The article below was posted by an acquaintance of mine, Tom Winnifrith (http://tomwinnifrith.com/) who writes on financial and political matters as well as owning a pizzeria Clerkenwell, London. The simple question I pose is why he has received no applications from young British people to work at his restaurant? It is in a location that is well connected by public transport and is not a location that is nasty to work in. Working in a pizzeria may not be everybody’s dream job, but it is certainly not a horrible one either. So why the lack of British applicants when so many young people in London are without a job? "When I discuss unemployment and welfare abuse with my father, step mother or any other deluded middle class lefties, it is their insistence that those claiming benefits would rather work, feel shame in claiming benefits and that they maintain only a marginal economic existence on welfare. The evidence, of course, shows that they are wrong. But if you watch the BBC, read only its sister publication (The Guardian) and have no contact with either the working classes or the private sector you can be forgiven for having such a world view. But it is profoundly wrong. The case arose about ten days ago of a couple who picked up total benefits of £18,000 a year and flatly refused to work. Having stated this publicly it seems odd to me that they can still be allowed to claim the "Job Seeker's allowance" since they are patently not seeking any job but I guess that the chances of them losing that (let alone having past payments taken back since they were by their own admission made fraudulently) are nil.I do not actually blame this couple. They are playing the system. And it is the system that needs fixing. The reality is that if this couple both opted to work they would need to generate well over £20,000 of taxed income in order to be as well off as they are on welfare. The two reforms needed are a dramatic increase in the thresh-hold at which anyone pays tax and a dramatic cut in welfare benefits. Surely if the average wage in the UK is £25,000 on which tax and NI is payable, the amount that those who are NOT working should be getting should be far, far lower than that. Somehow, I suspect that the benefits culture is now so ingrained in some quarters that even the seismic shifts I propose would take a while to change the attitudes of some folks. I noted before that when we advertised for a waitress position at The Real man Pizza Company we received ZERO British applicants who could be bothered to make it in for an interview. A good waitress with tips could be making £20,000 per annum. You do not need a degree just a willingness to do a bit of hard work and put in a 35 hour working week. But not one Brit could be arsed. Hence, we have a Polish waitress. And now I am hiring a cook. Guess which language he or she will speak? English as a mother tongue? Forget it. I think I have hired someone who as it happens has experience in the kitchen but wants to improve her skills. Her English is rotten but since most other folks speak perfect Italian at Real Man that is not an issue. She wants to improve her English. If she improves her English and culinary skills we will increase her pay but pro tem (and I almost feel guilty about this) I am paying her 1p an hour above the minimum wage for 32 hours a week. Not only will she take the job but at zero notice she trekked across London on Friday night just for the chance of that job. Her take home will at the start be less than half of the amount paid out in benefits to that couple who elect NOT to work. And you know what? I could hire another dozen or so waiters or cooks on the same rate tomorrow and ALL would be non English as a first language speakers. I do not stand a snowball's chance in hell of getting a native Brit to take on such a job, even if it offers a stepping stone to improving their hourly rate, number of hours, skill set and thus offering a real wage and a career. Our welfare and tax system has become so lopsided that there is now not only an economic but a cultural battle that must be waged. If Britain is to avoid bankruptcy welfare spending must be slashed. And if the UK's private sector is to regain competitiveness wages must be cut. That could actually lead to an increase in disposable income if tax thresholds were increased dramatically. I might sound like a capitalist ogre but what I propose would see reduced Government spending and increased disposable income for those in work. And welfare transformed from a lifestyle choice to a safety net. That some families on benefits "earn" a sum equivalent to the average (pre-tax) national wage is a disgrace and an unaffordable one at that. Benefits should be strictly capped at half the post tax national average wage. Having raised a generation of idlers it is time for some tough love."Nick |
Monday, February 4, 2013
Idle British Youth? What is the truth?
Tuesday, January 29, 2013
Pakistan - Just stop acting like total idiots (Pt.2) and Principled Statements
I thought I would repost by earlier article (http://chairmannick.posterous.com/pakistan-just-stop-acting-likely-total-idiots) partly because I screwed up the title (obvious considering I used the word “idiot” in the title) and also because someone commented it was “controversial”. It struck me that this is a problem that effects our social and political system – it is increasingly controversial to make principled statements. We seem to either pussy-foot around a subject for fear of offending cultural sensitivities or have a mass outcry when something tips over an ill-defined precipice. To carry on my Pakistan theme, there was a perfectly reasonable outcry about the young girl who was shot for standing up to the Taleban view that girls should not be educated, but why did it take that? Why did it take this? Why was the pressure not being put on the Pakistani government about the treatment of girls in general? It seems like “principals” have become increasingly identified with a lack of tolerance, and that should not be the case. Saying that women in Pakistan should have equality with men and that their society and economy will suffer until they do is not being imperialistic, it is not being racist, it is not showing a lack of cultural sensitivity, it is just the right thing to do.
Nick
Pakistan - Just stop acting like total idiots.
28 January 2013 Last updated at 21:17 ET
Viewpoint: Pakistan's economic woes are being overlooked
By Bruce Stokes Pew Research Center
Pakistan is a country beset with political difficulties, but they could be of secondary importance to its economic woes.Investor confidence is waning as Pakistan's economy continues its downward trend
While much attention has been devoted to the dramatic Supreme Court move to order the arrest of Prime Minister Raja Pervez Ashraf on charges of corruption and recent large-scale protests led by populist cleric Tahirul Qadri to demand the resignation of the government ahead of elections due in May, the country's financial difficulties have been overlooked.
Likewise recent deadly militant bombings have also distracted attention, as have skirmishes with India on the Line of Control (LoC) that divides the disputed Kashmir region.
These headline-grabbing events have not only served to obscure the profound economic challenges facing Pakistani society but in many cases have also nurtured and aggravated them.
'Deteriorating economy'
The truth is that the Pakistani people are deeply troubled by the plight of their economy and their own economic prospects.
With the government likely to ask the International Monetary Fund this year for a new aid package, the nation's economic plight may soon become topic number one in the global discussion about Pakistan's future.Optimism about the state of the economy is not high
"Deep seated structural problems and weak macroeconomic policies have continued to sap the [Pakistani] economy's vigour," the IMF's executive board concluded in late November.
Economic growth over the past four years, after adjustment for inflation, averaged 2.9% annually, and is projected to be only 3.2% in 2012-13.
That, says the IMF, is not sufficient to achieve significant improvement in living standards and to absorb the rising labour force.
All this at a time when prices are rising about 11% per year.
Moreover, the government deficit was 8.5% in the last fiscal year and press reports suggest it may miss its budget deficit target this year by a significant amount.
The IMF expects foreign reserves this fiscal year to be half what they were just two years ago, a sign of waning investor confidence and a deteriorating international economic situation.
Hardly surprising then that the Pakistani people are extremely downbeat.
'Personal pain'
Roughly nine out of 10 say the economy is bad, including a majority (64%) who think that it is very bad, according to the 2012 Pew Global Attitudes survey.
Just 9% rate the economy positively.Many Pakistanis will see little discernible improvements in their living standards
There has in fact been a sharp decline in economic ratings in Pakistan since the beginning of the global economic recession.
In 2007, 59% said the economy was doing well; by 2008, this percentage had dropped to 41% and has continued to fall since then.
A plurality (43%) believes the economy will only worsen. For many of them, this pain will be felt personally.
Their assessment of their own personal economic situation is down 19 percentage points since 2008, one of the largest fall-offs among the 15 countries for which the Pew Research Centre has comparable data.
Only 38% say they are better off than their parents.
More than half (57%) say they are worse off than five years ago. And 65% say it will be very difficult for their children to advance economically.
Unemployment is one of the public's major concerns.
Nine out of 10 people say that the lack of jobs is a very big problem, a more important issue to them than concern about corrupt political leaders or unrest in Kashmir.
However because the survey was conducted in the spring of 2012, it could be that concern about Kashmir has risen more recently because of flare-ups in January along the LoC.
While it is true that issues of life and death and war and peace will always trump economic news, the dire nature of Pakistan's economic problems could ultimately feed political and social unrest as the regional and global discussion about Pakistan's future moves to centre stage.
Polling suggests that the people of Pakistan may say this refocusing is long overdue.
Bruce Stokes is the director of global economic attitudes at the Pew Research Centre.
Nick.
Friday, January 18, 2013
Shopping - the future is almost upon us.
The Office for National Statistics (ONS) said retail sales volumes fell 0.1% between November and December, after economists predicted a return to growth of 0.2%. It will fuel fears that the economy contracted at the end of last year.
There were further signs that shoppers shunned the high street with the figures showing that non-store retailing volumes grew 1.6% month on month, and accounted for 10.6% of all retail sales in December.
Household goods, including electrical appliances, furniture, hardware and music and video recordings, showed the sharpest month-on-month drop with a decline of 3% - the biggest fall since January 2010.
But it was a better festive period for department stores, which saw volumes grow 0.4% month on month.
Clothes and shoe shops were the only other sector to fare better in December, posting a rise of 0.7%.
With inflation nearing 3% in December, retailers will have suffered as sales values also declined 0.1% month on month and by 0.3%, excluding fuel.
Today's figures come after a lacklustre performance in November, when sales were flat after a shock 0.8% drop in volumes in October.
Vicky Redwood, chief UK economist at Capital Economics, said the 0.6% overall decline in the final three months of the year was yet more evidence that the economy probably contracted at the end of last year.
Howard Archer, chief European and UK economist at IHS Global, said: "The problem that retailers - and the economy in general - face is that consumers' purchasing power has come under some renewed pressure after seeing appreciable improvement over the first three quarters of 2012.
"Inflation moved back up in late 2012 while earnings growth appeared to falter."
The Office for National Statistics said that retailers' internet sales helped to boost overall sales and provided a much greater proportion of business in December than they were expecting.
This has increased the pressure on the high street, where HMV, Jessops and Blockbuster UK have all gone into administration this month.
Peter Saville, partner at advisory and restructuring firm Zolfo Cooper, said: "Today's figures show a disappointing end to a tough year for many retailers. While 2013 appears to be heading in a similar direction, with the likes of Jessops, HMV and Blockbuster being the first to fall victim, the fact that many, including John Lewis, Dixons and Asos, are still performing well means that all is not lost."
PA
Most of the news headlines and political soundbites will be focussed on this as an indication of continued economic difficulties. Whilst it is undoubtedly true that the economy remains troubled - and will remain troubled while the indigestion of the excesses (at a government, personal, corporate and financial sector level) from the decade to 2008 pass through the system (note to all: more borrowing will not help, it just pushes the problem to someone else down the line while easing the pain of those making decisions now) – I believe that there are a number of rapidly emerging trends that these figures are a harbinger of, and which will have great importance over the longer term. Some are already well documented but others less so:
• An increasing element of the population are no longer agreeing with the “shopping is a leisure pursuit” mantra that commenced in the 80s. They may like to buy things, but the whole process of getting in the car, driving to the town/mall, finding a parking space, paying for parking, trekking round the shops trying to find what you want, eating rubbish at the overpriced food court, paying for parking, paying for fuel for your car etc., etc. is not fun. Instead they log on to Amazon/eBay/whoever and a few days later the goods appear at their door; this trend is gaining rapid momentum.
• People are becoming increasingly less concerned about “ownership” as long as they retain the “ability to enjoy”. Retailers like HMV were all about selling a physical manifestation of something that is innately non-physical, e.g. music, films, computer games. Now that technology has reached the stage where the physical product is no longer needed in order to enjoy the material, why would you want something that takes up space, is less convenient? Much is made of people buying media on iTunes, but I would suggest that streaming services such as Spotify and Netflix are what is really changing the game.
• People are getting used to austerity, and are realising that certain aspects of their life are no worse as a result. Primark is booming because people still want clothes to go out in, but they can get what they want for half the price of M+S, who correspondingly are not booming. Going a step further however, many people are realising that the accumulation of more and more “things” does not make them happier, so they are just consuming less.
• The government debt crisis in many European countries and the austerity measures in the UK has seen many people re-evaluate their views on government provision of various services and benefits, so they are in turn making the logical decision: borrow less, spend less, save more.
• Retail expenditure will increasingly no longer provide easy pickings for landlords and governments/councils through rent, business rates (UK property tax) and parking charges. It is the retailers themselves that are currently going bankrupt, but these failures will have a knock on effect and I would anticipate big right downs by banks on loans secured against retail property and local councils making further budget cuts about a year down the line as this feeds through. This is not just cyclical, it is structural, so it will require a re-evaluation of town centres and their role in a community. I would also expect more than a few “out of town” shopping centres to become ghost towns.
Nick
Wednesday, October 10, 2012
How Long Before It Snaps
Sunday, September 23, 2012
Well That Makes Sense
23 September 2012 Last updated at 13:19 ETLib Dem conference: Pension funds could back mortgages - Clegg
By Justin Parkinson Political reporter, BBC News, in BrightonMany young people are struggling to get on to the housing ladder
Nick Clegg has said parents should be able to use their pension schemes to help their children buy a first home.
Under the Liberal Democrats' plans, a future lump sum pension payout would be used to guarantee the mortgage.
The party says the extra security could result in making homes more attainable, as it could mean young people having to save up for a smaller deposit.
Mr Clegg said the plan could help many "desperate" young people, but the Saga group questioned its viability.
The size of deposits has risen in recent years, as banks have becoming less willing to issue mortgages.
Meanwhile, the number of young people asking for help from families, in the shape of cash sums has increased.
'Not happened before'The Lib Dems say their scheme would help those with pension payouts due, but who lack large savings.
Mr Clegg told BBC One's Andrew Marr Show: " We are going to work out ways in which parents and grandparents who want to help their children and grandchildren buy a property of their own.
"We are going to allow those parents and grandparents to act as a guarantee if you like so their youngsters...can take out a deposit and buy a home. It is a pension from property scheme."
Liberal Democrat sources said around 250,000 people had a pension pot of £40,000, with a lump sum element of around a quarter - £10,000 - which could be used as a guarantee.
They estimate that 5% of those with a suitable lump sum would take advantage of the scheme, meaning 12,500 people could potentially benefit.
The parent's lump sum would be at risk if the child defaulted on the mortgage repayments, but the rest of the pension would be unaffected.
But Ros Altmann, the director general of Saga - which represents the over-50s - said borrowing money against the expectation of a future lump sum was dangerous.
Otto Thoresen, director general of the Association of British Insurers, said: "We would want to look closely at the detail of the 'pension for property' scheme announced today by Nick Clegg.
"Pensions are designed to mature into a decent retirement income, not for other purposes.
"Any scheme which uses pensions as a guarantee must ensure that it does not inadvertently make the saver worse off when they retire."
I’m sorry, but this has to be the stupidest idea of the day. Let us start with the fundamentals. Young people (any many not so young) cannot afford to buy houses because they are overvalued; the UK average house price is £238,638 (http://bbc.in/QxbsMM) while the median salary for a UK full time worker is £26,244 (http://bit.ly/QxbIvl), a multiple of 9.1 times.
It was long considered sensible to lend a maximum of 80% of the value of a house (I’ve checked my memory by referring to “Bankers’ Lending Techniques”, the standard text book for Chartered Institute of Bankers exams in the 1990s) and the normal multiple of income was the higher of 3 times the higher income and 1 times the lower income or 2.5 times the combined income. Based on a couple both earning the median income, this would imply a house valued at £164,025 and a deposit of £32,805. Now I don’t believe that I’m being overly pessimistic to think that incomes are not going to rise significantly anytime soon, so this makes house overvalued by over 30% on this basis.
So, the suggested solution is to encourage people to borrow too much to buy a fundamentally overvalued asset, and in order to protect the lender (who realises that this is a bad loan waiting to happen), we get the borrower’s parents to put their pension on the line instead. Rather than accepting that house prices are overvalued on any sensible measure, the Government continues to suggest policies that tinker at the edges because they fear to tell the millions of Express and Mail readers and all those watchers of property porn TV shows that they have been duped by a classic bubble, (not unlike the buyers of tulip bulbs in 17th century Amsterdam). They fear that they will not be re-elected unless the false prosperity of rising house prices can be delivered, and this is a fear that they share with the Labour Party, despite this fear being based on mass delusion. House price appreciation adds no economic value; building houses creates economic value, improving houses creates economic value, but just sitting back and hoping for them to rise in value adds nothing.
Nick
Why Creativity is the New Economy
The RSA President's Lecture: Why Creativity is the New Economy
10th Sep 2012; 18:30
Listen to the audio(full recording including audience Q&A)
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The 2012 RSA President’s Lecture
We are living in a time of "Great Reset" - when economic crisis provides an opportunity to rethink virtually every aspect of our lives - from how and where we live, to how we work, to how we invest in individuals and infrastructure, to how we shape our cities and regions.Taking a deeper look at the forces reshaping our economy, and giving us a provocative new way to think about why we live as we do - and where we might be headed, Richard Florida shows how these forces, when combined, will spur a fresh era of growth and prosperity, define a new geography of progress, and create surprising opportunities for all of us.
Using lessons from the last ten years to show how Creative Class theory has grown from a prediction to a prescription for an economy in turmoil, Florida argues the need for a new social compact to put us back on the path to economic growth. Florida’s Creative Compact commits to developing the full human potential and creative capabilities of every person, and suggests a new set of institutional supports to ensure a more robust and sustainable social system around the new world of work.
Speaker: Dr Richard Florida, director, the Martin Prosperity Institute and Professor of Business and Creativity at the University of Toronto and NYU; senior editor, The Atlantic and is the author of several influential global best sellers, including the award-winning 'The Rise of the Creative Class'.
Introduced by: HRH The Princess Royal, RSA President.
Chair: Luke Johnson, RSA Chair.
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This is a really superb lecture and discussion on how cities and the creativity they foster can produce a brighter future.