The Economy

[Dave1987]

To continue the discussion, or as @Robertj21a called it “rant”, about the state of the economy from the other thread.

The current economy is clearly broken or the jobs that have been “created” to enable the claims of ultra low unemployment are all low paid, insecure work. I read an article recently from an economist that very neatly explained why wage growth is virtually none existent for most people in this country. Automation is hollowing out the middle class, middle paying jobs and only creating poorly paid insecure work. Now we know Mrs May loves companies that create insecure work as she publicly praised companies that pride themselves on business models that rely on poorly paid, insecure jobs.

 

[najaB]

Automation is hollowing out the middle class, middle paying jobs and only creating poorly paid insecure work.

That started in the 1700s with the Jacquard Loom and won't be stopping any time soon. The fault doesn't lie with automation, it lies with the lack of investment in new industries.

 

[tony_mac]

Don't go giving the credit to the French! Arkwright's mills certainly pre-dated Jacquard.

 

[najaB]

Don't go giving the credit to the French! Arkwright's mills certainly pre-dated Jacquard.

True. Jacquard was just one of a series of inventors, his is just the most famous.

 

[tony_mac]

Is he more famous because of the ideas inspired by his inventions, rather than the inventions themselves? Or perhaps it is just the result of French propaganda, like at Bayeux?

I would argue that being able to make quantities of patterned cloth is very much less important than that of making plain cloth. After all, humans have been making some sort of plain paint for ~100,000 years, but have never got round to producing patterned paint.

 

[najaB]

Is he more famous because of the ideas inspired by his inventions, rather than the inventions themselves?

Largely because of what his ideas led to.

Or perhaps it is just the result of French propaganda, like at Bayeux?

Careful, your bias is showing.

I would argue that being able to make quantities of patterned cloth is very much less important than that of making plain cloth.

You could make that argument but it's really not that important - weaving patterned cloth was a skilled job which was rendered obsolete by technology and that's the same trend that continues today.

 

[tony_mac]

Careful, your bias is showing.

How very dare you!

Obviously, it was tongue-in-cheek, although I have found it quite interesting how the stories of Harold's promise of succession to William is portrayed quite differently in the exhibitions at Battle, Bayeux, and Falaise.
And I suspect, like a few other famous inventors, Jacquard's primary skill was in industrialisation and self-promotion.

weaving patterned cloth was a skilled job

not massively more so than plain cloth, otherwise it wouldn't have been so easily replaced by a machine

 

[najaB]

...not massively more so than plain cloth, otherwise it wouldn't have been so easily replaced by a machine

If only that was true. As an example, I think we'd all agree that welding is a skilled job (inasmuch as it takes dexterity, training and practice to do it well) yet machines have successfully displaced humans from many welding jobs.

 

[radamfi]

Automation is hollowing out the middle class, middle paying jobs and only creating poorly paid insecure work. Now we know Mrs May loves companies that create insecure work as she publicly praised companies that pride themselves on business models that rely on poorly paid, insecure jobs.

Your mention of Mrs May implies that automation is a British thing. Is there a developed country with comparable or better income levels that has stopped automation happening?

 

[tony_mac]

If only that was true. As an example, I think we'd all agree that welding is a skilled job (inasmuch as it takes dexterity, training and practice to do it well) yet machines have successfully displaced humans from many welding jobs.

I was comparing to the machinery available around 1800. In many ways, humans are less skilled now than they were 200 years ago. If you are required to do the same repetitive work for 80 hours a week, from the age of 5, in order to survive then you will inevitably become good at it.

 

[najaB]

I was comparing to the machinery available around 1800

Automated looms weren't significantly more complex than manual, the main innovation was the invention of the stored program and automated control system.

 

[Dave1987]

Your mention of Mrs May implies that automation is a British thing. Is there a developed country with comparable or better income levels that has stopped automation happening?

My biggest annoyance with our current PM (along with her pandering to the right-wing extremists in her party) is her glorification of the likes of Uber. Ubers' business model stands for everything that is wrong in the modern economy. They claim they are not a taxi firm but a "information society service" so they can circumvent all taxi rules and regulations, along with saying their drivers are "self employed contractors", so they don't have to pay the minimum wage or pay sickness or holiday pay. And to think May and a load of other right wing Tory MPs criticised the London Mayor for banning a company like that! Just shows you the economy the Tories in their current guise want. And then we come to companies with management who believe it acceptable to threaten disciplinary action if you are ill. I am and always have been an advocate that work should always pay and that people who work hard should be rewarded with a good quality of life. Just a shame that the current Government deems it acceptable that companies can exploit their workforce so long as they are not on the dole. What did our glorious chancellor say recently? Something along the lines of he views 'jobs are more important than wages', which you could view as 'as long as people aren't on out of work benefits, I'm happy'.

 

[Bletchleyite]

Erm, all taxi drivers are self-employed. That's not the controversial bit. It's just how the profession has always worked, and I think it's generally something drivers don't mind because it gives them the ultimate flexibility to work only when they wish to work.

 

[najaB]

Erm, all taxi drivers are self-employed.

Most. I know someone who is directly employed by the taxi firm and gets paid by the hour.

 

[Dave1987]

Your mention of Mrs May implies that automation is a British thing. Is there a developed country with comparable or better income levels that has stopped automation happening?

It's not about stopping automation from happening. It's how the Government assists the workforce to adapt. The Government may well say that people adapt and up skill but how many people actually can afford to study to up skill? How many can afford the £4k ish for that plumbing course and have money spare to pay for the mortgage/rent, food, kids, bills?

 

[Bletchleyite]

Most. I know someone who is directly employed by the taxi firm and gets paid by the hour.

Must admit that your posting is the first time I have ever heard of that being the case.

 

[Dave1987]

Erm, all taxi drivers are self-employed. That's not the controversial bit. It's just how the profession has always worked, and I think it's generally something drivers don't mind because it gives them the ultimate flexibility to work only when they wish to work.

Really? I know several taxi drivers who are directly employed by a taxi firm who drive company vehicles.

 

[najaB]

Must admit that your posting is the first time I have ever heard of that being the case.

It tends to be the case in companies that do a lot of contract work.

 

[radamfi]

It's not about stopping automation from happening. It's how the Government assists the workforce to adapt. The Government may well say that people adapt and up skill but how many people actually can afford to study to up skill? How many can afford the £4k ish for that plumbing course and have money spare to pay for the mortgage/rent, food, kids, bills?

Plumbing's not a great example given that it is a traditional skill that has actually increased in demand since the huge boom in the use of computers, and one that is accessible to 16 year old school leavers without strong academic qualifications. I know people who have quit software to go into plumbing.

 

[Dave1987]

Plumbing's not a great example given that it is a traditional skill that has actually increased in demand since the huge boom in the use of computers, and one that is accessible to 16 year old school leavers without strong academic qualifications. I know people who have quit software to go into plumbing.

So name an area where someone who has works in say a bank as a clerk can "up skill" when their job eventually disappears?

 

[Bletchleyite]

Dave1987, what is your view on the Universal Basic Income? Would that not provide an alternative means of providing security to people while allowing employers more flexibility to develop as technology does?

 

[radamfi]

So name an area where someone who has works in say a bank as a clerk can "up skill" when their job eventually disappears?

Denmark famously has a system called "flexicurity" where companies have a lot of freedom to "hire and fire", but the government pays for retraining as well as paying generous unemployment benefit. Naturally, they can afford it in Denmark because of the higher taxes, but I can't see Britain going for such a system while unemployment stays at low levels.

 

[Dave1987]

Dave1987, what is your view on the Universal Basic Income? Would that not provide an alternative means of providing security to people while allowing employers more flexibility to develop as technology does?

I have most certainly grown on the idea of Universal Basic Income. I think it is the only sensible way of allowing people to retrain without losing their homes etc. Only problem comes from where the money to pay Universal Basic Income is sourced. I believe a robot tax is the most sensible route. If your company stands to make larger profits by automating people out of job then you pay towards assisting the Government up skilling the person you have laid off. I would also say that the Government should make courses very cheap or free to encourage people to retrain and or up skill.

 

[Dave1987]

Denmark famously has a system called "flexicurity" where companies have a lot of freedom to "hire and fire", but the government pays for retraining as well as paying generous unemployment benefit. Naturally, they can afford it in Denmark because of the higher taxes, but I can't see Britain going for such a system while unemployment stays at low levels.

Sounds like a very good system.

 

[Busaholic]

We keep on hearing from certain commentators (all of whom, coincidentally or not, appear to be Brexiteers) that the record-breaking FT100 Index ( the so-called Footsie) is evidence that our economy is in fine fettle. I've never held stocks and shares, and neither has my wife, but she inherited some Blue Chip shares when her father died and hasn't cashed them in. This was several years ago and so, a few times a year overall, she receives dividends from these companies. The amount she receives has declined in every single case over the last five years, accentuated over the last couple of years so that in some cases it's only a third of what it was. For a couple living on state pensions, it provided a bit of welcome relief but now it hardly buys a takeaway meal!

 

[najaB]

We keep on hearing from certain commentators (all of whom, coincidentally or not, appear to be Brexiteers) that the record-breaking FT100 Index ( the so-called Footsie) is evidence that our economy is in fine fettle

The FT-100 largely trade outside the UK and so aren't a good bellwether of the overall state of the UK economy. A better measure is the FT-250, which has been growing but not at the same rate.

 

[radamfi]

The FT-100 largely trade outside the UK and so aren't a good bellwether of the overall state of the UK economy. A better measure is the FT-250, which has been growing but not at the same rate.

The FTSE100 peaked at just under 7,000 at the end of 1999. It took over 15 years to get to that level again in 2015, and is still under 7,800. The FTSE250 on the other hand has tripled from about 6,500 to over 20,000 in that time.

 

[najaB]

The FTSE100 peaked at just under 7,000 at the end of 1999. It took over 15 years to get to that level again in 2015, and is still under 7,800. The FTSE250 on the other hand has tripled from about 6,500 to over 20,000 in that time.

The impact of the Brexit vote was much greater on the FTSE 250 than on the 100 and any impact of Brexit will be felt much more acutely.

 

[radamfi]

We keep on hearing from certain commentators (all of whom, coincidentally or not, appear to be Brexiteers) that the record-breaking FT100 Index ( the so-called Footsie) is evidence that our economy is in fine fettle. I've never held stocks and shares, and neither has my wife, but she inherited some Blue Chip shares when her father died and hasn't cashed them in. This was several years ago and so, a few times a year overall, she receives dividends from these companies. The amount she receives has declined in every single case over the last five years, accentuated over the last couple of years so that in some cases it's only a third of what it was. For a couple living on state pensions, it provided a bit of welcome relief but now it hardly buys a takeaway meal!

Sounds like she was unlucky, as across the market as a whole, dividends have been quite generous in recent years, which has partly compensated for the poor capital growth over the last 20 years. The average yield in the FTSE 100 is now over 4%.

https://www.fool.co.uk/investing/2017/09/30/the-ftse-100-will-yield-a-juicy-4-4-next-year/

Having said that, some companies don't pay good dividends on principle and prefer to plough profits back into the company.

 

[fowler9]

Erm, all taxi drivers are self-employed. That's not the controversial bit. It's just how the profession has always worked, and I think it's generally something drivers don't mind because it gives them the ultimate flexibility to work only when they wish to work.

It doesn't quite work like that for all taxi drivers. Uber are nothing like Black Cabs for example.