Big cheques, teenage kicks and why the HR dept could decide your future Top of the Charts 8 January 2021 Torsten Bell Afternoon all, Now I know this is going to be hard for some of you to accept, but there has been a full and fair process. None of the fraud allegations have been upheld. So it’s time to certify the winners of this year’s Resolution Foundation Christmas quiz. Almost 700 entries saw a mean score of 3.82 out of 10, which is to be blunt… rubbish. This is what a low productivity decade has done to us all – either that or everyone started Christmas drinking early. On the plus side it’s an on-brand low-to-middle average score for a Foundation focused on low-to-middle income families. As with UK incomes, inequality was high. Four of you managed to get 10/10, with two giving up their chance of everlasting glory via anonymous submissions. We thought about flipping a coin to decide the winner but decided it just not worth the risk of the loser storming Resolution towers. So….our joint winners are (drumroll)… Hugo Popplewell and Peter Strachan. Congratulations both – a book and TOTC-themed coaster will be on their way soon. Have a good weekend recovering from lockdown/home-schooling/Washington madness. Torsten (Re)living the dream. It turns out we don’t look back in anger, at least music-wise. New research says those of you using this new lockdown to refine desert island disc choices have a high chance of picking music from your teens. The study showed participants 111 pop songs from a range of decades, asking them to rank the extent to which they knew/liked the song, or associated it with significant memories. Scores peaked for tracks published when participants were 14, particularly in terms of important music-related memories. And this retro appeal goes further – apparently the youth are also more likely to be familiar with, and enjoy, music from their parents’ teenage years. This is basically a whole other kind of home schooling: turn up the music of our youth, and make sure the kids are listening. Pass it on. Israel’s rapid vaccine roll-out is drawing attention, but a new study investigates the effectiveness of the country’s economic coronavirus response – specifically universal grants of $220 per adult and $150 per child sent to households. It’s good to see a study on a non-US version of the policy (South Korea and Japan also had similar stimulus approaches), although it’s clearly relevant to current debates about whether forthcoming US stimulus cheques should be increased to $2,000. The findings reinforce others on universal payments as stimulus measures: only a minority of people choose to spend their grants (25–31 per cent), with paying down debt the most common use of the cash (42–52 per cent). My conclusion is that the best argument for the $2,000 cheques in the US is a political economy one (ie you can get congressional agreement on it) rather than as an optimal way to either help those hardest hit, or support the economy more generally. The study does have one rather new finding – which is that around 14 per cent of people reported donating their payments to others (often different generations) or charity. The authors suggest this shows the targeting downsides of such payments might be less of a problem, which is what you might call a charitable interpretation. Board at work. You might have seen High Pay Centre work this week arguing that the typical FTSE 100 CEOs exceeded the average UK workers’ annual wage in the first three days of 2021. Many of us favour workers’ representation on corporate boards (or at least remuneration committees) to reduce this huge inequality. But a research paper (free version) challenges my own priors on this. The top-level findings are encouraging: Norwegian data shows workers at firms with worker board representation have higher wages (you earn 4 per cent more moving to such a company, rather than one without representation). However, controlling for the size of the firm and union strength (which make worker representation more likely), the effects of workers on boards appears minimal. The researchers make the strong conclusion that this shows mandating worker representation on boards is unlikely to make a difference to workers’ pay. Food for thought, but I’d would also note that studies of the beneficial impact of board representation in Germany have shown it to mainly be about increasing firm investment, rather than raising wages. What comes next? Deciding where next for the British economy post-Brexit should be on all politicians to do list. And no I don’t mean repeated inane requests to business about which bits of red tape to cut. A short, sharp blog from experimental physicist Richard Jones should provide some impetus to our reflections. He shows that in terms of value added per person in knowledge- and technology-intensive industries, the UK has slipped from 12th to 17th since 2002. Now not all our advanced service sectors are included in that measure. But Richard’s argument is that it should still worry us as a long term driver of productivity. One for us to ponder, once everyone’s worked out what rules of origin are… History lessons Vaccine induced light at the end of the tunnel has encouraged a renewed bout of talk about how the mass move to Zoom and Teams means end of the office. For some historical perspective check out recent work, comparing the shift of workers from home into factories in the 1800s to the current office to bedrooms move. There are lots of interesting points, but the big argument is that questions of how workers are coordinated are as important as technology when it comes to whether big changes in ways of working happen. For all the progress on being able to see/talk to each other remotely over the past year, we’ve seen nothing ground-breaking on the tricky question of how to coordinate, manage and motivate a team remotely. HR rather than tech may be the real barrier to ending the office. Chart of the Week In “worst Christmas present ever” news, home-schooling is back. This necessary but catastrophic step damages education outcomes and any pretence to educational equality. But it also has major economic impacts in the here and now, ones that shouldn’t be news this time around given we lived through lockdown 1. It increases cost pressures on some (particularly lower income) families – which we explore in new research next week. But as well as cash, home-schooling takes time – so Chart of the Week focuses on who is doing the schooling. I know it’s obvious women ended up doing it more than men, but the extent of the gap in the first lockdown was a total shock: mothers were almost twice as likely as fathers to reduce working hours for childcare or home-schooling. Mothers were also around one-third more likely to have lost their job than fathers in lockdown 1, despite pandemic job losses being fairly evenly spread between men and women overall. The lessons = firms (and fathers) have to do a better job of living the gender equality they preach, and schools should be our top priority for reopening once we’re in a position to start lifting restrictions.
