Expensive cities will eat themselves...

Here's a chunk from a review of the US cities creating the most high-wage jobs - looking at at "which metropolitan areas are gaining the most professional and business services jobs and the trends that are driving some to pull ahead while others fade":

Looking at the 70 largest labor markets in the country, the clear winners are affordable, business-friendly locales – and their momentum is growing. These span an array of regions, from the Midwest heartland to the Deep South, Texas and the Intermountain West.

Our number one metro area for professional and business service jobs, Nashville, Tenn., epitomizes many of the characteristics that drive high-end employment today. Since 2011, Nashville’s job count in professional and business services has expanded a remarkable 42.6% to 160,300, easily the highest growth rate of any major metropolitan area. Management and technical consulting, architecture and related services have led this growth.

The flip side of this is that the big coastal economies of the US are growing more slowly, people are 'cycling out' by returning to their roots from adventures in the big city economies. And the driver of this is living costs and primarily housing. Just watch this happen to London (and get blamed on Brexit).

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I know it sounds good but will it work? Thoughts on big rises to minimum wages.

Be careful what you wish for - or so they say:

The study, commissioned by the city government of Seattle and published by the National Bureau of Economic Research, found that Seattle’s law incrementally raising its minimum wage — to $13 an hour last year, en route to $15 — resulted in low-wage workers’ earning less money rather than more. This surprised many in Seattle, who had been assured by all the best economists, including Paul Krugman, that such a thing would not come to pass.

The debate about minimum wages is a really important one. And, like all such debates, one that is dominated by righteous assertion - 'how can you not support people being paid a basic minimum, they have to eat' - rather than through considered analysis. It is probably time to take the pain and ask again whether minimum wages work.

The theory (at least as I understand it) tells us that, under all but the rarest of circumstances, if you raise the price of something the demand for that something will decline. All we need to examine is the magnitude of this effect - how quickly or slowly that demand falls as the price rises. It is stretching credulity to breaking point if we suggest that these effects do not apply when the price is the price of an hour's labour. So if we mandate a higher price for certain types of labour the result will be less demand for that labour either through the work concerned being forgone, reduced amounts of the work or else through automation (or, in extremis, through the business that used the labour in question ceasing to exist).

You all know this of course but how come we are all so keen on raising minimum wages (for good and noble reasons about people having a 'living wage' or whatever)? Partly this is because there have been a lot of studies suggesting that minimum wage effects are, at worst, small. The classic - if that's the word - in this genre is a study of fast food restaurants in New Jersey following a minimum wage hike:

Our empirical findings challenge the prediction that a rise in the minimum reduces employment. Relative to stores in Pennsylvania, fast food restaurants in New Jersey increased employment by 13 percent. We also compare employment growth at stores in New Jersey that were initially paying high wages (and were unaffected by the new law) to employment changes at lower-wage stores. Stores that were unaffected by the minimum wage had the same employment growth as stores in Pennsylvania, while stores that had to increase their wages increased their employment.

So much for supply and demand theory! Minimum wages rises increase employment! The problem is that things don't change quickly and reduced employment is built into business plans rather than implemented immediately - employment is sticky (partly because most business managers and especially small businesses really don't like laying folk off).

But there is a middle ground:

Thus, allowing for the possibility of larger job loss effects, based on other studies, and possible job losses among older low-skilled adults, a reasonable estimate based on the evidence is that current minimum wages have directly reduced the number of jobs nationally by about 100,000 to 200,000, relative to the period just before the Great Recession. This is a small drop in aggregate employment that should be weighed against increased earnings for still-employed workers because of higher minimum wages. Moreover, weighing employment losses against wage gains raises the broader question of how the minimum wage affects income inequality and poverty.

What's being suggested here is that in a market like the USA that generates lots of work all that increases in minimum wages do is anticipate rising wages - it's not that there's been a reduction in the numbers of jobs (and it doesn't really matter whether this is 100,000 or 1,000,000) but rather the impact on overall employment. If raising minimum wages doesn't raise unemployment this can only be because the rate at which the economy is generating new demand for labour is greater than or equal to the reduced demand for labour consequential on a higher minimum wage. And in a recession the wage floor might mean a more rapid shedding of labour.

In the UK we have seen surprising labour market resilience - employment has risen despite relatively slow growth and perhaps because of stagnating levels of productivity. A lot of these jobs have been minimum wage jobs but so far the effects of a rising minimum wage (the cutely tagged 'National Living Wage') haven't been seen in overall levels of employment - indeed quite the contrary as record employment and record immigration tell us.



UK wage distribution 2016. Source:ONS

This graph shows the effect of gradual increases in minimum wages. The question is whether the current approach of gradually increasing the minimum wage will continue to protect wage levels for low paid workers without the negative effect of reducing levels of employment for those low paid workers. A minimum wage is no use at all if its consequence is merely more unemployment or fewer hours of work for those low paid workers.

This for me is the reason why the Seattle findings are so important. It's not that we shouldn't consider minimum wages but that the impact of a massive rise in minimum wage is simply to increase unemployment and income among the lower paid. In Seattle, by 2021 the new minimum wage will increase wage costs for employers of minimum wage labour by 60%. It seems to me that the City got itself ahead of its labour market - here are the key findings from the University of Washington study that caused all the fuss (bear in mind that the study found the usual very small effect from the first minimum wage hike in 2015):





It does seem that Seattle has discovered that demand curves slope downwards and we should take lessons from this unsurprising revelation. The best way to improve wages for the least well paid isn't to require that employers pay them more - 18% more in the case of Seattle's 2016 minimum wage rise - but for economic growth to increase demand for labour.

For the UK our ever more surprising ability to create new employment masks these minimum wage effects:

...retail executives concede that sharp increases in the minimum wage have lent urgency to their efforts to use workers more efficiently, by investing in technology that makes many low-skilled jobs obsolete. “On a personal level, we all want to pay our workers more,” said a top executive at one large retailer that has recently announced redundancies. “But there’s going to be unintended consequences from what the government is doing. Automation that used to be too expensive is now cheaper than the people it can replace.”

The question is really how much longer can our economy absorb the workers shed as firms reduce labour levels and introduce automation? So long as the workers leaving Sainsbury or John Lewis can get a job elsewhere with relative ease the rising National Living Wage won't be an issue. But when that rising wage results in job losses the economy can't fill and sees reducing hours worked it becomes counterproductive. Labour's policy of an across the board £10 an hour minimum wage is great politics but such a huge increase in wage bills results in the sort of system shock seen in Seattle. And the people who would feel this shock will be the very low paid workers the policy is designed to help.


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A story of jobs (and why immigration is important)

We went to Harrogate yesterday afternoon. The sun was shining, it's a nice drive and we like the town. We'd nothing planned beyond a mooch followed by some food and drink. So this is what we did - window shopping (plus some actual impulse purchasing of a funky lamp that clamps onto a shelf) and then an Italian.

Harrogate has been undergoing what I'm sure the Council calls regeneration. At the top of the town centre by the railway there's a new Everyman cinema (interestingly about 100 yards from the existing Odeon) and, as happens these days, a collection of mid-market chain restaurants - CAU (who sell lumps of meat Argentinian-style), Byron Burger, Pizza Express, an Italian I forget the name of and a similarly unmemorable chain bistro. The cinema was having it's invitation only pre-opening shindig - the full opening is on Friday.

We'd originally planned to go to the Yorkshire Meatball Company for its advertised craft ales and artisan meatballs - what's not to like! But on arrival at said restaurant there's a big sign in the window (well actually quite a small sign) saying it's closed for September because the arrival of all these new chain restaurants has led to a staff shortage. Here's a little more from the Yorkshire Meatball Company's website:

Unfortunately, coinciding with the development of our retail products, the huge influx of chain restaurants into Harrogate – most notably those within the new Everyman Cinema development – has not gone un-noticed, as brands more commonly found in larger cities and retail parks now focus on regional expansion. Whilst we always welcome healthy competition, the recent openings have brought with them an unprecedented demand for hospitality staff, particularly kitchen staff, at a time when there is already a known national shortage of skilled chefs. This presents an incredibly challenging recruitment environment for small independents like us. Unfortunately, as a result we’ve had to say a sad goodbye to some; losing a number of our key staff in a relatively short period.

This piqued our interest and, as we continued our wandering around town we began to notice, in window after window, signs saying that there were jobs available. It was pretty clear that, right now, Harrogate is suffering a shortage of retail, waiting and cooking staff. And it struck me that, for all of Harrogate's attractions, it's an expensive place to live if all you've got is the sort of wage you'll get for most of these jobs. In other places ready access by public transport makes it relatively easy to travel a little distance but Harrogate lacks the public transport links that would make it possible to commute. Plus the bus company isn't going to put on a bus just so some workers can travel from Keighley or Harrogate for a job in a restaurant.

Now I'm sure that the situation in Harrogate will settle down, that I'll get my meatballs and craft beer, and most (if not all) of the chain restaurants will thrive on the back of that vibrant cinema crowd. But this situation rather reminds me of Cullingworth's chicken slaughterhouse (the food has to come from somewhere) and its workers.

When we first moved to Cullingworth in 1989, the chicken factory no longer employed many people from the village or indeed from surrounding communities. This was simply because most folk had better paying and less gory employment so didn't need work killing spent hens. So the company imported workers in a minibus - it used to stop just down from our house. These workers came from Doncaster recruited courtesy of an agency there who were willing to sign up the workers and arrange their transport to and from Cullingworth.

Some while later, when I next encountered the workforce of the factory it came as a result of a visit to a house on Lees Moor, about a mile from the village, who had a problem with an overloading and polluting septic tank. This tank served two houses, that of the couple who'd contacted me and another which was rented out. It was the tenants who had (inadvertently I hasten to add) caused the problem with the septic tank. These tenants were eight or ten Romanian women who were employed to kill those spent hens at the chicken slaughterhouse.

And what is the first thing ten women who've been killing chickens for eight hours do when they get home? Have a shower - a long and thorough shower. The septic tank was designed for the regular sort of use from one farm family and simply couldn't take the strain. I can't remember the solution we came up with to resolve the problem but all this tells us that the factory was no longer ferrying workers to and from Doncaster but was, instead, putting up workers from Eastern Europe in rented property nearby. Today, things have moved on with the (still mostly East European) workforce now coming in to work by car and bus from Bradford or Keighley.

It may indeed be the case that Harrogate's hospitality and retail staff shortage will disappear - or at least get under control allowing everywhere to open - but the story of the Yorkshire Meatball Company and the job vacancy signs in shop windows suggests that, as the UK's job market continues to tighten, it will become more and more of a problem. In one respect this will be good news for staff as it will tend to push up wages but there's obviously a limit to that as those costs end up on the price of food thereby risking fewer customers.

Even in Bradford, which may be a fabulous place but isn't a tourism mecca, local business people tell me there's a problem with recruiting good hospitality staff. This isn't because folk are sitting around doing nothing but rather because the sort of people who might in times past have chosen a hospitality job are now getting jobs with 9-5 hours in sales, marketing and financial services. And, just as is the case with killing chickens (and for that matter building houses, cleaning toilets and picking fruit), without immigrant labour these businesses struggle to fill the jobs they produce.

It is for this reason that the sort of UKIP (and sadly Tory right) policy of 'points-based immigration' is a daft idea. Here's Raedwald:

Agriculture and horticulture is utterly dependent on EU migrant labour to get strawberries into our dessert bowls and vegetables to the freezer plant. There have been harvest labour schemes long pre-dating freedom of movement from the new accession states.

None of these would get in under a points system. Nor would young European Erasmus students spending a year in 'intern' type jobs in our hotels and restaurants. Nor would the French Mauritian delivery driver who delivers French goods in London from 'French Click' with care, passion and pleasure.

To agriculture and horticulture we can add hospitality, retail, construction and facilities management - without immigration these things just don't happen. With a points-based system based on "high level skills" these unskilled workers who are essential to our economy simply aren't available. This has nothing to do with whether we're in the EU or even with what that malign body calls free movement. Rather it's about our economy and tells us that if someone arrives in Harrogate or Cullingworth with a job to go to, it doesn't matter whether they're from Keighley or Karachi, Basingstoke or Bucharest they should be allowed to go and do that job.

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Banking, tobacco and textiles - why no outcry when those jobs went?

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I was in Bingley this morning to catch a train. Nothing unusual here but it got me to thinking about steel and jobs and such. Mostly because slap bang in the middle of Bingley is the site of the former Bradford & Bingley Building Society HQ. The thousand or so jobs that went at the two B&BBS locations in Bingley are a reminder that the fallout from the financial crisis was real for many people - we're told the banks were bailed out but that probably doesn't wash much with all those folk who lost their jobs round where I live.

Indeed as I meander round my ward, I come across the evidence of past jobs - I live in a converted mill that once employed hundreds of people and was still a working mill (of sorts) up to the 1980s. The Pennine Fibres mill in Denholme is gone and is now transforming into another estate of family homes and the same goes for the woodyards, the circlips companies and the machining workshops. Thousands of jobs have gone from Bingley Rural since the 1970s - some because there isn't call for what they make, others because someone somewhere else in the world can make it cheaper and others because, like Bradford & Bingley, the folk in charge of the business crashed it into the financial wall.

I can look elsewhere in the country and see jobs destroyed by the malice of government - the cigarette plants in Nottingham, Bristol and Northern Ireland, the businesses that made cigarette vending machines in the Black Country, and the jobs making packaging in Bradford. Thousands of men and women, in the parlance over the press, thrown on the scrap heap by the actual decision of government.

So what is so special about steel. Why are we treating the closure of a couple of steel plants as some sort of existential threat, as a sort of emasculation of the nation? How come those banking jobs in Bingley, the livelihoods of women making cigarettes in Ballymena and the work of merchandisers filling up vending machines across the country - how come they don't elicit the same outcry?

Of course we're bothered about those steel jobs. It's a terrible thing to see a great industry - part of the fabric of places like Redcar and Port Talbot - struggling like this. But do people think that the building society wasn't important to the fabric of Bingley? That it's death didn't cause huge damage to the town and its surroundings? Yet Gordon Brown didn't chair emergency cabinet meetings to consider support for Bingley. No minister's foreign trip was cut short so he could be grilled about the closure and no special fund was set up to regenerate the town.

So forgive me when I'm less than ecstatic at the calls for protectionist barriers, illegal government procurement rules, state subsidy and nationalisation. Literally millions of jobs have gone from our economy over the past few decades yet we have the highest rate of employment ever. And granting special privileges to one particular industry for reasons of either sympathy or economic nationalism is both wrong and an insult to those millions of workers who lost their jobs in businesses neither the Labour Party nor the press gave a fig for.

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So cut the basic rate of income tax?

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Tax cuts stimulate employment best when they benefit the lowest paid most. Or rather as is pointed out here, the bottom 90% of taxpayers. So while I absolutely support taking the poorest out of tax altogether - indeed I would support an ambition that no-one below median income should pay income tax - a basic rate cut would be a real boost for growth and jobs;

Variation in the income distribution across U.S. states and federal tax changes generate variation in regional tax shocks that I exploit to test for heterogeneous effects. I find that the positive relationship between tax cuts and employment growth is largely driven by tax cuts for lower-income groups and that the effect of tax cuts for the top 10% on employment growth is small.

But then we knew tax cuts were a good thing didn't we?

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So let's not talk about the 'jobs miracle', let's talk about welfare instead!

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The latest figures for employment, unemployment and jobs came out yesterday and it's fair to say that they are, without question, good figures:

UK unemployment has fallen to its lowest rate since July 2008, official figures have shown.

The number of jobless people dropped by 76,000 to 1.84 million in the three months to February, the Office for National Statistics said on Friday.

That means the unemployment rate has fallen to 5.6%, in line with forecasts.

Average weekly earnings in the three months to February, excluding bonuses, rose by 1.8% compared with the same period a year earlier.

Growth was slightly lower than the rate in January. When bonuses are included, weekly earnings rose by 1.7%.

The number of people claiming Jobseeker's Allowance in March fell by 20,700 to 772,400, the ONS said.

Add to this record numbers of job vacancies and we should be looking forward to continuing growth in employment plus, as vacancies begin to outstrip the number unemployed, rising real wages.

The New Statesman, which I guess we can describe as part of the 'intelligent left', published an article (by Jonathan Portes) with this headline:

About that Conservative jobs miracle... 

Now you'd expect therefore that the article would discuss - perhaps with some criticism or different analysis - those figures I quote above. But in a long article packed with data not one word address that 'Conservative jobs miracle'. Instead we get Portes' usual, tightly argued position on welfare reform. Or in this case benefits paid to people who are sick and disabled. And as I read it, the jobs miracle (in Portes' view) isn't down to people coming off incapacity benefit - he doesn't provide any indication as to what might have contributed and seems more interested in the budget deficit rather than why so many people have found work.

For me the positioning of an article about welfare as an article about jobs reveals the extent to which the intelligent left is prepared to ignore good economic news and to poke about trying to find something wrong with what's happening out there. I find this all a bit sad. But then the intelligent left has always been a terribly 'glass half empty' bunch.

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Policies that work - the benefits cap...

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We were promised destitution and other horrors but...

Between April 2013 and August 2014, 51,200 households had their housing benefit capped, according to a Department for Work and Pensions statistical release yesterday. This number had dropped to 27,200 households by August 2014. Forty per cent of those no longer subject to the cap – 9,600 households – are exempt with an open Working Tax Credit.

Unpiggle the language and this is telling us that we capped the benefits and, lo, the people having that cap imposed went and got jobs. Well I never!

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...you're never too old (unless you want a new career).

How some employers see the 55-year old job applicant

James Delingpole has been indulging in some middle-aged angst:

...I wanted to muse a little on the career choices I’ve made and on the regrets that now haunt me as a result. Fellow nearly-fiftysomethings — and post-fiftysomethings — will I’m sure understand where I’m coming from. Time is running out and the options are closing by the day.

The funny thing is that there is no obvious reason why James' options - playing high-level sport and ballet dancing aside - need to be closed off. James still has all his faculties and is likely to enjoy his role as 'king of right wing snark' for another 25 years allowing that accident or ill-fate doesn't intervene. Yet our culture tells James that the evenings are closing in and that soon he will need to think about stairlifts, comfortable footwear and elasticated slacks.

The real issue here is one about careers and whether it is possible for someone to change horses once they've passed some arbitrary milestone - 45, 50, 55. It seems that the possibility of doing so diminishes - not because people do not have the capacity, capability or drive to change career post-50 but because society sees this as a slightly odd thing to do. This isn't the same as someone deciding to take redundancy from their mid-ranking professional or managerial position and set up a 'lifestyle busines' carving walking sticks or giving talks about Cretan ruins to cruise passengers. Rather it's about someone deciding to change career - so, in my case, I might opt to retrain as a town planner and call an end to the joys of politics or marketing.

The problems are two-fold - firstly employers don't believe you when you start again at the bottom of the heap and secondly a manager won't want to take on somebody older then they are (this is a visceral remnant of the respect for elders that we were brought up to believe in). That manager rationalises his ageism by saying to himself that the older person wouldn't fit in - "everyone in the office is under 35" our  manager would mumble to himself, "it just wouldn't work". Or else - and worse - the employer might explain away his bias by saying that the older person wouldn't be up-to-speed with modern technology. In my world of marketing all that 'digital' stuff needs young people doesn't it? What would some balding, old-time planner know about 'social media' or 'SEO'?

There is no earthly reason why a twenty-three year old should better understand digital media strategy (or anything else for that matter) than a fifty-three year old. Yet that is precisely what people making employment decisions will do, just as they will dismiss a thirty year career in another field as somehow irrelevant to the appointment decision. Essentially because they don't want to appoint an 'old' person.

We have to stop doing this for some very important reasons. Firstly the government now expects us to work to 67 and it's only a matter of time before we are expected to work to 70. Moreover this expectation is compounded by the pillage visited on private pensions by the greed and selfishness of governments. And secondly, there will be fewer young people available to fill all those jobs (and perhaps - at least in my field of marketing - an appreciation that, if the market consists mostly of older people it might be an idea to employ some older people who might understand better how that market works).

James Delingpole can rely on people like me punching the air with delight at his right-wing polemic but for others there's the prospect that the world doesn't want what they do any more. And if those people want to change and become town planners, marketing folk or digital advertising sales people then perhaps employers need to consider how to make it work. Not just because of that classic piece of lunatic New Labour legislation, the Equalities Act (which makes age a protected characteristic) but because those employers are missing out on some excellent people because they'd rather have a bunch of 25 year old recent graduates to boss about than a more questioning set of folk with twenty or thirty years of fascinating experience to bring to the job at hand.

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Bratislava, or why people would rather do low paid jobs in the UK

Bratislava Castle and Cathedral Church from the Danube

Chances are that you've not been to Bratislava. I mean why would you unless you had a hankering for the old capital of Royal Hungary, to pop into the places built by those Hungarian nobles as they whiled away the centuries somewhere other than Hungary (the Turks were running Budapest back then I gather).

Hold on. Isn't there an oddity here? Hungary? But isn't Bratislava capital of that ultra-new state of Slovakia? How did that happen then if it was so much a centre for the old Austro-Hungarian lot rather than the northern Slavs? What happened was part of the bizarre combination of lottery, plebiscite and bad decision-making that created boundaries after the first world war (when the Austro-Hungarian Empire ceased to exist) and then jiggled them about after the second world war. Meaning that today Pressburg, in whose church Emperors were crowned, is now called Bratislava and is the capital of Slovakia.

We paid a short visit to Bratislava so this is as much an impression as a considered analysis of politics of economics in the Slovakian capital city. And we were tourists, doing tourist things like visiting the cathedral and sitting in pavement cafes watching the world go by.

A few things will strike a visitor to Bratislava: every second building seems to be either an embassy or else to have the word 'narodny' prominently in its title - 'narodny' means 'national' in Slovak. Where there is a public square it will have a splendid piece of recent statuary celebrating a nation hero: here's the one for Ludovit Stur, leader of the 19th century Slovak National Revival:

 

All this sounds pretty splendid but Bratislava has a problem. Despite the capital status, all those embassies and national institutions, the city feels like a place with little purpose. In truth a poor place with little purpose. The streets are quiet - we were there at 9am on a work day and it was less busy than Harrogate on a Sunday - and for every grand building there is a tatty row covered with graffiti, a broken door or a little shop selling not much more than a few boxes of sad looking fruit and veg.

This is the capital city of a country with five-and-a-half million people. It ought to be buzzing, filled with people making, creating, entertaining and building a nation. It's not. And I can understand why a young, educated Slovak (the sort who are guiding tourists round the city, telling them just how awful communism was and how it left them so badly off) would decide that nursing a clapped out car to Dortmund, Rotterdam or Birmingham has more appeal that trying to make a good life in their homeland.

Which is why there are multilingual graduates working in English bars and cleaning Welsh hotels. And why the killing of chickens in Cullingworth is exclusively done by emigres from places like Bratislava. And why should I blame them for doing that? Or prevent them from having that opportunity to do a crap, low-paid job in Britain?

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Good jobs and bad jobs...

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We're familiar with the 'burger flipper' argument. Jobs at places like McDonalds of KFC are 'bad' jobs - low skilled and low paid. Which, when you think about it, is rather sticking two fingers up at the kids who go and do these jobs.

But no, we must have high skilled, high paid jobs - you know the ones don't you? The ones that our education system doesn't meet demand for (which, of course, is why the jobs are higher paid). But even were the schools to miraculously transform overnight, there'd still be jobs serving fried chicken and hamburgers to people who want to eat said chicken and burgers.

This is all an example of the way in which the British have managed to turn the idea of giving service into the single most demeaning and menial of tasks. We've got this rather pathetic attachment to grand jobs in manufacturing and extractive industries - steelworkers, miners, machine operators. These are proper jobs in a way that waiting on in a diner or serving the cue at Burger King aren't.

Even in service industry, we champion the jobs in the back room - the bankers, the accountants, the code-writers - rather than front of house. The folk who serve you in the bank, the people on the other end of the phone at the insurance company and the receptionists everywhere - these are the low valued, poorly paid jobs.

It seems to me that we'd be a whole lot nicer place if this changed, if the idea of service was valued a little more highly. And, moreover, we'd have better businesses as a result.

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Manufacturing - no longer the place for cheap labour...

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And this is a good thing because cheap labour isn't just cheap it's dirty, unsafe and unpleasant - replacing the drudge with robots is a good thing:

Some might say that’s terrible: what are we going to do when there’s no more cheap labour? I look at it the other way around. When there’s no more cheap labour then there’re no more poor people, are there? For by definition people who are getting good wages just aren’t poor. So once we’ve run out of places where we can chase that cheap labour then we’ve actually solved one of humanity’s longest running problems. How in heck do we cure poverty? And we’ll have done it by the only logically sound method known: making everyone rich. Hurrah!

There will still be manufacturing jobs but they will look rather different - as I noted a while back:

I visited a manufacturer the other day. Part of a multi-national business in the electronics industry. Big plant in Chadderton employing about 360 people.

Of those 360 people, 54 have PhDs and over 70% have a degree of some sort.

Rather makes the point that, even if we have a boom in manufacturing, it is't going to provide jobs for 16 year olds who have scraped five GCSEs.

Manufacturing soon becomes a high skill, high value added business filled with society's elite - all graduates, many with higher degrees and all creating, thinking and developing the business.

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I'm not so sure Krugman is right here...

Not about the end of growth but about robots - mechanisation, if you will:

Smart machines may make higher GDP possible, but also reduce the demand for people — including smart people. So we could be looking at a society that grows ever richer, but in which all the gains in wealth accrue to whoever owns the robots.

Now I know Paul Krugman is a science fiction fan, so in the interests of exploring his speculation maybe he should read the Culture series from Iain M Banks. In the meantime:

A study commissioned by the tech advocacy group TechNet found that the “app economy” — including Apple, Facebook, Google’s Android and other app platforms — was responsible, directly and indirectly, for 466,000 jobs.

That's half a million jobs we'd not even thought about five years ago. A real value-adding jobs too - jobs created entirely by new technology.

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A thought on manufacturing...

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I visited a manufacturer the other day. Part of a multi-national business in the electronics industry. Big plant in Chadderton employing about 360 people.

Of those 360 people, 54 have PhDs and over 70% have a degree of some sort.

Rather makes the point that, even if we have a boom in manufacturing, it is't going to provide jobs for 16 year olds who have scraped five GCSEs.


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More livelihoods that plain packs will destroy...

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Corner shops are going to close and people who work in corner shops are going to lose their jobs if the nannying fussbuckets get their way:

Almost one in 12 independent corner shops could be at risk of closure or reducing staff due to tobacco smuggling and cross-border shopping, a survey revealed today.

The findings, published by the Tobacco Retailers Alliance (TRA), show that almost eight per cent of shop owners were considering ceasing trading directly due to a rise in the sale of illegal and counterfeit cigarettes.

A further 26 per cent of the businesses questioned in Yorkshire and Humber admitted they were contemplating cutting staff as a result of a decline in tobacco sales.

But I guess the New Puritans and prohibitionists don't care. They will crow and cheer at the demise of these jobs and the closure of these businesses. Another nail in the coffin of community banged in by the righteous and their desire to pass judgement on our personal choices.

It won't stop the smoking of course. That'll carry on, supplied by the man with a van. Unlicensed, unregulated, unchecked and uncaring. He's there already - nearly half of the top twenty "tax dodgers" named by the Mirror are wanted for dodging duty - millions of pounds of duty - on cigarettes. And just as we won't be winning the war on drugs any time soon, we won't be stopping the man with the van selling smuggled fags and illicit booze. It's only a matter of time before he's selling burgers I guess!

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It's for the kids...

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“This is not about curbing the freedoms of existing adult smokers; it’s about giving kids one less reason to start smoking in the first place.” 

...the ones whose Dad's are going to lose their jobs no doubt:


...or the ones shot and killed in the turf wars of smugglers and counterfeiters

If you get a chance before Friday tell the government that the police, business and the unions oppose plain packs, that there's no evidence at all to support their introduction and that the idea won't stop one single "kid" from taking up smoking.

The consultation is here.

...

The police, the unions, business and the public think it daft. Can we ditch the idea of plain packs for fags now?

It seems that everyone bar the paid lackeys of The Churchof Public Health is against the idea of plain packaging for cigarettes.

The police:

Health Secretary Andrew ­Lansley’s plans to force ­cigarettes to be sold in plain packets have been blasted by police.

Nearly nine out of 10 officers – 86 per cent – believe the move will lead to a rise in smuggling and sales of fake ­cigarettes, a poll claimed yesterday.

The findings also show that six out of 10 believe that the clampdown would drive teenagers towards illegal ­cigarette suppliers where they could buy counterfeit branded packs.

And senior officers make clear the problem – 24 of them wrote to the Times about it:

Sir, Plain packaging risks fuelling tobacco smuggling. We are concerned at the possibility of the Government introducing standardised packaging of tobacco products. We do not wish to get involved in the public health debate. However, our concern is very much on the impact that it could have on crime and in particular on serious organised criminals who are the target of the major law enforcement agencies.

Tobacco products are relatively small, high-value items and are smuggled in extremely large quantities, depriving the Treasury of billions of pounds in tax revenues. Those who smuggle tobacco products are often involved in other forms of serious criminality. The introduction of standardised packaging would make it even easier for criminals to copy and sell these products to the unsuspecting public, including children. This would place further pressure on already stretched law enforcement agencies and at a time when the Government needs to secure much needed tax revenues.

To my thinking that ought to be enough but we can add trade union opposition – they’re worried about jobs (like I am since 1000 of those jobs are in Bradford):

The FDT National Committee has serious concerns that these measures are ill-thought through and not evidence based, and in some parts of our sector, particularly tobacco and alcohol, could simply make it much easier for criminals to sell (unregulated and untaxed) counterfeit and smuggled goods and thus have flow-on affects such as a significant impact on jobs in our sector.

And the packaging industry agrees:

A considerable amount of the business of both Weidenhammer and Chesapeake involves the printing of cigarette cartons for the export trade. At Wiedenhammer’s Bradford site a large proportion of the work involves the production of drums for loose tobacco and, if this business disappeared, then it is estimated that turnover would decrease by at least a third. The threat to the business is, therefore, very real and...there would be major implications for investment, jobs and the tobacco packaging supply chain across the UK. 

So the police think it will increase crime and make it easier for children to get hold of tobacco; the unions and industry think it will result in job losses and the public? Well they think it’s a daft idea too:

72% of those questioned in Populus poll today say that #plainpacks will cause people to turn to the black market http://ow.ly/cqEgr

So there you have it folks – the police, the unions, business and the public all think plain packaging for cigarettes is a daft and counterproductive idea. Can we dump the idea now?

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More on plain packaging and the threat to jobs in Bradford

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As Bradford is stunned by the loss of nearly 500 jobs following Thomas Cook's decision to close their office in the City, the nannying fussbuckets are eagerly promoting proposals that threaten hundreds more jobs in the City - plain packaging for cigarettes. Here's a quote from a briefing note prepared by Bradford Council officers:

A considerable amount of the business of both Weidenhammer and Chesapeake involves the printing of cigarette cartons for the export trade. At Wiedenhammer’s Bradford site a large proportion of the work involves the production of drums for loose tobacco and, if this business disappeared, then it is estimated that turnover would decrease by at least a third. The threat to the business is, therefore, very real and...there would be major implications for investment, jobs and the tobacco packaging supply chain across the UK. 

 The briefing note continues by noting the problems of counterfeiting:

...unbranded packets and containers are far easier to counterfeit, using a simple, four-colour machine, and that, if the UK government decided to implement the measure, then it would be ‘a gift for organized criminal gangs’. The growth of illicit cigarettes and contraband products would undermine volumes for bona-fida manufacturers, as well as reducing government revenue by even more than the current estimate of £3.1 billion per annum lost from illicit trade in tobacco.

The conclusion from officers says:

Members need to consider whether they wish to support manufacturing businesses in the Bradford area and protect high value engineering jobs by taking part in the consultation process.

I shall be urging Bradford Council to act in the interests of jobs and business in the City and to oppose the proposals.

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An interesting little jobs statistic...

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Back in June 2008 - before the age of austerity, before the cuts, before all those civil servants were cast on the scrap heap, public sector employment in the UK was:

6,019,000 - that's 20.4% of the workforce

Now, after all the austerity, the draconian cuts and Osborne's reign of terror, public sector employment in the UK is:

5,942,000 - that's 20.4% of the workforce

Interesting don't you think?

Source: ONS (table EMP02 here)
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Plain packaging for tobacco will mean hundreds of job losses in Bradford

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The packaging industry is important to Bradford and much of it is geared to supply the tobacco industry. Introducing plain packaging is a big threat to these jobs. Here's Paul Barber from Weidenhammer:
 

“These proposals could have serious implications for our business as tobacco packaging is vital to our turnover. It could cost up to 50 per cent of the jobs here."

And the same goes for Chesapeake which produces packaging for Philip Morris and BAT.

Plus these businesses recognise the agenda of the New Puritans - plain packaging for fags will be followed by plain packaging for booze and crisps.

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Not what anyone expected - thoughts on Bradford, Galloway and what might be done

I guess it had to happen one day. Not that we ever thought yesterday was that day. Nor indeed, that George Galloway would be the man to do it. But it happened – Labour’s inner-city machine lost its wheels as people, mostly young people, flocked to the polls so as to give the finger to Bradford’s political leadership.

This nearly happened once before – less dramatically to be fair but it happened. From 1995, Conservatives won previously safe Labour wards – Toller, University (now City), Bradford Moor – only to come unstuck in the postal vote election of 2004. From being new – perhaps not exciting but new – challengers to the Labour machine, the Conservatives became seen as just the same. Why vote for a different set of machine politicians playing games of clan, caste and religion when you can stick with Labour?

Stood outside City Hall this morning, I chanced to speak to a leading Labour activist. He told me:

 “The biraderi game is over. This is a terrible result for us but it had to happen.”

This was followed by some choice words about the Council leadership, the Labour Party and the prospect of losing seats – Toller and Manningham particularly – to a local Respect surge. 

Galloway didn’t offer any answers, just the promise to be loud about the things that matter to the constituency – or rather to that young, Asian demographic fed up with machine politics, with a local political class that appears not to care about them or their community. The young men and women look up their street at the Labour Councillor in the big house, see him drive off in a shiny sports car and say to themselves, “is he really on our side?”

Pick up one of the postcards that Galloway delivered across the City and read the headlines – oppose the war, sort out the City centre, do something about jobs, put an end to corruption. Are these not the same cries that those young people utter? Galloway offers no answers but plays the role of echo chamber making those cries louder, more strident, more urgent. For all his rhetoric, Galloway will never provide the answers but we – the politicians looking at rejection – can begin to consider what might be done.

• Take control of the regeneration agenda – rather than, as so many Council leaders (including me) have done, hiding in the smoke and mirrors that is our regeneration strategy. Use some of the war chest – the £180 million in reserves – to kick start work in the City. Perhaps a new central library in the former Odeon, maybe actually digging out that canal we promised and even demanding a ‘put up or go away’ from Westfield. 
•  Asking where tomorrow’s jobs will come from – those thousands of young Bradfordians face a choice right now. Stay in the City on benefits or working stupidly long hours for not much money driving a taxi or sitting in a take-away. Or leaving – heading south to London, to the Thames Valley, to the Home Counties where there’s a chance of a job with prospects.
• Ending the Council’s culture of venal navel-gazing – for the past few years the Council has been obsessed with its internal structures, operations and organisation. Rather than bothering about how good or bad the City’s schools were, we obsessed instead about closing down Education Bradford, about bringing it back “in house”. As if this would change anything about the educating of children in Girlington. And the same goes for everything else – for social care, for health, for planning – we paid attention to the structure and cared little for the outcome
• Protecting services – over the past two years, rather than admit that its change programme wasn’t delivering savings quickly enough, the Council’s leadership chose to cut services. Right now they’re crowing about how the 2011/12 budget will have a £5.7 million surplus – that’s money which could have kept open a swimming pool, provided much needed care for the elderly or helped a few of those young people into jobs

On Monday the Council will return to normal. Officers will plonk behind their desks and pick up where they left off before the Galloway whirlwind swept through Bradford. There’ll be some frantic debate and discussion behind those heavy doors in City Hall but will anything change? The Labour Party will do its electoral calculus – wins in working class white wards like Eccleshill, Keighley West, Windhill, and Clayton will take them across the line even if Galloway’s acolytes snatch a couple of inner city wards. And no elections then until 2014.

And in three years Galloway will be gone, the fires will have burned out and the venal, self-serving Labour machine can reassert its malign control over Bradford’s inner-city.

Unless of course Bradfordians choose to have an elected mayor. Now that might just be interesting!

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