Opinion: Inequality And The Left – Simon Wren-Lewis – Social Europe Journal

Twickenham United Kingdom

Twickenham United Kingdom (Photo credit: @Doug88888)


Outsourcing-offshoring-resized (Photo credit: Wikipedia)

This is an excellent, MUST-READ article from Oxford economist Simon Wren-Lewis. Check it out!

via Inequality And The Left – Simon Wren-Lewis – Social Europe Journal.

Whilst I recognize the thrust of Wren-Lewis’ argument, I disagree that the right wing are necessarily painting poverty as laziness.

Surely, the less fortunate are suffering from having the wrong skills in an increasingly globalized labor market? Most public and private sector organizations have endeavored to simplify their product or service offering – this has led to widespread outsourcing and off-shoring. Along with technological improvements, there is just not the same need for unskilled or semi-skilled jobs.

On the other hand, I strongly endorse Wren-Lewis’ views that UK austerity has been excessive. Recent statistics have shown that investment, both in the public and private sectors in the UK, has collapsed in 2013 – this is because George Osborne did not provide the fiscal incentives. Stimulating inflation in private property with government guarantees is a poor substitute for real investment.

Large swathes of the unemployed are effectively unemployable. One solution is to create more jobs, with investment in infrastructure etc. BUT in the main,  the problem is to do with a mismatch of available labour and demand from business. The skills mismatch is often the reason that highly-skilled immigrants get the UK’s available jobs.

Whether it’s a left or right-wing UK government, there are some clear things that are required.

The UK Government needs to take a hard, strategic look at UK competitiveness, identifying sectors for growth and sectors for slow withdrawal. The growth sectors should be encouraged to invest for growth and exports. Most importantly, there should be a clear strategy to increase the UK labour market‘s skill-set to meet growth sectors. Sectors that are effectively the “dogs”, like UK healthcare, need to be heavily transformed based on global best-practice. Jobs in the “dogs” industries need serious attention to increase productivity or be replaced by outsourcing, offshoring or mechanization.

Similarly, a strategic review is required of the indigenous labour market, analyzing age, skills, location, potential for relocation (including offshore) – two important sectors that need urgent attention are the millennials and the baby-boomers.

Any thoughts?

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6 responses

  1. Pingback: The Great Malaise Drags On – Joe Stiglitz – Social Europe Journal « Dr Alf's Blog

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  5. What Dr Alf says makes excellent sense but some pundits on the right do portray the poor as lazy whilst others like Boris Johnson attribute it to being thick/possessing a low IQ.

    The reality of the UK is that it is not and never has been a meritocracy because if it was we would have more than 400 world class companies out of the 6 million or so registered at Companies House and we would have more than 7% of Times 1000 directors as woman.

    It seems we can have white middle class directors, 91% of whom lack a degree or formal management training of any kind, Chancellors not qualified in economics, lower productivity than the average for the G7 and just 1.4% growth over a period of nearly 68 years, yet nothing really changes and little action is taken.

    At the bottom, the lack of skills simply means that those who are not qualified or job ready don’t get jobs or are paid less.

    So under Tony Blair and David Cameron, we have widening inequality which is deepening because those who are already wealthy can invest their disposable income and pay others to do it for them whilst the poor have no disposable income and too many debts.

    Compared to the Koreans, Chinese and Japanese, we are lazy and ponderous, compared to Americans who have much higher worker productivity than we do.

    Using the Boston Box methodology as Dr Alf suggests will enable politicians to focus resources on rising sectors rather than bankrolling “no hopers” and the mendacious as is the case now.

    However, we need to apply the same remorseless logic to immigration and to the population as a whole, looking at those who produce more than they consume, and the vast majority who are a drain on the rest of productive society.

    Applying a “fix, sell or close” test to immigrants would see us hiring and letting in the best and the brightest and barring all the others.

    Adult Social Care recipients without relatives and incapable of being aggressively re-enabled, would be shipped out to Goa and Thailand, rather than being allowed to remain in the UK, gradually breaking county and unitary authority budgets and damaging the NHS or whatever replaces it for everyone else.
    Those that remained would be cared for by a combination of people and Asimo care robots in care homes built using systems building techniques via Hof Haus or similar providers.

    Former council houses would be reassigned to people on the waiting list and any remaining assets like houses and cars liquidated to pay for care costs over and above the then prevailing cap unless the relatives were prepared, as my sister and I were with our late father, to undertake the caring role ourselves.

    People who were marginal in these terms would be given new skills and assigned to firms using benefit recycling programs.

    This would still leave large numbers of economically useless people for whom very little is currently being done and for whom successive Governments have given no real thought.

    Currently, they sit at home, engage in minor criminality, take drugs, guzzle beer in Witherspoon pubs and generally make a nuisance of themselves on those occasions when they are in receipt of benefits or “cash in hand” running money from the Black Economy.

    75% of the people that the police arrest and that the courts imprison at taxpayers expense are unemployed and a series of surveys of prisoners shows that about 75% of prisoners except for clever white collar villains, are functionally illiterate.

    Some of these people might be suitable for the Tri Forces in the lower ranks thus resolving the current recruitment crisis, others might be transformed into street wardens to help the police patrol town and city centres and keep the public and tourists safe.

    Housing Benefit for single people needs to be abolished and brownfield sites should be set up on or adjacent to industrial estates where container communities can be established.

    Thus each Housing Benefit recipient would be housed in a converted shipping container which would run at about £3,500 gbp on E-Bay at current prices.

    Given rents even where I live of £500 gbp per month for a 1 bedroomed flat excluding council taxes of at least £1000 gbp a year the arithmetic is compelling.

    Systems building to deal with the current housing crisis will have to take place over decades and assembly could be undertaken by blue collar workers drawn from the ranks of the long term unemployed who would be assigned by the Government to construction firms using benefit recycling.

    They would live in converted shipping containers on site and at the end of each phase of construction the used shipping container would be moved to a new site.

    If they found better paying work they would rent in the private sector and relinquish their shipping container to someone else.

  6. Pingback: What’s trending on Income Inequality via Storify (with tweets) · dralfoldman · Storify « Dr Alf's Blog

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