Politicians: cherry-picking the best stats for your speeches doesn't persuade the public all is well, it persuades them they're being lied to ft.com/content/ac72d1… A worked example follows...
Philip Hammond's spring speech 2019 (the last "normal" speech of this kind, I think?) rattles off a string of wonderful stats about the "remarkably robust" economy. All are technically correct. But still...
Fastest wage growth - ok, at that moment, in nominal terms (see chart) but this is hardly the stat that matters most to people, which is real terms wage growth, which had been dire for a decade in 2019 (see chart).
When people hear Hammond say "fastest wage growth" in a decade, but they know they still feel poorer than a decade ago, do you think they change their mind? Or suspect Hammond is manipulating/taking them for fools?
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Shame on me, given my job, but only since the pandemic have I really started to understand how threadbare the UK's safety net has become. Take statutory sick pay. The UK is now at the very bottom of all OECD countries. Even Trump's America is doing more.
There's a hard-headed reason to raise sick pay: that otherwise some people won't isolate because they can't afford to (the people reliant only on SSP are disproportionately in jobs that can't be done from home.) Skimping is a false economy.
To let unemployment surge under the cover of allowing the economy to adjust naturally to the "new normal" would be intellectually dishonest and economically dangerous. We won't know what jobs are viable post-Covid until we're actually post-Covid. ft.com/content/f3166a…
Meanwhile there aren't enough new jobs for people to "reallocate" into.
Boris Johnson promised us a New Deal in June, so how about taking a leaf from FDR and creating hundreds of thousands of new jobs? The UK economy clearly needs more care workers, nurses, teachers, teaching assistants & others to cope with the future anyway. kingsfund.org.uk/sites/default/…
The gig economy isn't the future of work after all. In fact, it might not have a future at all. ft.com/content/11e2e1…
Uber and Lyft say they'll have to raise prices by 20% to 120% in California if forced to treat drivers as employees. That's an indication of how much money they've been saving by ignoring the laws that apply to everyone else...
...but even with that labour cost compression, they're still loss-making, and the bigger they get the more money they lose. Their business model is to sell services for far less than their actual value. No wonder customers love them
I don't get this line from the OECD's Stefano Scarpetta. Is anyone on furlough in any OECD country actually banned from moving employers/getting a new job?
Are they even disincentivised, really? Depends on the details of each country's furlough scheme, but if you know they writing is on the wall for your job, you're still incentivised to get a new one if you can. People aren't lazy dummies.
And are businesses really disincentivised from making layoffs? Recent spate of retail redundancies in UK suggests not.
1) Since Priti Patel has been given front page space for her evidence-free theory about how "fear of racism" is to blame for Leicester's sweatshops, I thought I'd do a factful thread about some other, more obvious, candidates. Beginning with central govt...
HMRC is responsible for enforcing the minimum wage. It doesn't do enough inspections of high-risk workplaces, penalties are paltry & prosecutions rare. prospectmagazine.co.uk/magazine/a-min…
HMRC is incentivised by govt to identify large numbers of min wage arrears (looks good in press releases). That encourages it to go after big employers for small technical breaches, rather than tiny employers like in Leicester for total disregard of the law.
Leicester's sweatshops have been an open secret for years. Central government knew; local government knew; retailers knew. Now the bill for inaction has come due. ft.com/content/0b26ee…
I wrote a big piece for the FT in 2018 about the garment sector (it's now free to read here ft.com/content/e42732…) and it was already an open secret back then.