Employment, wages and growth – good news – not so sure

“Following the pattern of recent months, the labour market statistics exhibit a shift towards less secure forms of employment. While the overall employment level continued to rise in the three months to May of this year, the composition of this increase is a source of some concern. The number of full-time employees fell by some 77000, and the number of part-time employees also fell slightly. There was a modest increase in the number of full-time self-employed workers, but the main source of employment growth has been part-time self-employment.

This grew by a massive 104,000 over the quarter. While many jobs of this kind offer workers the flexibility that they might want, this may come at a cost in terms of insecurity. As parts of the traditional engine room struggle in the current economic climate, workers may increasingly be turning to the gig economy.”

https://www.theguardian.com/business/live/2019/jul/16/markets-uk-unemployment-wages-ryanair-boeing-737-max-mark-carney-business-live?CMP=Share_iOSApp_Other

East Devon to have vast Amazon warehouse staffed by ….. well, that depends …..

Many readers will be too young to remember Rast Devon’s plans to develop an ‘inter-modal transport hub’ on the outskirts of Exeter, about which many promised were made and broken. There was even a cursory planning application in 2010:

https://planning.eastdevon.gov.uk/online-applications/applicationDetails.do?activeTab=neighbourComments&keyVal=LB8Z9LGH03P00

Eventually all or part of the site (Owl is none too sure) was bought up by Sainsbury’s who said they would build, well, something. Another promise broken.

Eventually, part of the site was bought by Lidl, who built a massive warehouse.

Now, it seems Amazon is going to build a second massive warehouse, next to the Lidl one:

https://www.midweekherald.co.uk/news/amazon-set-to-take-on-industrial-unit-on-outskirts-of-cranbrook-1-6125408

Many jobs (200 in the article) are promised to the lucky (or unlucky) residents of Cranbrook – which way you look at it depends on what you research about both Amazon’s working conditions and future plans:

https://www.theguardian.com/business/2018/may/31/amazon-accused-of-treating-uk-warehouse-staff-like-robots?CMP=Share_iOSApp_Other

https://www.theguardian.com/technology/2019/may/20/unions-lobby-investors-to-press-amazon-over-uk-working-conditions?CMP=Share_iOSApp_Other

The desire of most of these warehousing companies – including Amazon – is NOT to treat their workers like robots (though it is alleged that some of them do) but to REPLACE them by robots.

Progress it’s called.

“Is it time to end our fixation with GDP and growth?”

“Why are we so fixated on economic growth?

Since the mid-20th century, economic growth has taken on a dominant position in the way practically every country arranges its affairs and priorities.

Growth has become shorthand for increasing living standards. It often means more people in work and more companies in business. Its opposite, recession, normally means bankruptcies and redundancies.

And so growth has become a holy grail for governments seeking re-election.

But some people have benefited more from growth than others, despite global gross domestic product (GDP) growing by more than 5,000% since the 1960s. Inequality has boomed in advanced economies since the 1970s, while the mounting risk of catastrophic global warming raises serious questions about the links between growth and carbon emissions.

Yet our economies have become structurally dependent on growth. Finance ministries and central banks pursue economic expansion as the primary goal, with rising GDP providing higher taxes.

Growth as a metaphor for prosperity has become deeply embedded through language. We like to see our children grow, or our gardens. Growth as a fundamentally human movement is life and progress. But there is another end of the metaphor: that growth can be cancerous. …”

https://www.theguardian.com/news/2019/jun/17/is-time-to-end-our-fixation-with-gdp-and-growth?CMP=Share_iOSApp_Other

Now Tories are not in control Swire decides Cranbrook is a development problem!

Today’s Midweek Herald. SO odd that Hugo has JUST discovered that Cranbrook development is a problem … still TiggerTories involved in planning will be glad to know he is NOW onside! Such a pity he wasn’t so vocal when Tories alone were in charge!

Those optimistic “growth” figures from our LEP look even more unlikely

“Calling an organisation the “UK 2070 Commission” is not without its risks. Who cares what happens that far out?

But that, in a sense, is the point. The commission, set up to investigate Britain’s “marked regional inequalities”, publishes its first report today. And, as its chairman Lord Kerslake puts it: “If you want to understand what happens in economics, you need to look 50 years back and 50 years out.” Indeed, as the commission notes: “The reference to 2070 is an explicit recognition that the timescales for successful city and regional development are often very long, in contrast to the short-termism of political cycles.”

A Brexit-addled government nicely illustrates that — not that it’ll have been any surprise to Lord Kerslake, the ex-head of the home civil service. And in these distracted times, the report is doubly welcome. It kills the myth that inequality is not on the rise and helps to explain Brexit — or at least the disparity between Remainer London and the Brexiteer regions.

The report finds London “de-coupling from the rest of the UK”. And to nobody’s benefit. Research from Sheffield University professor Philip McCann finds the “UK is interregionally more unequal” than 28 of the 30 advanced OECD countries, the exceptions being Ireland and Slovakia.

Productivity in the capital is 50 per cent higher than the rest of the UK. Indeed, similar growth between 1992 and 2015 from cities outside London would have added at least “£120 billion to the national economy”. And, on present trends, half of the UK’s future jobs growth will be in London and the South East, which accounts for only 37 per cent of the population.

The effects show up everywhere. Healthy life expectancy in the UK’s poorest regions is “19 years lower”. The Joseph Rowntree Foundation found in 2016 that dealing with the effects of poverty costs the UK £78 billion a year. And, even then, poor is a relative term. The children’s commissioner for England found that “a child who is poor enough for free school meals in Hackney, one of London’s poorest boroughs, is still three times more likely to go on to university than an equally poor child in Hartlepool”.

No one wins from such imbalances. People and businesses in the North “miss out on the benefits of growth” — forcing more spending on benefits. But those in “overheating” London and the South East find “increasing pressures on living costs and resources”, so reducing “quality of life”. That forces spending on pricey infrastructure, exacerbating the imbalances. Hence Crossrail, a phase-one HS2 skewed to the capital and an environmentally damaging third Heathrow runway.

So, what to do? Well, here the commission suggests a mix of regional devolution and German-style national planning. It points to the eye-popping €1.5 trillion spent post-unification to help to bring east Germany up to speed with the west. For Britain, it proposes an extra £10 billion spend annually for the next 25 years: a fabulous sum equating to 0.5 per cent of GDP. Lord Kerslake says it’s for government to decide whether it would come from borrowings, tax or such things as levies on uplifts in property values.

Yet he reckons “higher regional growth rates would over time offset this cost”. He emphasises, too, that this is just an initial report, seeking feedback. And don’t the divisions over Brexit underline that Britain needs to do something? Waiting until 2070 isn’t an option.”

Source: The Times (pay wall)

Growth – the good, the bad and the ugly …

“Owl asks: Who is “growth” FOR? Developers definitely, privatised company bosses too – but ‘the workers’ – hhmmmm.”

COMMENT

Devon workers rank among the lowest paid in UK. We are an acute example of what is a general national economic malaise.

For decades Britain has had a big productivity gap compared to our rivals; it’s a result of low pay, inadequate training, and endemic short-termism in investment. It is aided by a “flexible” labour market. Why take risks investing in plant and machinery when you can hire and fire staff easily and still make a profit? Unless we break out of this culture we will continue to have a low paid economy, poor productivity and economic growth. A decade on from the banking crisis, wages haven’t reached pre-recession levels. George Osbourne’s austerity continues.

Heart of the South West, our Local Enterprise Partnership, has set wild targets to raise productivity and double growth by 2038; but don’t have too much faith in an organisation so out of touch with the reality of austerity that in 2017 it secretly voted its Chief Executive a 26% rise.

The flipside is that we have high levels of employment. This may have been a benefit during the depths of the recession but not now.

East Devon Conservatives in their local election manifestos claim they are delivering an economy that works for all and will deliver 10,000 new jobs. Doesn’t sound to me as if they are in touch with reality and addressing the fundamental problems either. With low pay, compared with the rest of the UK, the locally employed will always be out-bid for a house by those relocating from more affluent parts. Net inward migration to East Devon, from outside Devon, was 12,400 over the ten years to 2016.

The reality is that we have full employment and an ageing population in which the proportion of those of employment age will only grow at about 0.16% p.a. This results in a need of only around 230 jobs/year, including expected inward migration. For years EDDC Conservatives have been fixated on pushing job targets and using this to justify housing development well beyond what is actually needed. For example, in formulating the “Jobs-led Policy on” strategy for the 2013 Local Plan a target of 950 jobs/year was used to justify building a minimum of 17,100 houses over 18 years. Currently job creation is running at around 260/year. Where does the 10,000 new jobs target come from and who needs the 17,100 houses? It is not difficult to guess who benefits from this policy, but it certainly isn’t a policy that works for all of us.

Have Conservatives finally lost the plot on economic management as well?”