Sunday, 3 June 2012

Half a diamond and missed opportunity

Thirty years ago, I left secondary school, this was as the first Thatcher recession was coming to an end.

We were to be on the crest of a wave, we were told, North Sea oil would give us wealth, we were told the new computers and technology would offer well paid jobs and shorter working hours and of course, the crushing of the Trade Unions would make industry more competitive and better jobs.

So what has happened in the second half of the Queens reign.

North Sea oil has begun to run out, this has largely been used to pay for economic failure in terms of welfare payments.

Full-time employees in the UK work for the third-longest amount of time in the EU, completing an average of 42.7 hours a week compared to the EU average of 37.4 hours, according to the Office for National Statistics.

Not only has the number of hours not reduced, the type of employment  has also changed in 1952 40% of people were employed in Manufacturing today it is only 8%, with the service and financial sectors growing to fill the void.
 In the 1950s, there were 350,000 people registered as unemployed was a good measure of the number of jobless people of working age receiving benefit payments from the state. In 2012, the equivalent figure is 4 million
The share of skilled manual workers in total employment has fallen from 18% to 10% in the past two decades (there are currently 3.1 million). Secondly, there has been a rise in skilled employment of people performing managerial, professional and technical jobs – so-called knowledge workers. The share of people in these occupations has risen from a quarter to 44% (there are currently 12.7 million). And thirdly there has been a rise in mixed but essentially low-skilled employment performed by a group classified as ‘personal services’ and ‘sales and customer services’ workers, of which there are 4.7 million. Their share of employment has risen from around 6% to around 16%.

Since then wage inequality has increased considerably. Available comparative figures for all full-time male employees show that weekly wage dispersion – measured by the ratio of the top 10% of earners to the bottom 10% – has increased from 2.5 in 1975 to 3.75 in 2011. By the end of the first decade of the twenty-first century, the share of wages in UK GDP was lower (53%) than in 1952 (58%), with profit-earners rather than wage-earners taking a bigger slice of national income.

There has been a change in the type of employer, with fewer people working for large companies to smaller firms, with men enjoying less employment tenure with females has enjoyed better tenure of employment, this is explained by better maternity and flexible working.

The 1980' and 90's were far from golden decades, characterised by numerous periods of stagflation with sluggish growth and double-digit price inflation, two deep recessions, and often a double-digit unemployment rate. The stop-go of the initial post-war decades had given way to ‘boom and bust’.

Capital has often said that Labour had to become more flexible and productive, Labour has become increasingly flexible, many workers have lost employment rights, with more flexible contracts, from loss of sick pay, fewer paid holidays and loss of occupational pensions.

At the same time the Labour market was changing from manufacturing to service sectors, western capitalism was experimenting with deregulated financial and investment banking, this was a system of leverage debts and fancy products that seemly no one knew or understood, in effect the banks owned worthless assets and paid to much for them, leaving banks to be effectively insolvent, only government action saved them.

This credit crunch has seen the Bank of England pump in hundreds of million of pounds into banks in the form of Quanative Easing, this to restore banks solvency and to create liquidity so banks have the confidence to lend again.

So western capitalism's is at a cross roads it can change was the neo liberal economics of the previous thirty years that has polarised rich and poor, that has seen the productive economy shrink to a more fair and productive economy with all workers getting their share.

The queen is worth £310million in 2012 in 1971 the queen was worth £2million or equivalent to £21million today, so at least the Queens finances has done well in the last thirty years.

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