Heatwaves, grannies and capitalism

Afternoon all,

I don’t want to worry you – but I’m pretty sure this is what the end of days would look like. Tonight the moon is going to turn the colour of blood – which apparently we’re all meant to think is fun, rather than a sign of impending doom… And if that wasn’t bad enough, it comes hot on the heels of something much worse: at Lords yesterday, they dispensed with the “requirement for gentlemen to wear jackets in the Pavilion”. Is nothing sacred anymore? No wonder the Prime Minister is stockpiling food…

As always in difficult times we’re here to help – ensuring that even if you end up hunkering down in a bunker, cave or a rediscovered Anderson shelter over the weekend you’ll have something to read. Have a great (and hopefully not last) weekend.

Torsten

Director, Resolution Foundation

Save the grannies: in schools and unis across the country the youth have finished their exams. They’re obviously relieved, but the real people that should be breathing a sigh of relief are their grandparents…. A (rather old) study argues that a grandmother is far more likely to die suddenly just before the student takes an exam than at any other time of year. Time to get the grandparents all signed up to the “less exams in schools” campaign….

Social immobility: If the labour market challenge facing us after the recessions of the 1980s and 90s was disgracefully high unemployment, the challenge today is progression out of low pay. Our national stats people at the ONS have done some digging into when that is (and isn’t) happening. They look at the likelihood of low earners progressing into higher paid work over a five year period (we’ve done similar analysis over ten-years). The key takeaways are for low earners to stay young or get qualified, and for policy makers to address some pretty stark geographic divides in workers’ ability to progress – there’s a lot more progress going on down south than up north. You’re also over twice as likely to progress out of low pay if you move region rather than stay put. We’ll hear more about this next Tuesday at RF HQ when the new Education Secretary Damian Hinds delivers his first major speech on social mobility (you can watch the livestream if that’s your thing).

Basket abandonment: The ability to shop via your mobile is one of the greatest/efficient/time-wasting/annoying developments of 21^st century consumerism depending on your viewpoint. But retailers beware, this isn’t quite the license to print money you might think – because of “shopping cart abandonment”. A recent paper (try the free summary) examines this serious sounding phenomenon that sees us browsing on our mobile but then being much less likely to go through with the purchase than on a desktop. Much as we love our phones apparently we get anxious about whether we’re getting a rubbish deal or that the security will be dodgy. So the high street isn’t quite dead yet…

Siesta time: Everyone’s got a favourite explanation for our disastrous productivity in recent years – from zombie companies that won’t go bust to big ones that won’t invest, or from crap jobs to crap bosses (inconceivable at RF, obviously). But this paper has a timely explanation – finding that “increasingly hot summers can have devastating effects on worker productivity.” It’s lucky the globe isn’t warming up then… Apparently, it’s a particularly big problem in cities due to them having a) lots of people and b) lots of tarmac. People + tarmac basically is the definition of a city so not much we can do about that. The helpful suggestion in the paper? A siesta.

A balanced globe? In the immediate aftermath of the financial crisis there was a lot of talk about tackling one of the underlying drivers of instability – global imbalances between countries running large current account deficits (think us and the US importing lots of stuff and borrowing from the rest of the world to pay for it) and surpluses (China and Germany normally get the blame for exporting a lot). Everyone said we’d sort it out, but that’s far from straightforward so, as the crisis passed, not much changed. That’s one of the conclusions in a new report from the IMF that shows we’ve made little progress in closing excessive imbalances over the last 5 years. During the crisis the problem with these imbalances was that could harm financial stability but the IMF’s short term worry today is that they lie behind much of the current tension about global trade (which is their euphemism for Donald Trump shouting at China, Germany – and for some god forsaken reason ­– Canada).

Chart of the Week

What links the anxieties of John McDonnell and Michael Gove? No, not plastic straws, but worries that our capitalism is a bit rubbish and that big firms are doing well but smaller companies and citizens are losing out. But are they right to worry? Yes says this week’s chart of the week from a new RF report on the subject – the 100 biggest companies have increased their share of our economy by a quarter since 2003 – and now make up 23 per cent of it. It turns out there are some things that fans of Karl Marx and Margaret Thatcher can unite around…