The dangers of excess cash bags and hashtags

Afternoon all,

I know you’re all obsessed with the US mid-term elections this week, but I’ve got some lifestyle advice for you: it’s not good for your blood pressure. Not only does reading lots about it remind you that Donald Trump exists, but you may have noticed that – unless you’re a US citizen over here – you don’t get a vote. And there’s nothing worse than worrying about something you’ve got no agency over.

The lifestyle advice theme runs through this week’s reads – from the dangers of excessive tweeting, to the reminder that money alone can’t make you happy (and can get you fired…).

Have a good weekend, and if you follow our advice and it could be an angst free one*.

Torsten
Director, Resolution Foundation

* This is an overclaim: the Resolution Foundation accepts no liability for the angst levels of those following bogus lifestyle advice.

Stay calm. There’s a lot of noise and not a lot of new light when it comes to current debates on attitudes towards the EU at present. So it’s very welcome this week to see a great new paper (summary) looking at the history of pro and anti-European attitudes in the UK and what that can tell us about our future. It’s got a serious warning for those asserting that Britain’s future is automatically pro- or anti-European. Some have argued that as younger, more pro-European, generations will outlast older Brexit voting generations, the UK will default into a pro-European country. Others have pointed out that we are becoming an older society, and older people are more anti-European, so our future is more Eurosceptic. Both arguments rightly identify off-setting effects (cohort vs life stage ones) but draw far too strong conclusions from them. As the paper shows, the big national mood swings of anti/pro European feeling dominate either effect. The good and bad news from this is that you can put away your determinism – our future is there to be argued over.

Step away from the money. This week saw the toppling of Britain’s highest-paid boss, from the Help-to-Buy homebuilding titans Persimmon, after their board worked out that his £75 million bonus was a problem. These are the same geniuses that gave him the bonus in the first place without clocking it was roughly equal to a typical household saving all its income for 2,900 years. If you still need more evidence for the case for workers on remuneration committees (hello No. 10), this is it. But why on earth do people go to such lengths to get more money than they possibly need? Because, as this chapter summary from Jeff Kreisler and behavioural economist Dan Ariely notes, ‘money is much more tangible than happiness, well-being and purpose, (so) we tend to focus our decision-making on money instead of on our ultimate, more meaningful goals’ that are hard to measure. Of course the Beatles got to this conclusion half a century ago.

Tweet less. I knew it! Twitter is the root of all evils our productivity crisis. Okay that’s overdoing it, but this thoughtful blog from the Bank of England sets out a framework for thinking about how social media use might be bad for productivity. Worryingly, it’s not just the time lost from people staring at their phones, we may actually be deskilling ourselves by losing the ability to concentrate….sorry where was I again. Oh yes. To add some historical context – an 1897 article in The American Electrician worried that the spread of telephone technology risked turning people into “transparent heaps of jelly.” It took a while, but we’re getting there. Here’s The Atlantic’s take on the problem today, as well as a few mindfulness-based ways to deal with it.

Spend it! Scandinavians don’t like conflict, but there’s been a big row going on about whether Norway has done the right thing in saving such a huge portion of the windfall oil wealth into its sovereign wealth fund. Joseph Gagnon has argued that Norway had saved beyond the level that would be necessary to fairly share the oil wealth between current and future generations and, to make the Norwegians feel bad, adds that building up huge savings pile is bad for the rest of the world when we’re stuck in a low demand, low interest rates era. A couple of IMF economists then responded, arguing that Norway’s savings are in fact insufficient to ensure future generations of Norwegians can avoid paying higher taxes or cutting spending. And now Gagnon has responded noting that it’s not clear current generations should be foregoing their spending in order to spare future generations from paying higher taxes. It’s a tough one – but don’t worry it’s not an issue we’ll have to wrestle with as we’ve already blown all our oil windfall. Clever us.

Avoid serfdom. Post-Brexit migration policy is a controversial topic – but not one we can really avoid talking about. At present higher skilled workers coming from outside the EU come via an employer sponsorship (a Tier 2 visa), and this scheme looks likely to be applied to EU workers in future. There are arguments for and against this approach – you get to target migration at skills gaps, and firms have to be sure workers can actually do the jobs rather than bureaucrats making decisions based on formal qualifications. But it does tie the worker far too closely to the specific firm? After all, if they want to move to a competitor the whole process has to repeated. What can history tell us about that phenomenon? A new paper (open access version here) looks at the impact on labour markets of Denmark’s reintroduction of serfdom in 1733, which aimed to keep farmhands from moving around for new jobs. The conclusion: tying people to jobs does indeed reduce their wages, by preventing people moving to find better jobs. Worth keeping in mind.

Chart of the week…
While social media is ruining our productivity, it is at least enlivening our travelling time to and from work. And that’s no bad thing, given new ONS figures out this week showing that the number of people who take over an hour to commute to work has grown by around a third since 2011. Of course, longer commutes are normally a trade-off for higher pay, hence the ‘gender commuting gap’ identified by the ONS. But millennials seem to only be getting the duff end of this trade-off, as our chart of the week shows. Our Intergenerational Commission found that millennials are on track to spend 64 more hours commuting in the year they turn 40 than the baby boomers did at that age. And yet their earnings are no higher than the generation born 15 years earlier at the same age. Still, at least they’ll have the time to read every report in this email…