The long fight against globalisation, long hours and flipping burgers

Top of the Charts

Afternoon all,

Hope you’re all enjoying this week’s retro feel. Price surges and supply shocks have got everyone in the 70s vibe. And the only thing more retro than a Labour leader writing a long pamphlet is that loads of people appear to have actually read it.

We’re getting into the historical mood with some TOTCs reads on Danish strikes in the 80s, productive Japanese workers in the late 2000s, and the post-1990s backlash against globalisation. At least history is some light relief from our contemporary trauma: infecting as many school children as is humanly possible. Everyone that didn’t want to vaccinate school kids has got exactly the autumn they were hoping for…

Have a good weekend all,

Chief Executive
Resolution Foundation

P.S – We’re very excited to be launching our new research programme on Net Zero next Thursday – join the launch where we’ll present new research on how decarbonisation will affect households and their living standards in the years ahead.

Security guard. That is what Keir Starmer is basically promising to be in his new essay that you might as well read, just so it’s out the way. Rather than getting into the normal Labour rows (socialist vs social democrat vs liberal), Keir’s piece basically tries to ignore them (maybe fair enough given voters wouldn’t have a clue what they mean). Instead what’s being offered is a form of more common sense security – that Labour will be on your side in an unfair economy when it comes to jobs or housing, and that ex-Director of Public Prosecutions Starmer will make our streets safe again. The other strong theme is contribution, with the security offered focused on those who “work hard/play by the rules”. Just as there’s not much political philosophy, there’s not a lot of economics either. So, none of this is revolutionary, but those expecting it to be are rather missing the point. The whole purpose of the pamphlet is to make Labour seem a lot more… normal.

Big McStrikes… is the answer to why Danish McDonalds workers get paid $22/hour. That’s the argument made by Matt Bruenig in a short blog reflecting on the fast food chains arrival in Denmark in the 80s. When they arrived in 1981 the firm didn’t fancy signing up to the sectoral agreement on pay and conditions, which they now follow. What changed their minds? Massive strikes/boycotts in the late 80s – including sympathy strikes in other industries supplying the firm. Bruenig’s argument is an unsubtle one about needing to will the means (worker power) if you will the ends (lower inequality).

Perky pupils. It’s regularly asserted that having tests at the end of primary school in England is a bad idea because it’s stresses kids out. That’s among the reasons why tests at the end of Key Stage 2 aren’t used in the rest of the UK. But it’s nonsense, concludes research that compares pupils happiness, mental well-being or enjoyment of school across the nations of the UK at that point and finds little difference. So, it’s right that we should be alert to the causes of worrying signs of increased mental ill health among our children – but blaming primary school tests looks wide of the mark.

Grumpy globalisation. This was blindingly obvious, but for the dense among us Biden spelt out this week that he has precisely zero interest in a UK trade deal. In fact, he’s got no interest in trade deals with anyone really. Why? Because Biden’s entire political project is to avoid a rerun of Trump – whose election was the pinnacle of the globalisation backlash of recent years (our own exit from the European Union may be its longer-lasting legacy). So it’s a good week to read a new, comprehensive, literature review on the interactions between the globalisation backlash and trade. The argument isn’t a simple one of voters attitudes to trade becoming more negative (they haven’t). Instead it’s that globalisation (along with technology and austerity) have widened cleavages between social groups/regions, and raised demands for protection from economic change more generally. This underpins policymakers’ protectionist shift on trade. Lots of food for thought but the main lesson? Where our politics and economics goes next depends a lot on our ability to make structural economic change more inclusive. That’s basically what Bidenomics is all about.

Work less… and you’ll produce more (or at least more productively) is the argument from research into the experiences of one Japanese firm during the financial crisis. It’s expensive to fire people in Japan so as the amount of work fell, working hours were cut (monthly overtime fell from 40 to 20 hours). But as hours came down team productivity rose (up 7.6 per cent). Now at one level this is the usual argument about better-rested workers having more energy. But more interestingly, the rise in team productivity was bigger than for individual workers because individuals getting their work done quickly don’t hold each other up and speedy work reduces the need to add in additional (less-productive) team members to finish jobs off. It’s a good reminder to avoid abstract productivity discussions that take a narrow, individualised, view of work.

Chart of the Week

Two big cost of living pressures will collide next week as the energy price cap rises by 12 per cent (or 13 per cent for those on pre-payment meters) while Universal Credit is cut by £20/week. What’s more, as COTW shows, many low-income families will be disproportionately affected by both of these issues. Back in 2018, those on means-tested benefits were more than twice as likely to be in fuel poverty than those who were not in receipt of benefits. The welcome UC uplift in March 2020 will have lowered these rates – withdrawing it now risks sending fuel poverty right back up again, while rising fuel bills will also increase the depth of fuel poverty. Families on means-tested benefits needed their energy bills to fall by £62, on average, in order to escape fuel poverty in 2018. But this winter bills will very much be up, not down.