Archive for the ‘Economics’ Category

Making the best of a bad job

September 14, 2010

Most people in employment who could afford to do so would accept less money in exchange for more free time. The reason we do not ask for this alternative is the fear of committing career suicide, since wanting more time off does not exactly convey ambition and commitment. But this may change since, in this economic downturn, management are likely to appreciate that less pay and more unpaid leave will crucially lower costs. Many companies have already managed to negotiate temporary factory closures and reduced working hours with staff on unpaid leave in order to protect their jobs. Whether the militant public service unions will allow their members to show such flexibility and common sense is, of course, another matter altogether.

Advertisements

International Bac to the rescue

September 12, 2010

With almost 10% of all candidates receiving the new A* grade (mark of more than 90%) grade inflation makes it impossible for institutions to distinguish between them. The report of Imperial College’s Richard Sykes concluded that “politicisation” had resulted in A Levels no longer being “a certificate of readiness for university study”. Tony Crosland’s disastrous war on the grammar schools destroyed the principal engine of social mobility in this country’s history. Now the horror of academic selection enshrined in the comprehensive school has leaked into our educational system at every tier. The only solution is the International Baccalaureate which must be protected from any tampering whatsoever from our poisonous education establishment.

Pension Age

September 11, 2010

To be viable in the long term, the age at which people can claim the state pension clearly needs to rise to keep pace with increases in life expectancy. The fact is that 30 years ago the average person received the state pension for 25% of their life but today that has increased to 33%. The Pensions Policy Institute was simply warning the Work & Pensions Department that people will need time to adjust to any increases by working longer and saving more. It recommended a ten year period of notice but thereafter the age should rise incrementally to 72 by 2030. This is hardly rocket science or unexpected since Gordon Brown had legislated to increase the state pension age for both sexes to 68 by 2046 and the current Government has indicated it would have to rise much faster.

Cheap Money Boom

September 10, 2010

China’s economy is now the second largest in the world but fears that it will soon eclipse the USA are misplaced. Importers know they should never rely on a single supplier are looking to diversify into Vietnam, Indonesia and other countries with lower wage costs. Chinese workers starting to enjoy Western lifestyles in Shanghai, Beijing and Hong Kong are unlikely to accept low wages and long, monotonous hours. So China is making huge investments in higher education to help them produce higher end products to migrate up the value chain and drive higher margins. However, economic projections are little more than guesswork and as was seen in Japan an export economy supported by an undervalued currency does not boom forever.

The future of work

August 19, 2010

A quiet revolution is taking place in Britain where a million workers are now over the age of 65 and one in 12 of our OAPs are still in the workforce. There are also 8 million part-time workers of whom a quarter are men and though some seek full-time employment many are choosing to work shorter hours. This is partly the result of firms cutting working hours instead of making staff redundant, though sadly such commonsense is unlikely in the intransigent public sector. But it is also driven by our increased longevity whose problems and opportunities are becoming starkly clear just as the vast baby boomer generation starts to retire. I believe the fact that future generations will work for around 50 years is inevitably going produce greater employment flexibility with shorter hours at various stages of life.

Paper Tiger?

August 19, 2010

China’s economy is now the second largest in the world but fears that it will soon eclipse the USA are misplaced. Importers know they should never rely on a single supplier are looking to diversify into Vietnam, Indonesia and other countries with lower wage costs. Chinese workers starting to enjoy Western lifestyles in Shanghai, Beijing and Hong Kong are unlikely to accept low wages and long, monotonous hours. So China is making huge investments in higher education to help them produce higher end products to migrate up the value chain and drive higher margins. However, economic projections are little more than guesswork and as was seen in Japan an export economy supported by an undervalued currency does not boom forever.

A new freedom on the horizon

July 31, 2010

In that hopeful dawn of 1997, calls were made to New Labour for an end to the compulsory purchase of annuities at the age of 75 – but that was a hope too far!

Gordon Brown, on the verge of becoming the greatest peace-time control-freak in our nation’s history, was never going to allow ordinary people such freedom of action

But good things come to those who wait and we finally appear to have a government capable of saying two or three sensible things in a row.

If people exercise personal financial responsibility while they are working, they should not have inflicted on them policies that assume they will blow the lot on retirement.

If we demonstrate that we have the means to avoid falling back on the state then we should be allowed to hand on our savings to the family and not an insurance company.

A lunatic has just taken over the asylum

July 28, 2010

The Coalition’s energy minister, Chris Huhne, has said Britain must build thousands more wind turbines because ‘global warming is our greatest challenge’.

In fact our greatest challenge is filling the massive gap in our electricity supplies when the EU forces us to close the stations currently producing half our power.

Huhne seems unaware that all the 3,000 existing windmills together produce less than a single conventional power station – about 2% of the electricity we need.

With the cost of essential back-up plants, these unreliable supplies will be three times as expensive as that produced by conventional gas, coal or nuclear power stations.

With the sole exception of the last Prime Minister, it is hard to recall a minister of the Crown in history who was less qualified for his post than this Lib Dem ultra-green.

Property Outlook

July 20, 2010

New affordability tests have been proposed which will severely restrict the use of interest-only mortgages, making it harder for first-time buyers to get a home loan.

From next year, lenders will be forced to check every borrower’s income bringing to an end the toxic practice of ‘self-certification’ mortgages which fueled the property bubble.

The availability of mortgages for first-time buyers with small deposits has in any case already dwindled since the end of 2007.

It could be a blessing in disguise as a growing number of economists are predicting a sustained fall that could last for up to a decade and shave up to 25% off prices.

PricewaterhouseCoopers warns that the slump could be prolonged with a growing likelihood that it will take till 2020 for the market to surpass its pervious peak.

Paying for the privilege

July 16, 2010

It is surely right that those who reap the financial benefits of a university education should pay for the privilege rather than it being entirely funded out of general taxation.

Vince Cable floated a graduate tax as a possible way of meeting the challenges of the future funding of tertiary education and both Ed Miliband and Ed Balls agree.

The usual suspects object that such an idea would be a disincentive for students to go to university but it would surely be less so than the existing system of fees.

The potential benefits are substantial, especially if the tax were to be levied on those working graduates from previous decades who had “free” university education.

There are potential drawbacks but the negatives look as if they will outweigh the positives and Cable is right that a graduate tax is, at least, worthy of exploration.