Useful evidence that we're all getting richer

We are often told that we should be working fewer hours. You know the sort of thing, Keynes said we'd all be working 15 hours a week by now so why aren't we? What is less often noted is that we are in fact all working fewer hours. The great reduction, of course, has come in unpaid working hours in the household. But that paid working week is also shrinking:

Workers in the UK are working the equivalent of a week's work less a year than they did 20 years ago, new figures have revealed.

According to the Office for National Statistics, the average worker in the UK worked exactly 31 hours a week in the final few months of 2016. This is 0.6 hours per week fewer than the equivalent figure in 1998.

Over the course of a year this is the equivalent of 31.5 hours, roughly one extra week.

That working week has been shrinking over the near century since Keynes wrote as well. Which is all as we'd expect it to be. Our starting assumption is that humans try to maximise their utility and some amount of leisure adds to that, as does some measure of income or ability to purchase worldly goods. This is also the idea which gives us the substitution effect which makes up one half of the Laffer Curve argument. As people become generally richer we would expect them to take some amount of that higher income in more leisure therefore.

The same logic can also be run backwards. That people are taking more voluntary leisure can be used as evidence that we are all getting richer. For we are achieving greater utility, the only measure of wealth that actually matters.

Corbyn's protectionism

Charging ahead with his so-called policy blitz, Jeremy Corbyn seems to be channelling the League of Gentlemen’s Tubbs and Edward in calling for increased powers to local councils to prioritise local firms when awarding contracts post-Brexit. He also claims that a Labour government would “support new and existing businesses and industries in Britain” - protectionist rhetoric that ‘Candidate Trump’ would have been proud of. To top it off, he wants to ensure that businesses are imbued with the same friendly, abstract values as us, like ‘fairness’ and ‘doing right by everyone’. Combined, Labour will be able to ‘upgrade’ the British economy. Unfortunately, I have my doubts that JC even knows how to upgrade his phone software, let alone the economy.

Where to begin? Prioritising local businesses for public contracts will lead to inefficiency and poorer services, not more local jobs. Isolating the UK from a €2.4 trillion EU public procurement market, to say nothing of the rest of the world, will prevent many of the best service providers in the world operating here and spreading best practice. Unions have complained that state-owned foreign companies, like Abellio, MTR and Arriva, are able to run our train services. Fortunately for train users though, they are usually picked because they offer the best deal. This is not to say that British firms are incapable of providing the same quality services—when they do they should win and keep deals—but the ultimate goal should be the best public services, not the best deal for the provider.

While the ‘infant industry argument’ (nascent firms don’t have the economies of scale to compete internationally so need some initial support to get going) is at least a partially defensible idea, government protections for British firms is an idea that should have died in 1846. What he means by ‘support’ is unclear, but subsidies to domestic firms will create inefficiencies and waste taxpayers’ money, while barriers to trade will make us all poorer. Not only will this decrease consumer choice, allowing firms to hike prices and scrimp on quality, but foreign governments whose companies have been spurned will impose similar restrictions to our firms; overall revenues and profits will fall. Employment will fall. Tax revenues will fall. Public services will suffer.

Thankfully recent outbursts showed no sign of his ‘bargain basement tax haven’ attack line, but the meaningless and mendacious rhetoric is still evident (though that is obviously not exclusive to the Labour party). I worry that Corbyn is trying to stoke and capitalise on the growing suspicion for business across the political fringes. Of course, bad business behaviour exists, but greater competition and a more knowledgeable consumer would help self-correct these problems. Ministers jumping at the next twitter storm scandal to make it look like they’re helping, with the aid of bureaucrats with zero experience of the industry will lead to cumbersome and unhelpful regulation.

The Labour leader has had a bee in his bonnet about banning zero hour contracts for some time, and while there are some issues with reliability of work, people actually on a zero hours contract are more likely to be happy with their work-life balance than those on full-time contracts and are just as satisfied with their job. Indeed, these contracts have also been a significant factor in our record high employment figures. Politicising rather than liberalising the jobs market will put people out of work.

We should all be grateful that Corbyn is unlikely to ever become Prime Minister - ‘Don’t Know’ has a far better chance. But then, Donald Trump got elected on lazy and populist economic ideas, so maybe we shouldn’t be so complacent. Free trade, free markets and economic liberalism make people better off, protectionism and state regulation does not.

We're so glad we can solve this little problem for the NUT

Not that we actually believe their analysis for a moment but assume, arguendo, that it's true, the solution is obvious:

The number of children who are going hungry at home has reached "heartbreaking" levels, the main teaching union has warned.

Four out of five teachers reported a rise in "holiday hunger" among children on free lunches whose families struggle to afford to feed them three meals a day through the holidays, a survey by the National Union of Teachers (NUT) found.

More than one-third (37%) said they saw pupils returning after the school holidays showing signs of being malnourished after starving for extended periods.

We simply do not believe reports of starvation or even malnourishment in Britain today. Sorry, that is to demean the meanings of those words. Absent serious mental health or addiction problems those two don't exist. Being hungry most certainly does but as we say, to equate he three is to not be serious about the meanings of the first two.

But let us assume that it is true. What should we do? 

Well, quite obviously, schools should run for 52 weeks of the year therefore. Yes, agreed, this is to diagnose the adults of modern Britain as so ludicrously helpless that they need communal feeding stations as if this is Mao's China. And we think it might end up working about as well too. But if it is true, as the NUT is stating, that only children fed in school are children being properly fed then full year, year around, is the only solution, isn't it?

Both teachers and the students can have four weeks holiday just like everyone else and take it on a rolling basis across the year just as all of the rest of us do too.

We look forward to the NUT explaining this to their members. But no need to thank us, it's obvious to everyone that this would be the only valid solution to the problem as stated, isn't it? 

Amazingly, we're not evil

Victoria Coren Mitchell writes of her buying 50 tiny tambourines in order to encourage the local librarian to continue her singing group for toddlers and tots:

To cut a long story shortish: my local library, which has been run by a children’s charity since the council removed its funding in 2012, has a weekly singing group for babies and toddlers. It’s a fantastic way to get parents, carers and children out socialising (and socialising together): toddlers that can sing, toddlers that can’t sing, toddlers from big houses, toddlers from council estates, toddlers from the temporary homeless accommodation in the next street, toddlers from the secret underground oligarchs’ lairs that must be round here somewhere… all of them clapping, dancing, speculating confidently as to the stock on Old MacDonald’s farm, then staying on to look at books and catch the reading bug. It’s truly a vision of how you would want society to be. UNLESS YOU’RE EVIL.

Despite our reputation we're not in fact evil. We might have the slightest wince at the thought of the yodelling little uns doing so in unison before the age at which they've quite identified what a tune is but that is about us, not them. But we do think this is a grand, if not essential, vision of what society should be.

It's possible to look at this from a rather conservative viewpoint, that of Edmund Burke and his insistence that it's the little platoons that actually make this thing called society work. Or we might be more properly liberal about it and consider the lessons of history.

For the 20 th century did give us a number of competing totalitarianisms. One thing that united them being their insistence upon that total control of society. This is clearest post 1945 in Central and Eastern Europe, which is when those with a plan were able to impose it swiftly, rather than the control being imposed in a more haphazard manner in reaction to events.

Everything, no matter what, was, is and must be under the control of the State. The Boy Scouts became the Young Pioneers.  The YMCA and all other youth groups must become part of the planned and organised State apparatus. The Women's Institute must not merely make jam or sing Jerusalem but must parade for socialist comity and understand their duty in building communism. That is, in fact, what totalitarianism really means, not the secret police and the Gulags, but that there is no civil society, no little platoons, no voluntary organisations. It is entirely possible to have such totalitarianisms of different flavours but they do all have that one unifying characteristic.

We've indicated that perhaps the two year olds' rendition of Old MacDonald might not be totally to our musical tastes but in a wider consideration it's one of the sweeter sounds this sphere affords us. For it's the exercise of that freedom of voluntary association, that most important of freedoms to society. As is, of course, dib dib dib, did those feet in ancient times and, young man, there's no need to feel down.

They're the sound of liberty, d'ye see?

We note that Colin Hines is pushing his progressive protectionism again

One of us got rather shouted at a few years back for describing Colin Hines' idea of "Progressive Protectionism" as fascist economics. Note, well please, that we did not go further and describe his ideas in toto as fascist, nor he himself. Just that there's a great deal of similarity between the one of the economic ideas he is currently advancing and those of various fascist movements across history.

This is the idea that this international trade thing is a very bad idea indeed and we should all be content with what we can make at home. Hines rather doubles down on this in a letter to The Guardian:

Your editorial on the French elections (11 April), with its encouraging mention of the rise of the higher tax and spend candidate Jean-Luc Mélenchon, failed to mention possibly his biggest electoral draw: the fact that he is a leftwing protectionist. Prior to the 2012 election, polls showed that over 80% of French across the political spectrum thought that free trade had a negative impact on employment. So it’s not just immigration that is fuelling ever-broadening support for Marine Le Pen, it is also the fact that she too is an overt protectionist.

These trends have obviously not been lost on the unholy trinity of free trade pushers the IMF, WTO, and the World Bank (Report, 11 April). Having forced nations across the world to accept their open-borders, export-led growth mantra they are now busy crying crocodile tears for the “left behind”, the inevitable result of their policies. They still rail against protectionism, despite the fact that if it has a progressive end goal, it could enhance the economic and social conditions of the globally disadvantaged.

In terms of the relevance of all this to the UK, and at the risk of intruding on public grief, what are the Labour party’s views on these under-publicised protectionist trends? The likes of Trump and Le Pen have been able to turn it into a politically potent and successful issue, so why are so many progressives over here absent from this pivotal debate?

Ourselves we would hope that even progressives can note that this neoliberal globalisation has had really rather a large effect upon the globally disadvantaged. That collapse in the absolute poverty rate out there should be a clue - this last generation has seen the greatest reduction in poverty caused human misery in the history of our species. We think that's a pretty good recommendation for an economic policy really.

But a little point we would make to Hines. If your economic policy recommendations could have come from the manifestos of Le Pen, Melenchon, Mussolini, Moseley or the BNP then we would recommend a reconsideration of those economic policies you're pushing.

Money and mental health don't appear to be moving in the right direction

We are continually told that it is poverty - which of course these days means inequality - which contributes so much to mental health problems. Anything, dependent upon the person advancing the argument, from the green eyed God of jealously through to the unfairness of the distribution of resources leads to more mental health issues as the society becomes more unequal. This is rather what the Spirit Level was trying to tell us for example.

Except the actual empirical evidence seems not to be supporting that idea:

A quarter of young women in the UK have suffered from anxiety and depression, according to a new survey released by the Office for National Statistics (ONS).

...

The study also reveals that in the four years from 2009-10 to 2013-14, the number of young people saying their mental health had “deteriorated” rose from 18% to 21%.

This is all rather odd:

Other figures from the study show that the number of young people who believe they are financially comfortable has increased since 2009-10. Seven years ago, 15% said they were struggling to get by, while by 2014-15 the number reporting financial hardship was 7% – and a significantly higher percentage (45%) said they were satisfied with their household income, up from about 30% in 2009-10.

Economic conditions improve and mental health deteriorates? That's not exactly supporting the idea that it is deteriorating economic conditions which worsen mental health, is it? 

Ourselves we'd run with the idea that the two vary, except at the extremes of course, independently. For we're not in fact Marxists who believe that economics determines everything, just classical liberals who are pretty sure that economics aids in determining what happens to the economy but there's a lot more to life than merely that.

Doctors must find reality to be just so damned annoying

We would not say that everything is perfect in the National Health Service, in fact far from it. Nor would we insist that the current arrangements for general practice are quite what they could or ought to be. But we would still insist that reality has to have a look in here.

GPs are fed up with responding to political whim; they want to provide care to patients which is based on evidence, not political expediency.

That's from the following gentleman who has just surveyed all GPs in the South West:

John Campbell is professor of general practice and primary care, University of Exeter Medical School

As we say, we really do insist upon that intrusion of reality.

The entirety of the National Health Service is paid for from tax revenue. That means that GPs in the NHS are paid for with tax revenue - your wages come from our pockets but through the filter of politics and politicians. Therefore, and this is inevitable, there is no way to avoid this, how those tax revenues are spent, what the NHS and GPs are told to do, will be determined by politics and politicians.

The only way out of this is for the NHS not to be tax funded and thus not under the control of the politicians. For that's actually what we elect politicians to do - oversee the spending of our tax money.

You may not like this but it simply is never going to happen that an organisation gets £120 billion a year of tax money without politicians directing how it is spent because that's what politics is for. 

The Adam Smith Institute’s Young Person’s Outreach Programme

Among the most successful and popular of the ASI’s events is the series which caters for young people.

The Next Generation

The Next Generation, TNG for short, began in 1990, and brings together people from 18-30, usually on the first Tuesday of the month. It was named after the sci-fi TV series, “Star Trek – the Next Generation,” which had recently started. The aim was to bring together young people from five groups: those in fulltime education, those staring out in City jobs, young professionals in fields such as law and medicine, young people working in the media, and those involved in public policy, including research staff for MPs and people in think tanks.

The format is that of a wine reception starting at 6.00 pm. At each meeting there is a speaker of public prominence for 10 minutes in the middle (timed with an alarm clock!)  The young guests enjoy each other’s company as the invited speaker circulates among them answering their questions. Some of those who originally attended as guests are now themselves MPs and media personalities.

The highlight of the TNG year is the annual Boat Trip, when 240 of them sail up and down the Thames on a champagne cruise on a summer evening. It is always heavily over-subscribed.

ISOS

The Independent Seminar on the Open Society is aimed at school sixth formers. The London one, held in Westminster, attracts about 150 students, many of them sent by their teachers, with some teachers even accompanying them. The format is of a one-day conference with a series of speakers on topics relevant to the work and outlook of the ASI.  Each speaker has a half-hour slot to cover their speech and questions, so many can be fitted in. There is usually a debate on some topical or contentious issue.

The ASI has recently extended the programme to include ISOS conferences in Manchester, Birmingham and Sheffield, attracting about 120 students to each, and is looking to include other towns in the future.

Forum

The ASI’s Forum, held on a Saturday in early December, is a one-day successor to the Liberty League Freedom Forum conferences, and like them, attracts over 300 guests, mostly students or people in their early 20s.  It is very high powered, covering both esoteric and specialist topics as well, with speaks who are prominent, knowledgeable, and highly entertaining. It gives students a chance to network with each other and with the speakers.

Freedom Week

Freedom Week is held in a Cambridge college in early July. It is a Monday to Saturday conference jointly organized and funded by the Adam Smith Institute and the Institute for Economic Affairs. It selects 36 top quality students from about 250 applicants, and provides them with accommodation and meals during a week of intensive lectures in aspects of political economy and neoliberal ideas.

Social events make it even more attractive, and include an outdoor cava reception, a barbecue and a session of punting on the river Cam.  By the end of the week the students have formed a close-knit and effective group.

School visits

ASI President, Dr Madsen Pirie, speaks to about one school each month, going to the school to address their sixth formers on topics of economic and public policy that might not feature prominently in the school syllabus. The schools often invite nearby schools to participate, giving an even larger audience. These visits often spur the students into attending other ASI functions and becoming part of its network.

Gap Years

Each year the ASI employs two gap year people as paid full time employees. Often it is a boy and a girl taking a year out after school. They participate in the full work of the ASI, writing for the blog, organizing meetings and school trips, helping to plan lectures and events and editing and proofing our papers. It is very much a learning experience that makes it easier for them to handle the demands they will encounter first at university, then in employment.

Work experience

The ASI accepts a few interns each year for short periods of work experience, usually a week or two. They play a full part in the ASI’s work, and are usually assigned a special project to complete during their stay.

Overall

The ASI expends much time and many resources on its youth outreach programme, fully aware of the importance of the next generation of leaders in academe, public policy, the media and business. This attention has paid off handsomely in the past, does so today, and will do even more so in the future.

The BBC's horrible figures on social care staff turnover

The BBC has some horrible figures about the numbers of social care workers who quit each year:

More than 900 adult social care workers a day quit their job in England last year, figures reveal, as homecare providers warn the adult social care system has begun to collapse.

Analysis by the BBC of data released by a charity, Skills for Care, shows that in 2015-16 about 338,520 adult social care workers left their roles, equal to 928 people leaving their job every day. There were more than 1.3 million people employed in the adult social care sector in England in the period.

Such bald numbers don't mean very much, what we want to know is the rate:

The Skills for Care figures show that the industry has a staff turnover rate of 27%, which is nearly twice the average for other professions in the UK, according to the BBC report.

Profession? This is not being a social worker, this is the essential tasks of aid with bathing, bottom wiping and so on. Essential, entirely so, but not exactly a profession.

Still, what we want to know is how this compares with other occupations. What, for example, is the variance between different ones across the economy? Fortunately, that is already information collected.

And as it happens that turnover in social are is, at 27%, fractionally higher than that in leisure and hospitality at 25.9%. Two low paid jobs which require little in the way of qualifications or training - other than the basic human attributes of a bit of empathy and so on - have rather similar turnover rates.

This is a surprise to whom and why?

Deregulate childcare to make it affordable

Britain has the highest childcare costs in the developed world. A two-earner family will spend over a third of their after-tax income on nurseries and childminders. It's three times as high as in Germany, even though our Government actually spends more on early years education. In fact, the UK government spends a bigger share of GDP on childcare than the EU average.

We've argued before that the solution here isn't to focus on the demand side with ever-greater subsidies, but to look at the supply-side factors that make childcare so darn expensive in the first place. Britain has some of the most restrictive childcare regulations in the world. Currently in the UK one adult is required for every three babies, four toddlers, or eight children over the age of three. Our staff-to-child ratios are some of the strictest in Europe, as the table below shows.

Source: Institute of Economic Affairs (2017)

A 2015 study by Dianne Thomas and Devon Gorry for the Mercatus Center at George Mason University reveals the harm of mandating high staff-to-child ratios. Here are the four big takeaways from their study:

1. Relaxing the staff-to-child by just just one infant reduces the cost of child care by between 9 and 20 per cent across all US states. Applying those findings to the UK suggest that simply by relaxing child-staff ratios to Norwegian levels we could cut childcare costs in half.
    
2. Mandating quantity doesn't lead to better quality. When researchers control for confounding variables (e.g. mother's education levels, socio-economic status and income) staff to child ratios only have modest effects on the quality of childcare received. 
    
3. High staff to child ratios aren't just ineffective and expensive, they're actively harmful to quality once you consider their knock-on effects. High staff to child ratios incentivise daycare centres to hire less-qualified staff in order to keep staff costs at manageable levels. If caregivers can provide care to twice as many people at a time then it makes sense to pay a bit extra for a more qualified staff member. Indeed, the evidence suggests that the biggest determinant of care quality is the level of training of the care giver.

We should follow Denmark, Spain, and Sweden's lead and scrap child-staff ratio mandates altogether. It would leave more money in the pocket of parents without undermining quality of care.