The only way is up? The minimum wage and Britain’s low paid workers
Gavin Kelly
This post originally appeared on Gavin's New Statesman blog
Tomorrow sees a 15p pence per hour pay rise for Britain’s lowest paid workers. Of course, every penny helps, but don’t expect to hear much gratitude. With RPI inflation running at 5.2%, this year’s VAT increase still being absorbed, tax credits being stripped back and any number of other pressures on the cost of living, this year’s increase won’t allow Britain’s low paid to stand still never mind move forward. The best that can be said is they will be getting poorer (given inflation) at about the same rate as those on average pay.
Want to earn your way up? Fine – just don’t be a woman, live outside of London, or work part-time
Gavin Kelly
This post originally appeared on Gavin's New Statesman blog
Who earns their way up in today's Britain? Recent work suggests the story of mobility is not all doom and gloom. It showed a significant rise in overall earnings mobility in the 2000s compared to the 1990s, admittedly starting from a low base. More people are now climbing the earnings ladder in their own lifetime, which of course means that more people are falling down too.
But who benefited from this from increased mobility – who went up, who slid down and who got stuck? Given the constant preoccupation of the entire political class with the notion of social mobility, it’s rather surprising that until now none of them could answer these questions. Now new research allows us to fill this gap, and in doing so it tells us some important things about the character of contemporary Britain.
The coalition's £11bn stealth cut
James Plunkett
This post originally appeared on the New Statesman blog
A technical quirk will allow the government to skim small amounts each year from lower income households.
What's the biggest cut George Osborne has made as Chancellor? Scroll through the Budget Red Book and the answer may surprise you. There's the removal of child benefit from higher rate taxpayers, clocking in at £2.5bn by the end of the parliament, and there's the time limiting of incapacity benefit which will save, eventually, around £1.2bn. But the biggest cut of all makes both moves look like minnows. It's the switch from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI) as the measure used to calculate tax credits, benefits and public service pensions.
New figures show women’s employment prospects the worst for decades
James Plunkett
This post orginially appeared on Left Foot Forward
With the coalition’s efforts to win back female voters in the news today, this morning’s new employment stats (pdf) couldn’t have come at a worse time.
The figures on women’s employment are terrible.
First, underemployment – an area of particular importance to women in the jobs market – has reached historic highs:
• The number of people working part-time because they can’t find full-time work is up 70,000 quarter-on-quarter to 1.28 million, the highest figure since records began in 1992.
The coalition's woes with women
Gavin Kelly
This blog first appeared on the New Statesman.
If you want to see a fearful expression, talk to senior Coalition members about shifting patterns of support among women voters. Call it a cold-sweat, or a premature onset of mid-term jitters – they are distinctly, indisputably on edge. Which is odd, at least on the face of it, given that the Conservatives – if not their Coalition partners - are currently polling at broadly similar levels of support to the last election. So what explains this onset of nerves?
Telling the story of the recession
James Plunkett
This post originally appeared on Left Foot Forward
One of the toughest challenges of economic policy is effective and timely communication. Few Governments will survive long if their economic message is out of alignment with what people are feeling. That’s why when ministers point to ‘green shoots’ too early you can expect a speedy retraction. But in a subtler way, it’s also why the Chancellors’ job is in no small part about story-telling. Like bad Hollywood movies, we deal with recessions in broad narrative arcs.
Taxing times for the coalition (contd...)
Gavin Kelly
This post originally appeared on the New Statesman blog
Just in case there was any risk of the coalition row on tax policy cooling down for a day or two, along comes a new report today, Tax and the Coalition, to fan the flames.
We do, of course, need to bear in mind that in this choppy pre-party conference period, there is bound to be a rash of publications appealing to the party faithful and burnishing the author's credentials in their eyes. Nonetheless, Lord Newby -- author of the report -- is a well connected Liberal Democrat peer and tax-expert, known to be close to Vince Cable. His report pulls no punches. The 50p rate must be preserved until fiscal consolidation is achieved; the Laffer-curve economics of those on the right calling for its abolition is dismissed; and a raft of tax raising measures are proposed that would hit the seriously affluent including a mansion tax on properties over £2m (served up with a swipe against Eric Pickles), an increase in capital gains tax, a land value tax, and further anti-avoidance initiatives.
America's skills crisis carries lessons for Britain
James Plunkett
This post originally appeared on the New Statesman blog
Yesterday's FT contained one of those ominous stories that only grow in significance over time - the findings of a survey by Nielsen that reveals a huge, looming skills shortage in the US as the baby boomer generation retires.
In the next five years, America's top 100 industrial companies face an average training bill of $100m to fill the gap between these older, retiring workers and the younger, less educated cohort coming through to replace them. It's payday - in a very real sense - for an economy that has long been under-investing in its people. And it's a warning sign to economies like the UK that, when it comes to investing in skills, you can't afford to take your eye off the ball.
Childcare double whammy: help is cut as costs soar
Felicity Dennistoun
This post originally appeared on Left Foot Forward.
The survey (pdf) published yesterday by the Daycare Trust and Save the Children was a stark reminder of the soaring costs of childcare and the impact they are having on family budgets. Fifty eight per cent of parents in severe poverty said they were no better off working once they’d paid for childcare; 41% said they were considering giving up work due to the reduction of the childcare element of the Working Tax Credit.
Willetts plays snakes and ladders
Vidhya Alakeson
This post originally appeared on The Spectator Blog
Social mobility has become something of a hot topic for the coalition. February's Social Mobility White Paper made it the government's number one social policy goal. Yet arguments over tuition fees have rather drowned out much of what they have to say on the topic, particularly when it comes to education and skills. So it was interesting to hear Higher Education Minister David Willetts restate the government's case with a speech at the Resolution Foundation yesterday.
‘Generation rent’ needs a helping hand
Vidhya Alakeson
This blog originally appeared on Public Finance
Yesterday’s report from the National Housing Federation predicted that by 2021 home ownership in Britain will have fallen to its lowest levels since the mid 1980s. 64 per cent of people will own a home compared to a peak of 73 percent ten years ago.
The government’s response to these predictions was half right. The minister for housing, Grant Shapps, talked about the need to build more homes. This would of course help address the chronic undersupply of housing, with the number of new homes being built at a post-war low. But it was also half wrong by continuing to focus exclusively on meeting people’s aspiration to own and ignoring the potential for the private rented sector.
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Archive for September 2011