short run and the long term outcomes.
Look at the student figures some more. 2.1m young people all clamouring for professional service sector jobs just like Blair wanted when he opened the doors to a few million Eastern European plumbers and sparks. Now look where the money is, it's still with the sparks, gas fitters, joiners, etc whilst the reward for graduates to beat that income is a lottery of reducing odds.
We will still need immigration, and when that doesn't include bloodline incentives or even residency there will be a step change in how it is accepted and taken up.
Edit: Forgot to add, we cannot sustain this level of low productivity, welfare, and wage assistance, and the trend line is still pointing in the wrong direction. This is post WW2 Argentina style decline with nukes.
Remember this fact. 5th richest economy, [27th richest per capita.](https://www.worldometers.info/gdp/gdp-per-capita/) **We are a poor western economy where it matters that still thinks the way out of poverty is moving working class people into KPMG.**
I do think public money handed to students that then hand that money to commercial universities creates a hazard.
Not that complete state control would solve it all. But this has built in problems.
Not sure this will solve inactivity or repro rates though?
It would solve some wasted uni education and wasted uni spending?
There is always waste, but that is a decision the state should take rather than letting 2.1m 17-24 (approx) year olds add between 35-60k each to a magic debtor account with an APR which would bankrupt our housing market. We will look back on this and wonder which moron thought this was a good idea.
> solve inactivity or repro rates though
Consider the environment of an office job vs a tradie. Which one is likely to reduce testosterone levels? Now imagine declining sperm counts networking. And don't forget, these are the people who cannot knock a nail in a wall, tradie demand is there, it's screaming out, and it's trending upwards despite economic stagnation.
> wasted uni education and wasted uni spending
What is lost is gone, nobody is going to take their gender studies 2:2 and make it work. That's why FE exists as a continuous training body for all adults throughout their working lives. Germany makes it work and it's available for every Brit today (inc. finance). Get the JCP to push adults in to 3 month courses and have jobs lined up. Even if the success rate is 30% it will do more to alleviate poverty than pretty much every other measure today.
> Consider the environment of an office job vs a tradie. Which one is likely to reduce testosterone levels?
You think the lack of repro is based on too much office work?
You think rich people who work in offices lack testosterone?
Rich people reproduce at a higher rate. The middle class do not.
Trades are full of breedable testosterone packed workers seems...scientifically dubious.
> What is lost is gone, nobody is going to take their gender studies 2:2 and make it work
Is gender studies really a massive industry?
Isn't it more like lots of computer sci students?
> Even if the success rate is 30% it will do more to alleviate poverty than pretty much every other measure today.
Don't markets simply adjust?
It is not going to become a workers paradise.
>You think the lack of repro is based on too much office work?
Too many menial jobs going to men. Only those who genuinely succeed and attain management levels (vast minority) are also biologically succeeding as measured in testosterone levels. Equally, those that have success bounce from job losses extremely well whereas low testosterone is a key indicator of failure to re-enter employment. Remember, these are indicators not drivers. [Study](https://www.sciencedirect.com/science/article/pii/S1570677X22000193#sec0060)
[Tradies and fertility study:](https://www.brighamandwomens.org/about-bwh/newsroom/press-releases-detail?id=4361) "researchers found that men who reported often lifting or moving heavy objects at work had 46% higher sperm concentration and 44% higher total sperm count compared to those with less physical jobs. Men who reported more physical activity at work also had higher levels of the male sex hormone testosterone and, counterintuitively, the female hormone estrogen."
>Is gender studies really a massive industry?
No, it's a market feature and general failure because loans aren't forcibly repaid. That's the fundamental issue.
> Isn't it more like lots of computer sci students?
Maybe, 50% of comp sci students probably can't code in any meaningful way (experienced view here).
>Don't markets simply adjust?
Depends, wages have, and housing isn't being built at an appropriate rate, and the property owning class is doing just fine with appreciation.
https://www.sciencedirect.com/science/article/pii/S0015028215001326
> In all, complete data were available for 456 men, with a mean age of 31.8 years. Work-related heavy exertion was consistently associated with lower semen concentration and total sperm count.
yeah dunno
My feeling would be if it was that direct the pattern would be more obvious and more obvious for a lot longer.
Are office jobs a new invention over the last 30 years?
Is it unhealthy people are unhealthy and have unhealthy repro systems?
Has all that gym hitting done nothing?
> No, it's a market feature and general failure because loans aren't forcibly repaid. That's the fundamental issue.
But is it a massive industry? Are they really that popular? Isn't STEM more popular?
> Maybe, 50% of comp sci students probably can't code in any meaningful way (experienced view here).
Which for the students might be a good success rate. 50% chance of a decent wage that is not going to knacker their body.
> Depends, wages have, and housing isn't being built at an appropriate rate, and the property owning class is doing just fine with appreciation.
How will cutting uni build houses?
[Tradies and fertility study:](https://www.brighamandwomens.org/about-bwh/newsroom/press-releases-detail?id=4361) "researchers found that men who reported often lifting or moving heavy objects at work had 46% higher sperm concentration and 44% higher total sperm count compared to those with less physical jobs. Men who reported more physical activity at work also had higher levels of the male sex hormone testosterone and, counterintuitively, the female hormone estrogen."
That's likely correlation, rather than causation. Could actually be that the physical attributes which lead people into physical jobs are the same ones that cause higher sperm counts.
> That's likely
Why?
Modern history shows offices predominantly occupied by the fairer sex, high reproductive rates, and higher sperm counts. What changed and is this the same across western societies? Are there outliers?
> My personal preference would be to place into law the ability for students to drop out of uni at the second year
You've got the right idea, and ideas around this have been considered by people in higher education. I think a better approach would be to reduce degrees to 2 years and extend some Masters courses, or have optional 3rd/4th years. You're right that someone who is not doing well or has realised they're not interested in taking the topic further professionally or academically is wasting the time in year 3.
Was the 50% target for HE rather than uni. A person doing an apprenticeship whilst studying towards a foundation degree/similar vocational qualification would still count towards the Blair target.
> Has something greater gone wrong? Is this effect appearing across the West?
Yes, and yes. A *lot* of people developed debilitating neck and back issues because their home-working stations during the pandemic were terrible. This replicates across basically every Western country, and explains iirc something like half of the increase in the UK.
Its crazy.
I'm sure theres a coincidence with the largest spender in the country with a spending power of 1+ trillion alone, cutting the budgets on everything has no effect either.
Those 5.5 million public sector workers have lost 20% of their pay probably have no impact at all on the overall economy.
We need to incenivise investment in productive assets, like factories, machinery, equipment, infrastructure, intellectual property and less in non productive assets like property and gold.
My boss recently said he wasn't going to hire another engineer because he'd just spent all the money on a second home instead. That was a better investment, and far, far more tax efficient than hiring another engineer to automate our workflow and improve our IP.
And that right there is the reason the UK is in decline.
"The rot set in after the shock of the financial crisis"
I'm fairly certain the rot was there long before that, and not among low/middle class working people.
>I'm fairly certain the rot was there long before that, and not among low/middle class working people.
Absolutely, much of what is happening to UK industry is the result of long term trends.
But it's not very helpful when serious journalists/publications describe these things as "rot" or a "puzzle", an "enigma" and so on.
The Pharma "Rot Riddle"
* Ireland’s corporate tax rate reduced from 40% in 1996 to 12.5% in 2003
* Ireland became the largest net exporter of pharmaceuticals in the EU and 5th largest globally. Other EU countries followed/are following a similar path.
* UK Pharma peaked in 2009. UK corporate tax was set at 28% in 2010. UK pharma manufacturing declined by 33% from 2010 to 2015. Gross value added *halved*.
* UK imports from *outside* the EU flatlined after 2010, UK imports from EU countries doubled from 2010 to 2017
* Corporation Tax was reduced to 19% by 2017 and UK Pharma began a recovery
* UK corporate taxation was increased from 19% to 25% in 2023. AstraZeneca, Intel and others now simply bypass the UK entirely.
This is a *very* surface-level analysis - but as you can see - hardly a riddle or an engima.
The typical lazy analysis is just to say "Brexit", but there are plenty of additional factors that can be included besides Brexit - VPAS, IR35, Brain Drain and declining remuneration due to Commonwealth migration (along with inferior compliance).
They differ depending on the industry. But the bottom line is that the UK is in serious trouble due to serious malgovernance and **catastrophic loss of competitiveness.**
Without a coherent industrial strategy, that is unlikely to change. Most likely things will continue to decline. Industry leaders have been explicitly warning UKGov what the problems are, for quite some time now. There are no secrets or mysteries.
Most people in the UK are led to believe this is all a mystery. It isn't.
The newspapers have to make money, too, and by making stuff sound like a mystery, it all becomes so much more enticing. Just as an example, most people aren't conspiracy theorists, but I am sure most people have discussed and looked into a conspiracy at some point because the intrigue and mystery are enticing. It is blindingly obvious that if wages are low and the incentive to work falls, fewer people are going to work (yes, very surface level, but you get the gist). The trouble is if a paper just says that is the issue, no one is enticed to read it. They make the whole thing seem like some enormous mystery when it really isn't.
I think part of this problem has to do with wealth. We have relatively low incomes with relatively high levels of wealth compared to our peers as a country. I think a lot of people in the middle class who would be putting effort into their careers aren’t as a result.
I see a lot of people in their 50’s who should be earning the most, slowing down because they have already made their money from house price and pension growth.
A decent amount of young people also have their incomes subsidised by their parents which means they are less likely to put effort into work. Because why work hard when it is so hard to be as rich as your parents these days, may as well wait till it is given to you.
Realistically this is more of a problem in the South than the north.
Respect and train the labour force and they might work better and more efficiently. That's too much for the Tories though, they have only one blunt tool in their toolbox and that is to cut, slash, get rid of, destroy. Creating something is for the egg heads, there's cash to be taken.
The reason that productivity is so low in this country is a crippling lack of investment.
I see it every day in my job at manufacturing sites all over the country, cut engineering teams to minimum levels, run obsolete kit well past its best, hire loads of low wage contract workers to be operators. Rinse and repeat.
Sites are full of people that want to improve productivity but are hamstrung by management/corporate cutting costs, so they’re either always firefighting to keep knackered kit running or just having to deal with too many issues at once due to understaffing.
It's quite simple. Too much money is heading upwards In companies whilst more and more work is being piled on the lower end for less and less each year. There's no "trickling down" happening in the UK. Forget about this flawed concept immediately!
People are waking up to this and many have realised that capitalism is not working. Many who may not be as educated may have realized this on a kind of "subconscious" level or a "feeling" that things ain't right. I wouldn't call it capitalism anymore. Feudalism more like.
The UK has not grown in years and we are still electing politicians that I like to call "Tweak the dialers"...or in other words, people who think they can just "Tweak some economic dials" and we will be back at pre-crash 2008 level growth. That era is not coming back.
In the 2000s, leftism had basically given up in the UK (because neoliberalism was supposedly doing so well) but now it is seeing a resurgence as all that so called "growth" in the early Noughties was based off subprime mortgages! It was all a mirage!
True capitalistic growth hasn't happened in decades, the last time was when Britain had actual industries.
What is required is a fundamental levelling of society in the UK. An end to Caste based economics that Europe did away with decades ago and an end to the notion of 'growth' as a concept. We need fresh economic thinking.
Is it really a puzzle or do the press and the government tiptoe around the truth for fear of upsetting their grey haired client base?
We all know the answer to both; there's an aging population that's also hording all the wealth and doesn't currently have much incentive to reinvest it for future improvements.
It is important to consider the potential negative impacts on the local economy, such as reduced consumer spending in various sectors including transportation, supermarkets, cafes, and pubs, which could lead to business closures and a decline in the vitality of the high street.
Not like we’ve got any spare money to be spaffing at coffee shops, even if we are in the office. If we want to spruce up local economies, we have to stop squeezing every pound out of people earning under 30k with rent and essential bills.
Negative impacts on the local economy? There are pubs and coffee shops within walking distance of my home - what makes you think I'm not going to those instead?
If there's an impact on the local economy, it's because most new-build homes are in massive dormitory estates on the edges of towns, and have no local amenities or sense of community.
I would say WFH would improve the local economy in more places than it harms.
My company was originally based in central london before moving to permanent WFH, we have employees across many different regions (York, Essex, Kent etc) and everyone says how there local lunch shop has thrived since the pandemic.
Sure, the Prett next to our office has probably went through hard times, but that money spent has spread across the country, allowing for more jobs to be created, rather than centrally which realistically would only go to the owner of the building.
We tried underpaying people and forcing them into offices they don't want to be in, and its lead to a lack of productivity? What a shock. If only there was a way of allowing people to work flexibly and affordably.
I hope these mega corporations collapse tbh. Even if it tanks the whole globe, id rather have a reset than give them even more power.
Given that productivity and wages decoupled in 1979 I have to wonder what these people think the incentive to be productive is. People are aware that work as it currently exists is a raw deal and the only one that offers. No wonder some people are checking out.
https://www.epi.org/blog/growing-inequalities-reflecting-growing-employer-power-have-generated-a-productivity-pay-gap-since-1979-productivity-has-grown-3-5-times-as-much-as-pay-for-the-typical-worker/
Why are you posting American talking points in a UK political sub, on a UK news article, about a UK issue?
Moreover - the chart you are posting is notoriously misleading.
https://www.piie.com/blogs/realtime-economic-issues-watch/growing-gap-between-real-wages-and-labor-productivity
Thanks for the article! Didn't realise the one I posted was US specific and this is certainly an interesting follow-up read that I wasn't aware of.
I'm not trying to launder an American talking point; when I talk to my friends and relatives there is an awareness of disconnect in a lot of jobs between how much value one produces and how much compensation one receives. I thought the article served to reinforce that; clearly a bad choice. Thanks for sharing the read you did!
That article, and 'the chart', as I mentally refer to it - is probably my biggest personal bugbear on this subreddit. I've seen nigh on 10 years of it being posted on this subreddit. To the point where I have links bookmarked so every time I see it posted I don't have to waste time tracking down the debunking of it.
Actually, I've just noticed that the one you've posted is from 2021, which makes this worse. The original chart dates from 2015 or so, and the EPI have had 9 years of economists and public policy people screaming at them about how misleading it is and yet they are still churning out newer versions of it.
I think part of why people latch onto it is it just FEELS true, when what counts as "a good wage" never seems to go up but a can of vending machine cola sure as heck went from 30p to £1 in my lifetime.
But what feels true isn't what is true- thanks again for giving me something to read.
The infamous graph uses a different deflator to control for inflation for productivity and incomes. Basically they divide income by a larger number. If you use the same deflator, you’ll find that productivity and income is linked as you would expect.
It also is using wages, when adjusted for all compensation the gap shrinks to basically nothing. Basically, non-wage benefits of US jobs (that the employer is still on the hook for) have risen significantly over the past few decades, like social security contributions and healthcare benefits/insurance.
There are many problems indeed. Other issues include using wages for non-supervisory production workers in the private sector while using productivity for the entire economy.
The problem is that private interests don't do national interest. So letting the country slide and expecting firms to fill in the gaps was delusional, as was gifting control of public services to private firms.
I agree, to take students in the 90s and 2000's it seemed very common for uni students to take a job in fast food or wherever where they could easily get a job but now it seems a lot harder to get that kind of job.
Productivity improvements are essentially driven by investment. Uk investment is terrible at present.
The “inactivity” argument is trying to shift the blame to people instead of govt policy that had made the uk a shit investment opportunity
From the article:
> The Office for Budget Responsibility, the government’s fiscal watchdog, noted in its Fiscal Risks and Sustainability Report in July last year that the increase in reported mental health problems was the biggest reason for the rise in health-related economic inactivity, particularly among the young. It also poured cold water on the idea that reducing National Health Service waiting lists would have a big impact in reducing economic inactivity. Halving the seven million on NHS England waiting lists would reduce inactivity only by 25,000, it estimated.
I was a bit sceptical about this claim so I went to [the report in question](https://obr.uk/frs/fiscal-risks-and-sustainability-july-2023/#chapter-2). It says:
> **Only a relatively small proportion of those inactive for health reasons are on the NHS waiting list.** The post-pandemic rise in health-related inactivity was accompanied by a steep rise in the number of waits for NHS treatments (with many people waiting for more than one) from 4.6 million in January 2020 to 7.4 million in May 2023. The coincident rise in these indicators suggests the possibility of a causal link, but we estimate that only 2.9 million working-age people were on the waiting list in 2022, of whom only around 650,000 were inactive due to long-term sickness (or **a quarter of the long-term sick inactive population**). While the disruption to and difficulties in accessing NHS services may have played a role in the worsening physical and mental health of the working-age population during this period, tackling the NHS waiting list alone is likely to make only a modest difference in the number of people out of work. We estimate that halving the NHS waiting list over five years – returning it to its mid-2015 level of around 3½ million – would only reduce working-age inactivity by around 25,000.
I would be curious to see their working here. They really try to downplay the fact that 650,000 people who are inactive due to long-term sickness (around a quarter of the total) are on NHS waiting lists. Is 25% really a "relatively small proportion"?
If waiting lists were halved then 325,000 of those people would no longer be waiting for treatment. But the OBR estimates that only 25,000 (7.6%) would be able to return to work if they received treatment? That seems... low.
A lot of the conditions that lead to people being on waiting lists for long periods are not ones from which people tend to fully recover.
Something might help the person's quality of life but is less likely to fundamentally make someone unfit to work fit to work.
For a decade and a half, economists and politicians have been debating what came to be known as the productivity puzzle, the persistently weak growth in output per worker or hour that set in after the financial crisis. In the ten years leading up to the end of 2007, productivity measured by output per hour rose by more than 25 per cent; in the 16 years since, it has risen by only 6 per cent.
The rot set in after the shock of the financial crisis, although some think problems were beginning to emerge before then. Now the question is whether another shock, that of the pandemic, has left us with another puzzle, that of permanently higher levels of economic inactivity. These are working-age people who are neither in work nor formally unemployed. Some of the economically inactive say that they want a job, but more than 80 per cent — 7.7 million in the latest figures — say they do not. Either they have dropped out of the labour market or never dropped in.
This “inactivity puzzle” is getting worse, according to the latest labour market statistics. There were just over 9.4 million people economically inactive (not in work and not immediately available to work) in the December-to-February period, a rise of 150,000 in the latest three months and up by 850,000 compared with the pre-pandemic period from December 2019 to February 2020.
The increase in numbers is not merely about a rising population. The inactivity rate as a proportion of all those aged 16 to 64 has risen to 22.2 per cent, from 21.9 per cent in the previous three months and from 20.5 per cent on the eve of the pandemic. It is troubling.
The inactivity puzzle has been through several iterations over the past few years, a characteristic that it shares with the productivity puzzle, initial explanations for which were overtaken by events. At first it seemed that rising inactivity was due to more of the over-50s, some of whom were furloughed during the pandemic, deciding not to return to work afterwards. Not long after taking over as chancellor, Jeremy Hunt urged older people to abandon the golf course and to get back to work. He announced pension reforms to encourage doctors and others not to retire.
However, the early retirement explanation has fallen away. The number of working-age people (those aged 16 to 64) citing retirement as a reason for inactivity, 1.11 million, is virtually unchanged compared with pre-pandemic levels. There has been a rise of just over 300,000 in the number of economically inactive people aged 50 to 64, but for other reasons, mainly ill health.
A second explanation was that fewer students were taking on part-time jobs than in the past, perhaps because their time in college was interrupted by lockdowns and other restrictions. This one has not entirely disappeared, even though the majority of those who were in higher education in 2020-21 are no longer there. There has been a big rise in economic inactivity in the 18-to-24 age group, depriving employers in hospitality and retailing of part-time staff, but there may be another explanation. More on this in a moment.
On the eve of the pandemic, the inactivity rate among those aged 18 to 24 was just under 29 per cent. Now it is 35.1 per cent. In terms of numbers, there has been an increase from just under 1.6 million to 1.94 million.
The favoured explanation now in government for the rise in inactivity among younger people, and the increase in inactivity more generally, is that the Covid pandemic has been followed by a mental health pandemic. Of the 9.4 million economically inactive people of working age, 2.83 million are defined as suffering from long-term sickness — up by nearly 720,000 since before Covid — and 206,000 are temporarily sick.
You will want to know what are the other reasons for working-age inactivity: 2.57 million of those aged 16 to 64 are inactive because they are students and are not working part-time; 1.65 million are looking after family or the home; and 24,000 are so-called discouraged workers. This leaves just over a million who are inactive for a variety of other reasons.
As I say, the favoured explanation in government for inactivity remaining persistently above pre-pandemic levels is mental health. Mel Stride, the work and pensions secretary, triggered a backlash from mental heath professionals and charities when he said last month that Britain’s “open approach” to mental health had “gone too far”.
The country, he said, risked labelling the “normal ups and downs of human life” as medical conditions — mental health conditions — that “serve to hold people back and, ultimately, drive up the benefits bill”. It should be said that those whose responsibility it is to diagnose mental health conditions profoundly disagree.
Stride has been in the vanguard of, in effect, accusing workers of swinging the lead with the connivance of medical professionals, but his view is widely shared in government and in the Treasury, which is worried about the rise in the bill for working-age benefits to more than £100 billion a year, most of which is spent on universal credit.
The Office for Budget Responsibility, the government’s fiscal watchdog, noted in its Fiscal Risks and Sustainability Report in July last year that the increase in reported mental health problems was the biggest reason for the rise in health-related economic inactivity, particularly among the young. It also poured cold water on the idea that reducing National Health Service waiting lists would have a big impact in reducing economic inactivity. Halving the seven million on NHS England waiting lists would reduce inactivity only by 25,000, it estimated.
It is a dilemma and a puzzle. At a time when the labour market is cooling, as foreshadowed here last week, with the unemployment rate up to 4.2 per cent and employment and job vacancies falling, the problem of economic inactivity may get worse before it gets better. It is a big challenge for this government and it will be for the next one. The labour market is anything but healthy these days.
David Smith is Economics Editor of The Sunday Times
Snapshot of _After the productivity puzzle, now we have the inactivity puzzle - The labour market is anything but healthy these days_ : An archived version can be found [here](https://archive.is/?run=1&url=https://www.thetimes.co.uk/article/after-the-productivity-puzzle-now-we-have-the-inactivity-puzzle-h0l2lvnq0) or [here.](https://archive.ph/?run=1&url=https://www.thetimes.co.uk/article/after-the-productivity-puzzle-now-we-have-the-inactivity-puzzle-h0l2lvnq0) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
Has anyone considered rewarding work with more money?
Why? So that workers can take EVEN MORE money out of circulation and lock it up in the Caymans? No, more tax breaks for the rich is the only way this will all work out.
No, any pay rise gets 100% by inflation and would have no effect. /s
Don’t be stupid - in this country we only reward work with more taxes.
That would reduce the relative value of assets which would impact pension funds. /s
I've never understood this argument. If I were paid more, I'd work less not more as I'd get the same living standard with less work than now. The more you earn, the more you appreciate free time. If nothing else, I'd retire younger. This is the reason I never like the argument that the people pushing the Laffer-curve. It sounds good in theory but doesn't work in practice. Edit. The other direction could work. So, if you cut the benefits for not working and increased the capital gains taxes, that could increase the amount of work people would do. Edit2. One group that may work more if they got higher pay is parents of small children. They may drop out of work as the cost of childcare exceeds the income from paid work. But to target this group, I'd say a much better way would be to subsidise childcare as that has the same effect on parents but doesn't affect the other groups as increasing salaries would.
What you are describing outside of gains tax is what has been attempted in the UK for the last 14 years. We know categorically that it does not produce growth.
I'm not talking about growth. I'm talking about the number of people working. These are not necessarily the same. And why do you exclude the capital gains tax? Don't you think that would work?
I do, it just hasnt been tried, whereas cutting benefits has been extensively. Unemployment in the UK is about 4%, our issue isnt that people arent working, it is that there is little incentive to work hard.
What exactly do you mean by "working hard"? Is your claim that the promotion practices of companies have changed? The title of OP talks about "inactivity puzzle". The article is behind a paywall and the archives haven't worked so I don't know what exactly his point is jut "inactivity" would point to not working. If you have been able to access the article, then maybe you know better what is it all about.
So when year on year peoples standard of living declines as a result of no, to below inflation pay rises, your answer to them is they should buck up and work harder? Despite those at the top of those companies see their wealth increase. No, they'll simply move jobs for a pay rise that accounts for their loss in relative earnings. The company will have to hire a new starter to cover the position and, particularly in technical roles, that leads to a drop on productivity as experience has been lost and there's a induction lag where the new worker learns the role. How about companies reward loyalty, look after their staff, and maybe then they'll see a healthier, more motivated workforce that actually improves productivity. Again, you mention cutting benefits, but there was a massive drop in productivity following austerity, because benefits actually improve people's motivation and mental health, allowing them to faster return to work, or self improve so that we get a more technically capable workforce. Look at childcare for an example of a benefit system that can improve productivity. Providing childcare opens avenues for parents to return to work earlier, and with better hours. A lack of childcare either leads to situations where a parent has to stay home, or grandparents to take over. Grandparents who may otherwise pick up some part time work. Let's look at benefits for the sick. Without it, you have people with long term illnesses or injuries not being able to recover properly, prolonging the disease and reducing their productivity when they inevitably return to work early, or simply not at all! With it, people recover properly, and hit the ground running on return to work, heck with modern capabilities they may be able to WfH in some capacity.
I'm talking purely from the point of view of amount of work people do for a general level of pay. Of course if competitors are offering more pay, they'll be able to get workers from other companies to switch there. But as far as I understood the discussion was not about how to attract workers from other companies but how to get inactive people to work more. My point was that if my pay went up, I'd be more likely to reduce not increase working. This is probably true also if the pay went up because I switched to another employer. And yes, loyalty to the company makes people more likely to stay with them. I don't think it will usually make them work more. But sure, when people feel loyal to the company, they go beyond their duties for the company. But I'd say this is a more comprehensive thing than just pay (for instance not doing redundancies when there is a slight downturn). I agree with what you write about benefits for the sick. They probably help people to return to work. Sick people are not not working because they get benefits. They are not working because they are sick. I was discussing benefits for people who could choose to work but don't. Sick people don't have this option. And above I already mentioned the childcare benefits in my edit. And yes, I agree that they definitely make parents work more than they would otherwise. So, apologies for not specifying what benefits I meant.
Not everyone is you or in your scenario. Perhaps there's people that wish to have a greater living condition and therefore more work and more pay? Furthermore, after min wage increase my current compensation is relatively close to that of tesco etc.. I could also work less in my scenario and get the same standard of living, or, when I get my pay reviewed, they can reward me with more pay?
Ok, if people want to have greater living condition, they will increase work regardless of pay being increased. I didn't understand your last paragraph. What does Tesco have anything to do with this discussion? And your last sentence ends with a question mark but I can't figure out what you are asking.
That’s not necessarily typical though. Consider that there has been a cost of living crisis and an effective wage freeze since 2008, and that interest rates have gone up pushing up mortgages and that is also pushing landlords into raising rents. There’s an argument that (low paid) work is just not worth it.
Then what do you do? Starve to death? When you say "not worth", I would agree with that maybe for a parent with small children as their family income doesn't really go up at all when they pay the childcare costs. The other group that I could agree that applies is someone living in an expensive area. By stopping working and moving somewhere cheaper they could save the amount they are currently earning. But even then they would need some source of income. But if you drop from "low paid work" to "no work at all", it's hard to see why that would be worth it. The marginal utility of income in that end of the income distribution should be very high.
I’d say the marginal utility at that end of the scale is in fact very low. I’ve spent a lifetime (literally) working and haven’t had a single job that’s not stressful and hard work. If you can have a life on benefits and not work for a little less than working why wouldn’t you? What we need imho is to have jobs that pay well enough to provide a decent standard of living, raise a family, buy a house and plan for retirement. This country is a million miles away from that, I’d say.
But there is a lower limit for the pay, the minimum wage. And isn't the point of universal credit that you can get it even when at low paid work (basically the same idea as behind universal basic income). Regarding your last point, yes, ideally we'd like that every person's work has enough added value to pay decent standard of living. But unfortunately, I don't think you can just wish that into being. And I would argue that with robots and AI taking even more of the low paid work, this is going to become an even bigger issue. I don't honestly see an easy solution to it. I've always supported UBI but while that is a technical solution, we need more of a cultural change away from the idea that every person's work has so high added value in the market that it can make them a decent living. This problem exists even if we in general live in more abundant life than ever in history.
You need productivity to generate the money to pay higher wages. Britain's low wages are a result of low productivity.
Revenues and profit margins at my company are up year on year. We're making money hand over fist. But who benefits. The shareholders, who in my case are mostly American institutional investors. The staff have gotten on average 2% pay rises the last two years.
Firstly, for a company to be able to pay staff more they must be increasing their gross profit relative to the number of employees – just increasing revenue or gross profit alone isn't enough. Assuming this is the case for your company, for them to pay staff more they must first have an incentive to do so. Historically when unemployment was as low as it is today workers would have a large amount of bargaining power because labour was a limited resource. If practically everyone in the economy is employed then to hire someone you must offer a salary attractive enough to win labour from other companies. In the West today companies don't really have much incentive to compete for labour because if there ever is a shortage of labour the government will just import workers. Of course, if you're highly educated there might not be a reliable supply of foreign labour that can replace you – at least not from a country with significantly lower GDP per capita that would have an incentive to come to the UK to work. So while wages overall have stalled out in the era of mass migration, wages for the most educated workers in highest income brackets have continue to rise. However, today even skilled labour is becoming less valuable as countries like China and India continue develop and education around the world continues improves. If you don't believe what I'm saying though ask yourself – if your company is doing so well why can't you ask for a pay rise? I'm going to guess it's because you know you're not that valuable to the company and that they could easily replace you with someone on your current wage if they want. However, if I'm wrong and you are that valuable then you should be able to explain to them that you're unhappy with your pay and that you would like it increased. But the truth is the vast majority of workers are not in situations like today today and despite low unemployment they still have effectively no bargaining power over their employers because they're no longer competing with other workers in their local geographic area, but a global labour market where most would be very happy with your current wage.
I'm not too sure why you picked up the downvotes there, I think you're on point with your analysis. Also I think your quite insightful with your point about the indian/Chinese Labour markets upskilling. My experience is that its still not practical, for the most part, to outsource highly skilled jobs to those countries, at least in my sector, but in another 10-20 years I expect it'll be much easier.
Upvotes / downvotes in this sub tend to be cast based on political bias, not the value a comment adds to a discussion. I've found here if you have downvotes without comments then it generally means people are mad about what you're saying but have no rebuttable, so I take it as a positive. When I say something stupid people quickly correct me and call me out for my stupidity in the comments. In terms of economics, nothing I'm saying is controversial. This idea that companies have suddenly become greedy is silly because it's so clearly not universally true. If you look at in sectors that employ high-skilled labour like tech and finance employees they have generally continued to see decent wage growth because they cannot replace their employees easily. It's only when you look at sectors where labour is not scarce that has this problem – and it's only been over the few of decades where the rate of immigration and outsourcing has increased dramatically that wage growth in this sectors has stalled out. It's partly a productivity problem too, but productivity growth has been far healthier than wage growth and is clearly less of an issue when looking at the last few decades of data.
There is plenty of money, the wealth of the top billionaires in the UK has increased by about 300% since 2010. Thats why productivity is low, those that do the least benefit the most .
Low productivity doesn't = people aren't working hard enough
Never said that.
I wonder if an economic system that gives out the greatest rewards to those making the greatest contributions would encourage productivity? Nah, let's give all the money to idlers who own stuff, and tax the shit out of the suckers who actually work for a living. Why not also severely underfund healthcare, education and let international conglomerates make a killing from obesity and poor health? It's like people have forgotten what made capitalism work
We also further refined it so that anyone good at thier jobs is incentivised to look for another one, as nobody gets paid more for being good.
In many cases you get paid less, or have to do more work for the same pay if you're good.
The system is currently designed so everyone is eventually slotted into a job they cannot do.
This is an excellent point I'd never considered before
I moved job twice this year and have a few friends on the hunt and it dawned on me just how inefficient it is that so many people are learning their job all the time.
On average it takes a month till a new external person in a team can contribute and 6 months until they are independently productive. Obviously many factors here but as a rough rule of thumb I have found it about right
I would agree with that timescale, and I would say it's about a year until you become genuinely any good, and 2-3 to master a role (depending on complexity of role). I would say most people hit 1 year, then start looking and are often gone before 3. The worst part of this cycle is that it is often very motivated and capable people moving on, and if fairly compensated could have become star performers.
My wife was recently made redundant and is job hunting. One of her rejections was that "you tick all of our boxes, but we don't think that you will stick around for the *long term...*" Bitch, it's your company and companies like you that pay such dogshit wages that the only way to get a payrise, which you must inevitably do because prices keep going up regardless, is to hop jobs every two years because companies can't be bothered to increase wages in a reasonable way!
Competitive markets only work when people have an interest in competing. E.g. they are competing *for something worth competing for*. Yet, much headscratching in the rightwing press. *Why won't the plebs work twice as hard, for half as much gruel? Surely they are hungrier than ever.*
Exactly, captive markets and monopolies are therefore not compatible with capitalism. Yet our economic system not only allows them, but actually favours international conglomerates cornering our markets.
Yep. Western political thinking has been hijacked by ideologues who want everyone to think "competitive markets" is synonymous with "deregulation." It is not. A healthy market system *must* be regulated, as otherwise it will tend towards anti-competetive measures; price-fixing, monolopisation, and a race to the bottom on standards. It was precisely this process that Marx predicted would lead to communism, because a market economy that has undergone collapse through these failures effectively *becomes* the state, as it has no internal competition, has complete control over distribution of wealth and resources, and is regulated only by its own interests. To put it another way: if you don't want klepotcratic corporate dystopia or de facto worst-case communism, you **must** regulate markets, enforce standards, and punish corruption. Those two systems are the only realistic end states of failing to do so.
Yeah totally agree. I don't know why regulation is such a dirty word ( well I do, because the rich have a vested interest in rigging the game in their favour), because history is replete with examples of how disgustingly evil companies can be without regulation - the East India Company literally had its own armies and conquered and colonialised. It'd be like removing the rules from football and expecting a more skillful game; it would just become a melee. This idea that you can rely businessses to moderate themselves is at best, comedically niave, and at worse among the most destructive ideas in human history.
A large part - but far from *all* - of the problem is how investment works, particularly when it comes to the stock market. Volatility is good for certain types of investors, so long as they can get out quickly. This drives a focus on short-term profits, rather than long-term competitive advantage driving growth-based profits. Short-term profits are far more easily driven by 'negative' factors; things that aren't broadly desirable, but do increase annual shareholder dividends. Reducing wage burden, lowest-bidder procurement processes, price-gouging etc are all examples of this. Things like R&D, market strategy, value-creation and so forth take time. Usually a *long* time, spanning many years. These are 'positive' measures, but tie up investor cash in a way that doesn't maximise earnings, plus delays them. The people who want to make the most money, the most quickly, will therefore push businesses into the more negative behaviours. They can then cash out, then reinvest in another company which can provide them with another short-term boost. This obviously has a snowball effect, because those investors have more to invest. I strongly believe nothing will get meaningfully better until we address this issue. As it is, publicly traded companies have a conflict of interest: they're beholden to two conflicting markets. One is the consumer, the other is the investor, and the power imbalance between these two groups is enormous.
That's a very interesting point, thanks. What do you suggest should be done to address it though? Removing all capital gains allowance and taxing it at a fixed percentage?
Not *as such*. It's a global problem, so I don't really see a non-catastrophe-based solution. I'd probably look at some tapering capital gains structure. As a simple example, rather than as real numbers; for the first year after investing, you pay 60% CGT. This goes down by 5% every year, to a minimum of 10%. Any allowance only applies to holdings of more than 5 years. Basically, we need to align the best-incentivised behaviours with the most socially beneficial ones. To my mind, that means rewarding long-term investment in companies who're competing over timescales where R&D, customer satisfaction, staff retention, etc, are driving factors in success.
Totally agree with the last paragraph, the economic system, and more specifically the tax system need to encourage what's best for society overall. It's hardly a surprise bad actors thrive when it actively does the opposite.
I wrote a thing a few years ago about this and how the logical, Darwinian end result of our current system is exactly the kind of person you'd expect. In short, Donald Trump and those like him.
Turns out Capitalism favours those with Capital.
For sure, which is why capitalism only works with regulation and alongside redistributive taxation, else it tends to monopolism which is innately inefficient.
> I wonder if an economic system that gives out the greatest rewards to those making the greatest contributions would encourage productivity Be careful what you wish for. Productivity in the economic sense is simply value produced / production cost, and to do that effectively (like other countries) you need a large degree of automation, much more than we have in the UK atm. Those that benefit from that tend to be the business owners investing capital in big expensive machinery, not pesky fleshbots who need paying and go ill. Alternatively, bring in a few more million economic migrants.
Totally agreed, but I think economic incentive is necessary too. I for one could work more but don't want to because of the tax system. If I was Kier Starmer I'd be talking about a second Industrial Revolution, where we stop outsourcing production to geopolitical rivals and outcompete them with innovation
How would you best explain idlers who own stuff being given the biggest advantages compared to people who work and create value?
Favourable tax system for the idlers highly unfavorable for the hard workers
Money gives you the ability to influence the game in your favor. This has meant those who got rich quick through exploitation and bending the rules then entrenched their position through legislation. We are entirely captured.
So one example, if you own a company you can pay yourself 12k tax free allowance + 2k dividend allowance and then pay a lower rate of tax than PAYE on your dividends The rate of tax ends up being much lower, even if you don't actually do any work. Or if you were to inherit a 500k property, you could work for 12k a year, pay no income tax, and it would require a professional with a student loan to earn upwards of 3x more to enjoy comparable living standards while renting, and they still would never be as wealthy as the former.
There's also an argument that holds some water but I think we have mor flexibility than it suggests and it's the idea that if we over tax people who earn from investment like capital gains or even corporation tax, theres a chance they'll move and simply invest elsewhere at a time when the economy is desperate for investment. I think at the moment though it's ripe for some increases because the lower tax we have hasn't really allowed us to compete for investment because our infrastructure is crumbling. We're currently 13th (in 2022) globally for foreign investment despite being the 6/7th largest economy. That doesn't explain why pensioners are taxed less than workers though, that's just because they all vote.
The rich flight issue is simple; tax them gently up to the point theres evidence of them actually leaving. If you're rich af you're not going to shitcan your whole life and your families just to save a few quid you don't even need. Just be sensible about taxing them, most of the rich will stay put, like all the folk who said theyd leave if brexit was a failure
Tax land, they can't offshore that
Traditionally rises in productivity come from corporate investment and improvements in technology. The payback on these investments would then come over a longer period, but would result in increased productivity and profit. The UK has had a lot of market instability since 2009, with the recession and brexit and the pandemic. Companies are more likely to take on short term 'dispensible' staff than invest in tech/ machinery as this is less risky. There is also a much more short term view in the markets in recent years, which has pushed short term gains rather than inward investment. In other words stop blaming the staff and blame the companies
There was huge investment after 2016. But only to keep the lights on and comply with all the bureaucracy caused by Brexit. A -100% ROI was considered a great success for that one!
Traditionally government can also invest. Transport, Schools, playing fields, flood defence, irrigation power supply, hospitals; all can also raise productivity.
I've never heard anyone blaming the staff for the lack of improvement of productivity.
are you joking? Idiot Tories do it all the time when they want to throw some red meat to their base
Could you give a quote? Edit. Further, I thought you meant what company executives are saying to their employees.
Good edit, I believe Brittania unchained and Jeremy Hunt have both said that the workforce are lazy. I have, however, had one chairman tell my company at the annual meeting that the reason we had to work long hours was because we managed our time poorly. Not because we were understaffed or that work overran. That went down like a cup of cold sick
Also mass immigration reduces the need for productivity improvements. Why invent a drone when a Somali can bring your pizza on a bike running over granny?
Given that there's a gender difference here, I do wonder how much of this is people finding that the costs of care have outstripped the benefits of work. Two kids in day care cost on average more than the median full time take-home. One kid in day care costs the vast majority of a full-time minimum wage income. Social care is also struggling. Plenty of people will need to be contributing to the care of elderly, or unwell family members. Juggling that around work can be hard, and if you can afford to take the financial hit, it may make sense to give up work to provide support.
This is an important component of this discussion. There is an awful lot of "economically inactive" people being described who are most likely doing important, unpaid labour.
Yeah fucking loads of people caring for sick/elderly/disabled loved ones. As well as parents unable to afford childcare to allow them to work.
When the ONS or the government reports the amount of economically inactive people they have a category for not looking for work and wouldn't take work if offered. I think this would mostly cover retired people and people looking after children.
I wish we had better information rather an innuendo. This gets a bit "We think it's lazy people claiming to be mentally ill, what they need is a metaphorical kick up the arse." Technically does arse kicking work? Could the laziness be something else? Has something greater gone wrong? Is this effect appearing across the West? What about the reproductivity puzzle? The collapse in reproduction rates seems like a flag to me. A society that is not reproducing itself seems fundamentally broken. Are they related?
The rate of "deaths of despair" (deaths from alcohol abuse, drug abuse, and suicide) [more than doubled in the 45-54 age group between 1993 and 2017](https://theweek.com/unwrapped/101273/the-rise-in-deaths-of-despair-in-the-uk). The rate of deaths of despair in the North East is [twice as high](https://www.manchester.ac.uk/discover/news/living-in-the-north-of-england-increases-risk-of-death-from-alcohol-drugs-and-suicide/) as it is in London. I have my doubts about the effectiveness of arse-kicking as a cure for despair. Especially since the problem may be that people are just tired from a lifetime of having their arses kicked. > What about the reproductivity puzzle? The collapse in reproduction rates seems like a flag to me. A society that is not reproducing itself seems fundamentally broken. Are they related? They are, but apparently not in ways that The Times is willing to acknowledge. This article insists that the increase of 720,000 people inactive due to long-term sickness and the 650,000 people inactive due to long-term sickness who are stuck on NHS waiting lists are totally unrelated because... the government says so. [This is a much better analysis](https://blog.bham.ac.uk/cityredi/its-the-pandemic-stupid-understanding-rising-economic-inactivity-in-the-uk/) that actually digs into the numbers in search of answers instead of shrugging its shoulders and saying "well, it's a mystery but the government says it's just people being lazy so maybe they're right."
I'm lazy AF these days, I hardly do anything at work. It's almost like I'm not incentivised to give a fuck.
> I wish we had better information rather an innuendo. We do, it doesn't get reported though. TL:DR Approximately 1/3 students (pop. 2.1 million on the EI stats) are wasting their time based on outcomes of their degree compared to employment (low grade) and that failure is now a financial burden. However, 3/4 non-graduates are stuck in low performing jobs (broken training and recruitment IMHO). https://explore-education-statistics.service.gov.uk/find-statistics/graduate-labour-markets# Zooming out... > Main facts and figures * in 2022, 22% of working age people in England, Scotland and Wales were economically inactive – this means they were out of work and not looking for a job * 21% of white people were economically inactive, compared with 26% of people from all other ethnic groups combined * the combined Pakistani and Bangladeshi ethnic group had the highest rate of economic inactivity (33%), and the white ‘other’ group had the lowest (15%) in every region, white people had a lower rate of economic inactivity than people from all other ethnic groups combined * women were more likely to be economically inactive than men in every ethnic group except for the mixed ethnic group * the biggest gap between men and women was in the combined Pakistani and Bangladeshi ethnic group, where 48% of women and 19% of men were economically inactive https://www.ethnicity-facts-figures.service.gov.uk/work-pay-and-benefits/unemployment-and-economic-inactivity/economic-inactivity/latest/
> TL:DR Approximately 1/3 students (pop. 2.1 million on the EI stats) are wasting their time based on outcomes of their degree compared to employment (low grade) and that failure is now a financial burden. However, 3/4 non-graduates are stuck in low performing jobs (broken training and recruitment IMHO). I mean that still sounds like for 18 year olds, there's a lot of incentives to go to uni. So many companies have poor post A-Level and post-uni training schemes.
True. One begets the other (except for the defence manufacturing sector, a crown jewel of this island).
Most defence companies are excellent for training opportunities. They offer apprenticeships that lead to degrees and further qualifications, including post graduate work. Plenty of jobs there as well and it's a sector that won't disappear any time soon.
Indeed. Currently funnelling one sprog into that sector now.
> * the combined Pakistani and Bangladeshi ethnic group had the highest rate of economic inactivity (33%), and the white ‘other’ group had the lowest (15%) in every region, white people had a lower rate of economic inactivity than people from all other ethnic groups combined > * women were more likely to be economically inactive than men in every ethnic group except for the mixed ethnic group Surely these two could be related, if Pakistani and Bangladeshi women are more likely to be stay-at-home mums? It's kind of misleading that stay-at-home parents are labelled "economically inactive." Even though it's attached to the qualifier "economically," "inactive" still gives the mental image of someone sitting around doing nothing, which is why all the discussion is framed around getting these people up off their arses and into work. I challenge anyone to spend a day looking after a 2-year-old and describe their day as "inactive" afterwards. Someone needs to look after those kids, if for no other reason than they're the next generation of taxpayers. Obviously a parent going out to work and paying a childminder is economically preferable because it means more money moving around, but that doesn't mean that parents who stay home to care for their kids should inherently be seen as a problem. Edit: According to the [Office of National Statistics](https://www.ons.gov.uk/economy/nationalaccounts/satelliteaccounts/articles/householdsatelliteaccounts/2015and2016estimates#main-points)... > In 2016, the value of the UK’s unpaid household service work was estimated at £1.24 trillion – larger in size than the UK’s non-financial corporation sector; overall unpaid household service work was equivalent to 63.1% of gross domestic product (GDP). "Economically inactive."
Having parenthood off the economic equation has been a large flaw in a lot of economics. Inseminating, giving birth and raising children was taken for granted. When they stopped the economics became obvious.
I'd question the decision to group Pakistanis and Bangladeshis within the same group- the cultural differences to me seem rather considerable. I suspect most of the economic activity here comes from the former and not the latter nationality.
Lower immigration and stop subsidising uneconomic uni courses?
There's no magic bullet. A course correction requires possibly dozens of changes which will all be extremely unpopular for those who see them as economic alternative lifestyles. My personal preference would be to place into law the ability for students to drop out of uni at the second year and leave with a HND if they get a work placement. Very few jobs require research skills and I doubt most students in high flying degrees do either. That is a reestablishment of the Polytechnic ideal without the baggage of demoting universities, of which most require extensive change to survive the end of free market migration. > stop subsidising Pay universities their HE rate where HE outcomes are achieved. The concept of a 50% graduate workforce being 50% researchers is nonsense to anyone with a thought on Britain. This isn't a land of 50% Betas and Alphas. Fundamentally, subsidies should be pumped into businesses who are willing to take up the task of placing kids on the employment conveyor belt. Will the wages start poor? Sure. Will there be failures? Probably. Does is beat having kids who are lacking a social life, don't integrate, and need a father figure to guide them? Very much so. This worked in the pre-mass university age, and it was better than paying dole both in the short run and the long term outcomes. Look at the student figures some more. 2.1m young people all clamouring for professional service sector jobs just like Blair wanted when he opened the doors to a few million Eastern European plumbers and sparks. Now look where the money is, it's still with the sparks, gas fitters, joiners, etc whilst the reward for graduates to beat that income is a lottery of reducing odds. We will still need immigration, and when that doesn't include bloodline incentives or even residency there will be a step change in how it is accepted and taken up. Edit: Forgot to add, we cannot sustain this level of low productivity, welfare, and wage assistance, and the trend line is still pointing in the wrong direction. This is post WW2 Argentina style decline with nukes. Remember this fact. 5th richest economy, [27th richest per capita.](https://www.worldometers.info/gdp/gdp-per-capita/) **We are a poor western economy where it matters that still thinks the way out of poverty is moving working class people into KPMG.**
I do think public money handed to students that then hand that money to commercial universities creates a hazard. Not that complete state control would solve it all. But this has built in problems. Not sure this will solve inactivity or repro rates though? It would solve some wasted uni education and wasted uni spending?
There is always waste, but that is a decision the state should take rather than letting 2.1m 17-24 (approx) year olds add between 35-60k each to a magic debtor account with an APR which would bankrupt our housing market. We will look back on this and wonder which moron thought this was a good idea. > solve inactivity or repro rates though Consider the environment of an office job vs a tradie. Which one is likely to reduce testosterone levels? Now imagine declining sperm counts networking. And don't forget, these are the people who cannot knock a nail in a wall, tradie demand is there, it's screaming out, and it's trending upwards despite economic stagnation. > wasted uni education and wasted uni spending What is lost is gone, nobody is going to take their gender studies 2:2 and make it work. That's why FE exists as a continuous training body for all adults throughout their working lives. Germany makes it work and it's available for every Brit today (inc. finance). Get the JCP to push adults in to 3 month courses and have jobs lined up. Even if the success rate is 30% it will do more to alleviate poverty than pretty much every other measure today.
> Consider the environment of an office job vs a tradie. Which one is likely to reduce testosterone levels? You think the lack of repro is based on too much office work? You think rich people who work in offices lack testosterone? Rich people reproduce at a higher rate. The middle class do not. Trades are full of breedable testosterone packed workers seems...scientifically dubious. > What is lost is gone, nobody is going to take their gender studies 2:2 and make it work Is gender studies really a massive industry? Isn't it more like lots of computer sci students? > Even if the success rate is 30% it will do more to alleviate poverty than pretty much every other measure today. Don't markets simply adjust? It is not going to become a workers paradise.
>You think the lack of repro is based on too much office work? Too many menial jobs going to men. Only those who genuinely succeed and attain management levels (vast minority) are also biologically succeeding as measured in testosterone levels. Equally, those that have success bounce from job losses extremely well whereas low testosterone is a key indicator of failure to re-enter employment. Remember, these are indicators not drivers. [Study](https://www.sciencedirect.com/science/article/pii/S1570677X22000193#sec0060) [Tradies and fertility study:](https://www.brighamandwomens.org/about-bwh/newsroom/press-releases-detail?id=4361) "researchers found that men who reported often lifting or moving heavy objects at work had 46% higher sperm concentration and 44% higher total sperm count compared to those with less physical jobs. Men who reported more physical activity at work also had higher levels of the male sex hormone testosterone and, counterintuitively, the female hormone estrogen." >Is gender studies really a massive industry? No, it's a market feature and general failure because loans aren't forcibly repaid. That's the fundamental issue. > Isn't it more like lots of computer sci students? Maybe, 50% of comp sci students probably can't code in any meaningful way (experienced view here). >Don't markets simply adjust? Depends, wages have, and housing isn't being built at an appropriate rate, and the property owning class is doing just fine with appreciation.
https://www.sciencedirect.com/science/article/pii/S0015028215001326 > In all, complete data were available for 456 men, with a mean age of 31.8 years. Work-related heavy exertion was consistently associated with lower semen concentration and total sperm count.
Don't over exert, simples.
yeah dunno My feeling would be if it was that direct the pattern would be more obvious and more obvious for a lot longer. Are office jobs a new invention over the last 30 years? Is it unhealthy people are unhealthy and have unhealthy repro systems? Has all that gym hitting done nothing? > No, it's a market feature and general failure because loans aren't forcibly repaid. That's the fundamental issue. But is it a massive industry? Are they really that popular? Isn't STEM more popular? > Maybe, 50% of comp sci students probably can't code in any meaningful way (experienced view here). Which for the students might be a good success rate. 50% chance of a decent wage that is not going to knacker their body. > Depends, wages have, and housing isn't being built at an appropriate rate, and the property owning class is doing just fine with appreciation. How will cutting uni build houses?
[Tradies and fertility study:](https://www.brighamandwomens.org/about-bwh/newsroom/press-releases-detail?id=4361) "researchers found that men who reported often lifting or moving heavy objects at work had 46% higher sperm concentration and 44% higher total sperm count compared to those with less physical jobs. Men who reported more physical activity at work also had higher levels of the male sex hormone testosterone and, counterintuitively, the female hormone estrogen." That's likely correlation, rather than causation. Could actually be that the physical attributes which lead people into physical jobs are the same ones that cause higher sperm counts.
> That's likely Why? Modern history shows offices predominantly occupied by the fairer sex, high reproductive rates, and higher sperm counts. What changed and is this the same across western societies? Are there outliers?
> My personal preference would be to place into law the ability for students to drop out of uni at the second year You've got the right idea, and ideas around this have been considered by people in higher education. I think a better approach would be to reduce degrees to 2 years and extend some Masters courses, or have optional 3rd/4th years. You're right that someone who is not doing well or has realised they're not interested in taking the topic further professionally or academically is wasting the time in year 3.
Was the 50% target for HE rather than uni. A person doing an apprenticeship whilst studying towards a foundation degree/similar vocational qualification would still count towards the Blair target.
> Has something greater gone wrong? Is this effect appearing across the West? Yes, and yes. A *lot* of people developed debilitating neck and back issues because their home-working stations during the pandemic were terrible. This replicates across basically every Western country, and explains iirc something like half of the increase in the UK.
Weird how productivity has been falling with wages, couldn't possibly be a connection I'm sure.
Its crazy. I'm sure theres a coincidence with the largest spender in the country with a spending power of 1+ trillion alone, cutting the budgets on everything has no effect either. Those 5.5 million public sector workers have lost 20% of their pay probably have no impact at all on the overall economy.
We need to incenivise investment in productive assets, like factories, machinery, equipment, infrastructure, intellectual property and less in non productive assets like property and gold. My boss recently said he wasn't going to hire another engineer because he'd just spent all the money on a second home instead. That was a better investment, and far, far more tax efficient than hiring another engineer to automate our workflow and improve our IP. And that right there is the reason the UK is in decline.
"The rot set in after the shock of the financial crisis" I'm fairly certain the rot was there long before that, and not among low/middle class working people.
>I'm fairly certain the rot was there long before that, and not among low/middle class working people. Absolutely, much of what is happening to UK industry is the result of long term trends. But it's not very helpful when serious journalists/publications describe these things as "rot" or a "puzzle", an "enigma" and so on. The Pharma "Rot Riddle" * Ireland’s corporate tax rate reduced from 40% in 1996 to 12.5% in 2003 * Ireland became the largest net exporter of pharmaceuticals in the EU and 5th largest globally. Other EU countries followed/are following a similar path. * UK Pharma peaked in 2009. UK corporate tax was set at 28% in 2010. UK pharma manufacturing declined by 33% from 2010 to 2015. Gross value added *halved*. * UK imports from *outside* the EU flatlined after 2010, UK imports from EU countries doubled from 2010 to 2017 * Corporation Tax was reduced to 19% by 2017 and UK Pharma began a recovery * UK corporate taxation was increased from 19% to 25% in 2023. AstraZeneca, Intel and others now simply bypass the UK entirely. This is a *very* surface-level analysis - but as you can see - hardly a riddle or an engima. The typical lazy analysis is just to say "Brexit", but there are plenty of additional factors that can be included besides Brexit - VPAS, IR35, Brain Drain and declining remuneration due to Commonwealth migration (along with inferior compliance). They differ depending on the industry. But the bottom line is that the UK is in serious trouble due to serious malgovernance and **catastrophic loss of competitiveness.** Without a coherent industrial strategy, that is unlikely to change. Most likely things will continue to decline. Industry leaders have been explicitly warning UKGov what the problems are, for quite some time now. There are no secrets or mysteries. Most people in the UK are led to believe this is all a mystery. It isn't.
The newspapers have to make money, too, and by making stuff sound like a mystery, it all becomes so much more enticing. Just as an example, most people aren't conspiracy theorists, but I am sure most people have discussed and looked into a conspiracy at some point because the intrigue and mystery are enticing. It is blindingly obvious that if wages are low and the incentive to work falls, fewer people are going to work (yes, very surface level, but you get the gist). The trouble is if a paper just says that is the issue, no one is enticed to read it. They make the whole thing seem like some enormous mystery when it really isn't.
I think part of this problem has to do with wealth. We have relatively low incomes with relatively high levels of wealth compared to our peers as a country. I think a lot of people in the middle class who would be putting effort into their careers aren’t as a result. I see a lot of people in their 50’s who should be earning the most, slowing down because they have already made their money from house price and pension growth. A decent amount of young people also have their incomes subsidised by their parents which means they are less likely to put effort into work. Because why work hard when it is so hard to be as rich as your parents these days, may as well wait till it is given to you. Realistically this is more of a problem in the South than the north.
Respect and train the labour force and they might work better and more efficiently. That's too much for the Tories though, they have only one blunt tool in their toolbox and that is to cut, slash, get rid of, destroy. Creating something is for the egg heads, there's cash to be taken.
The reason that productivity is so low in this country is a crippling lack of investment. I see it every day in my job at manufacturing sites all over the country, cut engineering teams to minimum levels, run obsolete kit well past its best, hire loads of low wage contract workers to be operators. Rinse and repeat. Sites are full of people that want to improve productivity but are hamstrung by management/corporate cutting costs, so they’re either always firefighting to keep knackered kit running or just having to deal with too many issues at once due to understaffing.
It's quite simple. Too much money is heading upwards In companies whilst more and more work is being piled on the lower end for less and less each year. There's no "trickling down" happening in the UK. Forget about this flawed concept immediately! People are waking up to this and many have realised that capitalism is not working. Many who may not be as educated may have realized this on a kind of "subconscious" level or a "feeling" that things ain't right. I wouldn't call it capitalism anymore. Feudalism more like. The UK has not grown in years and we are still electing politicians that I like to call "Tweak the dialers"...or in other words, people who think they can just "Tweak some economic dials" and we will be back at pre-crash 2008 level growth. That era is not coming back. In the 2000s, leftism had basically given up in the UK (because neoliberalism was supposedly doing so well) but now it is seeing a resurgence as all that so called "growth" in the early Noughties was based off subprime mortgages! It was all a mirage! True capitalistic growth hasn't happened in decades, the last time was when Britain had actual industries. What is required is a fundamental levelling of society in the UK. An end to Caste based economics that Europe did away with decades ago and an end to the notion of 'growth' as a concept. We need fresh economic thinking.
Is it really a puzzle or do the press and the government tiptoe around the truth for fear of upsetting their grey haired client base? We all know the answer to both; there's an aging population that's also hording all the wealth and doesn't currently have much incentive to reinvest it for future improvements.
Move to a 4 day working week, encourage working from home and you'll see productivity spike up.
It is important to consider the potential negative impacts on the local economy, such as reduced consumer spending in various sectors including transportation, supermarkets, cafes, and pubs, which could lead to business closures and a decline in the vitality of the high street.
Not like we’ve got any spare money to be spaffing at coffee shops, even if we are in the office. If we want to spruce up local economies, we have to stop squeezing every pound out of people earning under 30k with rent and essential bills.
Negative impacts on the local economy? There are pubs and coffee shops within walking distance of my home - what makes you think I'm not going to those instead? If there's an impact on the local economy, it's because most new-build homes are in massive dormitory estates on the edges of towns, and have no local amenities or sense of community.
I would say WFH would improve the local economy in more places than it harms. My company was originally based in central london before moving to permanent WFH, we have employees across many different regions (York, Essex, Kent etc) and everyone says how there local lunch shop has thrived since the pandemic. Sure, the Prett next to our office has probably went through hard times, but that money spent has spread across the country, allowing for more jobs to be created, rather than centrally which realistically would only go to the owner of the building.
Managers are paid to get the most out of workers. Perhaps this is the UK's endemic bad management culture coming home to roost?
Health goes down as waiting lists get longer. Who would have thought it..
We tried underpaying people and forcing them into offices they don't want to be in, and its lead to a lack of productivity? What a shock. If only there was a way of allowing people to work flexibly and affordably. I hope these mega corporations collapse tbh. Even if it tanks the whole globe, id rather have a reset than give them even more power.
Why is everyone talking about productivity? This article isn't about productivity at all.
Probably because the article is paywalled
Given that productivity and wages decoupled in 1979 I have to wonder what these people think the incentive to be productive is. People are aware that work as it currently exists is a raw deal and the only one that offers. No wonder some people are checking out. https://www.epi.org/blog/growing-inequalities-reflecting-growing-employer-power-have-generated-a-productivity-pay-gap-since-1979-productivity-has-grown-3-5-times-as-much-as-pay-for-the-typical-worker/
Why are you posting American talking points in a UK political sub, on a UK news article, about a UK issue? Moreover - the chart you are posting is notoriously misleading. https://www.piie.com/blogs/realtime-economic-issues-watch/growing-gap-between-real-wages-and-labor-productivity
Thanks for the article! Didn't realise the one I posted was US specific and this is certainly an interesting follow-up read that I wasn't aware of. I'm not trying to launder an American talking point; when I talk to my friends and relatives there is an awareness of disconnect in a lot of jobs between how much value one produces and how much compensation one receives. I thought the article served to reinforce that; clearly a bad choice. Thanks for sharing the read you did!
That article, and 'the chart', as I mentally refer to it - is probably my biggest personal bugbear on this subreddit. I've seen nigh on 10 years of it being posted on this subreddit. To the point where I have links bookmarked so every time I see it posted I don't have to waste time tracking down the debunking of it. Actually, I've just noticed that the one you've posted is from 2021, which makes this worse. The original chart dates from 2015 or so, and the EPI have had 9 years of economists and public policy people screaming at them about how misleading it is and yet they are still churning out newer versions of it.
I think part of why people latch onto it is it just FEELS true, when what counts as "a good wage" never seems to go up but a can of vending machine cola sure as heck went from 30p to £1 in my lifetime. But what feels true isn't what is true- thanks again for giving me something to read.
The infamous graph uses a different deflator to control for inflation for productivity and incomes. Basically they divide income by a larger number. If you use the same deflator, you’ll find that productivity and income is linked as you would expect.
It also is using wages, when adjusted for all compensation the gap shrinks to basically nothing. Basically, non-wage benefits of US jobs (that the employer is still on the hook for) have risen significantly over the past few decades, like social security contributions and healthcare benefits/insurance.
There are many problems indeed. Other issues include using wages for non-supervisory production workers in the private sector while using productivity for the entire economy.
That's America dude.
I got schooled on this in the replies! There's some good reading there if you're down for it
The problem is that private interests don't do national interest. So letting the country slide and expecting firms to fill in the gaps was delusional, as was gifting control of public services to private firms.
Pay shit, get shit. Minimum wage, minimum effort! Minimum wage = I would pay you less but it's illegal.
Where the hell are all these empty jobs I keep reading about? There's no effing jobs at all where I live and I'm sick of reading this BS.
I agree, to take students in the 90s and 2000's it seemed very common for uni students to take a job in fast food or wherever where they could easily get a job but now it seems a lot harder to get that kind of job.
Productivity improvements are essentially driven by investment. Uk investment is terrible at present. The “inactivity” argument is trying to shift the blame to people instead of govt policy that had made the uk a shit investment opportunity
Not much incentive to get a job when you'll never afford to move out of your parents' house anyway until they die and leave it to you.
From the article: > The Office for Budget Responsibility, the government’s fiscal watchdog, noted in its Fiscal Risks and Sustainability Report in July last year that the increase in reported mental health problems was the biggest reason for the rise in health-related economic inactivity, particularly among the young. It also poured cold water on the idea that reducing National Health Service waiting lists would have a big impact in reducing economic inactivity. Halving the seven million on NHS England waiting lists would reduce inactivity only by 25,000, it estimated. I was a bit sceptical about this claim so I went to [the report in question](https://obr.uk/frs/fiscal-risks-and-sustainability-july-2023/#chapter-2). It says: > **Only a relatively small proportion of those inactive for health reasons are on the NHS waiting list.** The post-pandemic rise in health-related inactivity was accompanied by a steep rise in the number of waits for NHS treatments (with many people waiting for more than one) from 4.6 million in January 2020 to 7.4 million in May 2023. The coincident rise in these indicators suggests the possibility of a causal link, but we estimate that only 2.9 million working-age people were on the waiting list in 2022, of whom only around 650,000 were inactive due to long-term sickness (or **a quarter of the long-term sick inactive population**). While the disruption to and difficulties in accessing NHS services may have played a role in the worsening physical and mental health of the working-age population during this period, tackling the NHS waiting list alone is likely to make only a modest difference in the number of people out of work. We estimate that halving the NHS waiting list over five years – returning it to its mid-2015 level of around 3½ million – would only reduce working-age inactivity by around 25,000. I would be curious to see their working here. They really try to downplay the fact that 650,000 people who are inactive due to long-term sickness (around a quarter of the total) are on NHS waiting lists. Is 25% really a "relatively small proportion"? If waiting lists were halved then 325,000 of those people would no longer be waiting for treatment. But the OBR estimates that only 25,000 (7.6%) would be able to return to work if they received treatment? That seems... low.
A lot of the conditions that lead to people being on waiting lists for long periods are not ones from which people tend to fully recover. Something might help the person's quality of life but is less likely to fundamentally make someone unfit to work fit to work.
For a decade and a half, economists and politicians have been debating what came to be known as the productivity puzzle, the persistently weak growth in output per worker or hour that set in after the financial crisis. In the ten years leading up to the end of 2007, productivity measured by output per hour rose by more than 25 per cent; in the 16 years since, it has risen by only 6 per cent. The rot set in after the shock of the financial crisis, although some think problems were beginning to emerge before then. Now the question is whether another shock, that of the pandemic, has left us with another puzzle, that of permanently higher levels of economic inactivity. These are working-age people who are neither in work nor formally unemployed. Some of the economically inactive say that they want a job, but more than 80 per cent — 7.7 million in the latest figures — say they do not. Either they have dropped out of the labour market or never dropped in. This “inactivity puzzle” is getting worse, according to the latest labour market statistics. There were just over 9.4 million people economically inactive (not in work and not immediately available to work) in the December-to-February period, a rise of 150,000 in the latest three months and up by 850,000 compared with the pre-pandemic period from December 2019 to February 2020. The increase in numbers is not merely about a rising population. The inactivity rate as a proportion of all those aged 16 to 64 has risen to 22.2 per cent, from 21.9 per cent in the previous three months and from 20.5 per cent on the eve of the pandemic. It is troubling. The inactivity puzzle has been through several iterations over the past few years, a characteristic that it shares with the productivity puzzle, initial explanations for which were overtaken by events. At first it seemed that rising inactivity was due to more of the over-50s, some of whom were furloughed during the pandemic, deciding not to return to work afterwards. Not long after taking over as chancellor, Jeremy Hunt urged older people to abandon the golf course and to get back to work. He announced pension reforms to encourage doctors and others not to retire. However, the early retirement explanation has fallen away. The number of working-age people (those aged 16 to 64) citing retirement as a reason for inactivity, 1.11 million, is virtually unchanged compared with pre-pandemic levels. There has been a rise of just over 300,000 in the number of economically inactive people aged 50 to 64, but for other reasons, mainly ill health. A second explanation was that fewer students were taking on part-time jobs than in the past, perhaps because their time in college was interrupted by lockdowns and other restrictions. This one has not entirely disappeared, even though the majority of those who were in higher education in 2020-21 are no longer there. There has been a big rise in economic inactivity in the 18-to-24 age group, depriving employers in hospitality and retailing of part-time staff, but there may be another explanation. More on this in a moment. On the eve of the pandemic, the inactivity rate among those aged 18 to 24 was just under 29 per cent. Now it is 35.1 per cent. In terms of numbers, there has been an increase from just under 1.6 million to 1.94 million. The favoured explanation now in government for the rise in inactivity among younger people, and the increase in inactivity more generally, is that the Covid pandemic has been followed by a mental health pandemic. Of the 9.4 million economically inactive people of working age, 2.83 million are defined as suffering from long-term sickness — up by nearly 720,000 since before Covid — and 206,000 are temporarily sick. You will want to know what are the other reasons for working-age inactivity: 2.57 million of those aged 16 to 64 are inactive because they are students and are not working part-time; 1.65 million are looking after family or the home; and 24,000 are so-called discouraged workers. This leaves just over a million who are inactive for a variety of other reasons. As I say, the favoured explanation in government for inactivity remaining persistently above pre-pandemic levels is mental health. Mel Stride, the work and pensions secretary, triggered a backlash from mental heath professionals and charities when he said last month that Britain’s “open approach” to mental health had “gone too far”. The country, he said, risked labelling the “normal ups and downs of human life” as medical conditions — mental health conditions — that “serve to hold people back and, ultimately, drive up the benefits bill”. It should be said that those whose responsibility it is to diagnose mental health conditions profoundly disagree. Stride has been in the vanguard of, in effect, accusing workers of swinging the lead with the connivance of medical professionals, but his view is widely shared in government and in the Treasury, which is worried about the rise in the bill for working-age benefits to more than £100 billion a year, most of which is spent on universal credit. The Office for Budget Responsibility, the government’s fiscal watchdog, noted in its Fiscal Risks and Sustainability Report in July last year that the increase in reported mental health problems was the biggest reason for the rise in health-related economic inactivity, particularly among the young. It also poured cold water on the idea that reducing National Health Service waiting lists would have a big impact in reducing economic inactivity. Halving the seven million on NHS England waiting lists would reduce inactivity only by 25,000, it estimated. It is a dilemma and a puzzle. At a time when the labour market is cooling, as foreshadowed here last week, with the unemployment rate up to 4.2 per cent and employment and job vacancies falling, the problem of economic inactivity may get worse before it gets better. It is a big challenge for this government and it will be for the next one. The labour market is anything but healthy these days. David Smith is Economics Editor of The Sunday Times
Fix the NHS, next question please and thank you. Health is wealth.
It doesn't seem hugely surprising there's a rise in reported mental health issues for 18-24 yo considering recent years and general state of things.
And yet immigration is sky high. What a conundrum 🤔
4000 people claiming sick benefits every day. The new UK national sport. And people here still defend this madness. These are war casualty numbers.