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Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘UK’

Britain’s unemployment is ultra-low, but its wages are ultra-measly

Posted by hkarner - 9. September 2018

Date: 08-09-2018
Source: The Economist

Normally, low joblessness means high wages. No longer

BRITAIN is enjoying a jobs miracle. Its rate of unemployment is one of the
lowest in Europe. Before long, and possibly as soon as the next release of data on September 11th, it could fall below 4%, a level not breached since 1974. The ruling Conservative Party is rightly proud of its record on jobs. Yet the economy that has got so many people into work has proved incapable of generating pay rises. Real wages are lower than a decade ago. The government may crow about unemployment being at its lowest since the 1970s, but pay growth is at its weakest since the Napoleonic wars.

A few factors help to explain why Britain enjoys such little unemployment. The OECD, a club of mostly rich countries, says the country has the least-regulated labour market in Europe. Hiring and firing staff is easier than in countries such as France, where the hassle of getting rid of bad employees makes bosses think twice about taking someone on in the first place. (France’s unemployment rate is more than twice Britain’s.) Policy measures have made Britons more employable. Since the 1980s governments have more closely supervised jobseekers’ efforts, which some research has associated with lower long-term unemployment.

In the past, low unemployment went hand in hand with juicy pay rises. The fewer the number of people looking for work, the harder employers had to compete for staff. The inverse relationship between unemployment and wage growth is summed up by the Phillips curve, named after William Phillips, who first plotted it in 1958. Yet in recent years the relationship has become much weaker. Economists in many rich countries, including America and Germany, have noticed that low unemployment is not generating the high wage-growth that might be expected. Britain’s ultra-low rate of joblessness, coupled with particularly weedy wages, makes it perhaps the biggest Phillips-buster of all.

As Britain’s unemployment rate has fallen, economists have been stumped time and again by the failure of pay to respond. In 2013 calculations from the Bank of England suggested that 6.5% was as low as unemployment could go without wages beginning to push inflation above its target rate. Within a few months that estimate had edged down to 5.5%. Then 5% or so. Now that rate is thought to be just over 4%.

Yet even as unemployment heads below that level, there is little sign of pay pressure. If the relationship seen during the 2000s held today, workers would be enjoying nominal wage rises of some 5% a year (see chart 1). Instead, the most recent official reading shows annual nominal wage growth of just 2.7% in June. Data from Adzuna, a job-search website, show that advertised salaries fell from June to July. The upshot is that wages have done worse in Britain lately than almost anywhere in the rich world (see chart 2). To explain this unusually poor performance, consider three factors.

First, productivity. In the long run, changes in real wages depend on how much workers produce per hour. Since the financial crisis, productivity growth has stagnated. Low government and business investment may be in part to blame. Britain’s manufacturing industry uses fewer robots per worker than Slovakia’s. Moreover, in recent years Britain has seen the rapid growth of low-productivity jobs in industries such as hospitality. The number of hairdressers has risen by 50% since 2010. The growth of such jobs has dragged down average productivity. Our analysis suggests that the changing composition of jobs in the British labour market has pushed down the average real wage by more than 2%.

Yet productivity is not the whole story. Pay per person has deviated further from its pre-crisis trend than productivity growth. In the past year output per hour has at last picked up, but wages have not. This points to a second reason for Britain’s weak wage-growth: workers’ diminished bargaining power.

The decline of unionisation is commonly blamed for this. In the 1960s, when unions were mightier, the share of GDP accruing to workers was far higher. But the kneecapping of the unions in the 1980s predates the recent stagnation in pay. Perhaps a more important reason is the government’s cap on public-sector pay rises. Since 2011 salaries for most public employees have increased by no more than 1% a year in nominal terms (though in recent months the cap has been raised). The pay premium typically enjoyed by public-sector workers has diminished. This also affects the private sector. If bosses are less fearful of losing workers to the state, they will be less inclined to offer pay rises.

Changes to welfare policy from 2010, including tougher rules on who gets benefits, and declines in their value, have also played a role. Cross-country analysis of welfare policy is scanty, but it suggests that the reforms in Britain have been especially hard-nosed. As losing a job becomes a scarier prospect, workers may not bargain so hard for better pay.

In trying to puzzle out the breakdown of the relationship between unemployment and pay observed by Phillips, economists are increasingly asking themselves whether the labour market is really as tight as the headline unemployment rate suggests. Few Britons are out of work altogether, but 8% say they would like to work more hours than they do, a higher share than before the financial crisis. A delivery driver, for instance, might want more errands than he is offered. Such workers may be more concerned about securing extra hours than demanding higher pay.

All this means that the labour market may need to tighten even more before wage growth improves substantially. Yet with inflation above the official 2% target, the Bank of England’s monetary-policy committee has lately taken a hawkish turn, raising interest rates in an effort to dampen the spending and investment that would raise demand for labour. Meanwhile, with Brexit six months away, the outlook for economic growth is poor. It may be some time before Britain’s miraculous unemployment figures are matched by equally impressive wage growth.

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Populism Bites Back

Posted by hkarner - 27. April 2018

Chris Patten, the last British governor of Hong Kong and a former EU commissioner for external affairs, is Chancellor of the University of Oxford.

Political posturing is often expedient. But British Prime Minister Theresa May’s government is now being reminded daily of the far-reaching consequences of staking out positions that lack any meaningful regard for the future.

LONDON – This spring, British Prime Minister Theresa May’s Conservative government is being reminded of just how powerful – and long-lasting – the unintended consequences of policies can be. Two problems concerning the United Kingdom’s borders – one relating to immigration, the other linked to the frontier with the Republic of Ireland – have lately erupted. While they have not yet weakened support for the government, they probably will. And they are almost certain to diminish what is left of Britain’s soft power.

The immigration problem goes back some seven decades, to the arrival of the first waves of Caribbean immigrants in the UK. They had been invited by the government in the wake of World War II to help offset a labor shortage, taking hard-to-fill jobs in the National Health Service (NHS) and other sectors. Den Rest des Beitrags lesen »

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No Hope: The Nation States are Killing the EU

Posted by hkarner - 16. März 2018

Date: 15-03-2018
Source: The Wall Street Journal By Simon Nixon
Subject: The Dark Underbelly of Europe’s Financial System

The EU has rules to guard against money laundering, but members must ensure the law is enforced

The EU has introduced a single rule book to cover customer protection and anti-money laundering, but it is up to domestic agencies to ensure the law is enforced

Something is rotten in the European financial system.

The U.K.’s status as a global capital of money laundering is once again back in the spotlight following the attempted murder of former Russian spy Sergei Skripal and his daughter, which the British government has blamed on Russia. The scandal has revived concerns about the U.K.’s remarkable openness to the mysteriously amassed fortunes of Russian oligarchs with links to Russian President Vladimir Putin and the extraordinary role that U.K.-registered companies have played in some of the biggest money-laundering scandals that have surfaced in Europe in recent years.

But the current focus on London follows a string of disturbing stories that has exposed the dark underbelly of the financial system across the continent. Den Rest des Beitrags lesen »

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Milking it: bosses’ pay

Posted by hkarner - 5. Januar 2018

Date: 04-01-2018
Source: The Economist
Today has been dubbed “Fat Cat Thursday”, at least by those critical of the bumper salaries Britain’s business chiefs enjoy. According to the High Pay Centre, a think-tank, this is the date by which bosses at FTSE 100 companies will have already earned more in the new year than the typical full-time worker can expect in the entirety of 2018.

The HPC calculates that the executives’ median pay was £3.45m ($4.66m) in 2016 (the latest available data); that of an average worker in 2017 just £28,758. Fat Cat day has caught a populist mood in austere times.

Scandals at businesses like BHS, a retailer whose boss pocketed millions in 2016 while its pension pot dwindled, have not helped. Under public pressure, in that year corporate pay actually fell. Politicians have responded too. Theresa May’s government is expected soon to force listed companies to publish the ratios between the highest and lowest earners. Expect the fattest cats to diet.

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The machine age is upon us. We must not let it grind society to pieces

Posted by hkarner - 30. Dezember 2017

Date: 29-12-2017
Source: The Guardian by Chuka Umunna

Chuka Umunna, the Labour MP for Streatham, is a former shadow business secretary

What good is glittering technology if it robs us of jobs and rips communities apart? We need to work out how humans will prosper in a world of robots.

We need to talk about work. The new machine age will transform our understanding of it. Work is the way we contribute to society, part of a reciprocal social contract – the giving of our effort and our taking when in need – that holds our society together. We work, we build our society, and we share in its prosperity.

But our social contract around work is broken. Back in the 1980s parts of our country were devastated by de-industrialisation. This wave of globalisation and the first fruits of technological innovation destroyed industrial jobs or exported them to low-wage economies.

The loss of work had a devastating impact. We must never forget the value of work because without it people are denied a sense of dignity and of community. When you lose work, the meaning and purpose of life are taken away from you, and isolation can set in. Research shows you are at greater risk of sickness, substance abuse and other challenges. Families can start breaking apart under the pressure, mental illness rises, and educational achievement collapses. Den Rest des Beitrags lesen »

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UK’s poorest to fare worst in age of automation, thinktank warns

Posted by hkarner - 30. Dezember 2017

Date: 29-12-2017
Source: The Guardian

Machines threaten jobs generating £290bn in wages and could widen inequality gap, according to IPPR

The IPPR suggests factory workers are likely to be among those losing their jobs or facing fewer hours due to automation.

The rise of the machine economy risks social disruption by widening the gap between rich and poor in Britain, as automation threatens jobs generating £290bn in wages.

Jobs accounting for a third of annual pay in the UK risk being automated, according to the study by the IPPR thinktank. Warning that low-paid roles are in the greatest danger, it urged ministers to head off the prospect of rising inequality by helping people retrain and share in the benefits from advances in technology.

The study for the IPPR’s commission on economic justice, which features senior business and public figures including the archbishop of Canterbury, called on the government to take a greater role in managing the adoption of robotics, artificial intelligence and other methods of job automation in the workforce. Den Rest des Beitrags lesen »

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Brexit und die Wirtschaft: Der Abstieg hat begonnen

Posted by hkarner - 18. Dezember 2017

Großbritannien spürt die Folgen des anstehenden EU-Ausstiegs. Die Wirtschaft lahmt, die Preise steigen. Lässt sich der Brexit doch noch rückgängig machen?

Eine Kolumne von

Im Englischen gibt es ein paar deutsche Lehnwörter, die ein nicht eben schmeichelhaftes Licht auf uns werfen. Schadenfreude gehört dazu. Ebenso Katzenjammer. Und natürlich Angst. All diese Worte sind fehl am Platz, wenn es um den Brexit geht.

Der britische Ausstieg aus der EU ist eine Tragödie. Ein politisches Schockereignis, das eigentlich nie hätte stattfinden dürfen. Doch so wird es wohl geschehen: Mit knapper Mehrheit per Volksabstimmung bei geringer Wahlbeteiligung entschieden, ist Britannien auf dem Weg, die EU zu verlassen. Etwa die Hälfte der Verhandlungsfrist ist bereits verstrichen. Was am Ende dabei herauskommt, ist offen.

Nach wie vor ist ein harter Brexit möglich, also ein Ausstieg Britanniens ohne Abkommen mit der EU – womöglich in heftigem Streit, mit offenen Rechnungen und zerbrochenem Porzellan. Aber immerhin: In der abgelaufenen Woche sind die Chancen auf eine freundschaftliche Trennung gestiegen. Der EU-Gipfel hat die Weichen gestellt, sodass die zweite Phase der Brexit-Verhandlungen beginnen kann. Den Rest des Beitrags lesen »

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Stresstest: Britische Banken können mit „hartem“ Brexit umgehen

Posted by hkarner - 28. November 2017

Sieben britischen Großbanken mussten sich dem bisher härtesten Stresstest unterziehen. Keine fiel durch.

Die britischen Banken können einen „harten“ Brexit verkraften. „Die Bank von England kommt zu dem Urteil, dass das Bankensystem die Realwirtschaft selbst in dem unwahrscheinlichen Fall eines ungeordneten Brexit weiterhin unterstützen kann“, sagte Notenbankchef Mark Carney am Dienstag in London bei der Vorlage des Finanzstabilitätsberichts der Zentralbank.

Derzeit verhandeln in Brüssel Unterhändler der britischen Regierung mit der Europäischen Union über die Modalitäten eines Ausstiegs aus dem Staatenbund. Dieser Schritt soll im März 2019 vollzogen werden. Carney forderte abermals eine „rechtzeitige Vereinbarung“ über den Brexit und plädierte für eine großzügige Übergangszeit, um die Risiken für die Finanzstabilität des Landes zu reduzieren. Den Rest des Beitrags lesen »

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Inconvenient Truths About Migration

Posted by hkarner - 23. November 2017

Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University and a fellow of the British Academy in history and economics, is a member of the British House of Lords. The author of a three-volume biography of John Maynard Keynes, he began his political career in the Labour party, became the Conservative Party’s spokesman for Treasury affairs in the House of Lords, and was eventually forced out of the Conservative Party for his opposition to NATO’s intervention in Kosovo in 1999.

Standard economic theory says that net inward migration, like free trade, benefits the native population after a lag. But recent research has poked large holes in that argument, while the social and political consequences of open national borders similarly suggest the appropriateness of immigration limits.

LONDON – Sociology, anthropology, and history have been making large inroads into the debate on immigration. It seems that Homo economicus, who lives for bread alone, has given way to someone for whom a sense of belonging is at least as important as eating.

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Bank von England will Steuerzahler vor Bankpleiten schützen

Posted by hkarner - 2. Oktober 2017

Mit höheren Kapitalanforderungen will die Bank of England verhindern, dass bei einem Zusammenbruch einer britischen Bank erneut die Steuerzahler zur Kasse gebeten werden.

Bis 2022 müssten die britischen Institute für diesen Zweck insgesamt noch vier Milliarden Pfund (4,5 Milliarden Euro) an zusätzlichen Eigenmitteln und Anleihen einsammeln, teilte die Notenbank am Montag mit. Damit werde sichergestellt, dass selbst große Banken nicht mehr zu groß sind, um sie untergehen zu lassen („too big to fail“), sagte der Vize-Gouverneur der Bank of England, Jon Cunliffe. Allein zur Rettung der Royal Bank of Scotland sowie Lloyds waren während der Finanzkrise umgerechnet rund 74,7 Milliarden Euro an Steuergeldern geflossen.

Die europäischen Regeln zur Bankenabwicklung sehen vor, dass bei einem Banken-Kollaps Anteilseigner und Gläubiger zuerst für die Verluste gerade stehen müssen („bail-in“), bevor Geld der Steuerzahler fließt. Die Banken müssen deutlich machen, welches Eigen- und Fremdkapital im Pleitefall zur Verfügung steht. 116 Milliarden Pfund an Fremdkapital, das die Banken bereits aufgenommen haben, müssten klar als „bail-in“-Mittel (MREL) ausgewiesen werden, erklärte die Bank of England. Den Rest des Beitrags lesen »

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