Aren’t we lucky we’ve Rolls Royce minds in Whitehall guiding the economy for us
No, no, that rumour that the fall of the Wall meant we actually got smoking two strokes instead of purring V8s is untrue. It would be most, most, unkind to suggest that we’re now run by Trabbies:
UK entry-level jobs are down by nearly a third since the release of ChatGPT in 2022, data released today shows, with some of Britain’s biggest graduate employers – notably the “big four” accountants – slashing graduate recruitment programmes because AI is doing the job instead.
Dario Amodei, the boss of AI firm Anthropic, recently predicted that the technology he’s betting his career on could wipe out half of all entry-level jobs in white-collar professions such as law, consulting and finance within five years.
Gosh, how exciting. Just think of the benefits here, if there are fewer trainee lawyers now then that means society will - blessedly - have fewer lawyers in the future as that employment pig moves through the python of the economy. Glory Be To etc.
The Government’s decision to increase employer costs and overhaul workers’ rights has taken a further sledgehammer to entry-level roles.
Many businesses have frozen hiring following Rachel Reeves’s Budget tax raid, which disproportionately affects young and low-paid workers after she raised employers’ National Insurance contributions.
And now for that consideration of Rolls Royce minds againt the Trabants. Just as low and entry level employment gets hit by technological change is just the moment to - substantially - increase the costs of employing low and entry level labour, isn’t it? Because, mumble, mumble, success! See?
There is a little story from back in those early years after that Wall fell. One that’s far too good to actually track down and check for detail. The varied Western European car manufacturers ran the slide rule over the varied about to be privatised Eastern European ones. VW sent a laddie to check on Trabant. As he gave his presentation about that factory to the Wolfsburg boardroom he burst into tears. The factory was so bad that the cars driven out - well, OK, pushed out - of the factory were worth less than the raw materials that went into their manufacture. Not just that the factory was making a loss, but even after we took off the capital and labour costs the cars were still worth less than the iron and papier mache (no, really) that went into their manufacture.
The lesson from this being that it is possible to have something both state run and so bad that it is value subtractive from the society as a whole.
Some will insist that this is not true of the current system that rules Britain. To which claim we’d say “Go on then, prove it”.
Tim Worstall