Thursday, May 24, 2018

How Towns Are Changing UK Politics

One of the defining issues that emerged from David Goodhart's book The Road to Somewhere was the distinct geographical locations and identities of what he defined as the Anywheres and the Somewheres. The Somewheres are more likely to be found in towns and villages and the Anywheres are more likely to be found in the cities. This geographical split in many ways mirrors the age differences when it comes to voting as villages and towns are getting older while cities are getting younger.

The following chart comes from the Centre for Towns and reveals the changing population structure of towns and cities over the thirty years to 2011.


What is noticeable is how the small towns and communities are ageing. Core cities by contrast not only saw a decline in the numbers of people aged 65+ they had a surge in 25 to 45 year olds. 

What is potentially more worrying are the trends. Since 2000 there has been a marked change in cities getting younger while towns and villages get older. The chart below shows dependency rations, in essence the number of people over 65 for every 100 people of working age.



Many towns are suffering economically, often they were based around single industries that have disappeared and young people feel they have little choice but to move to find career opportunities. The impact of online shopping is hollowing out many town centres and this is accelerating. Marks & Spencer is the latest retail company to announce store closures. The latest stores to be closed include Stockton, Walsall, Northampton and Dover. The UK is becoming a divided country not just in terms of age and education but also in terms of location.

In political terms we are seeing Labour and Remain support grow in major cities but Conservative and Leave support grow in towns. The lead that Labour previously had in towns has been converted into a significant lead for the Conservatives over the last ten years. Equally in many city suburbs Labour are making major gains.




Monday, May 21, 2018

Overwhelming Support For Nationalisation of UK Infrastructure Industries

I previously wrote about how Corbyn's policies were becoming part of the political mainstream. The latest survey data shows that there is significant support for his policies on nationalisation.

A poll published late last year by the Legatum Institute and Populus found overwhelming support for public ownership of the UK’s water (83 per cent), electricity (77 per cent), gas (77 per cent) and railway (76 per cent).

Corbyn may have low personal ratings and Labour may be behind in the current polls but on nationalisation they appear to be in tune with public thinking. While some may argue that the true costs and impact of nationalisation have not been adequately exposed, three quarters of the public currently support Labour's policies in this area.

Trump Not Brexit Drove the Interest in Fake News

The number of articles written about fake news exploded in November 2016 after the election of Donald Trump. The data below from BuzzSumo shows that there were over 10,000 articles about fake news published in November 2016 alone.


It is often assumed that Brexit also drove the interest in fake news but there were very few articles about the topic until immediately prior to the U.S. presidential election. There were relatively few articles published band these gained little interest. In June 2016 not a single article about fake news gained more than 1,000 social engagements (shares, likes and comments).

In July 2016 an article about Naomi Wolf saying Americans have to wake up to fake news published by YourNewsWire was the first such article to gain over 10,000 social engagements.

Since the presidential election there has been an explosion of interest with many individual articles being shared over 200,000 times on social media. The most shared article to date was NPR's "Fake Or Real? How To Self-Check The News And Get The Facts" which has had over 420,000 social engagements to date.

Tuesday, May 15, 2018

Population Declines in Eastern Europe

The impact of the EU's free movement policy is heavily discussed here in the UK, particularly in relation to immigration from Eastern Europe. What is rarely discussed is the impact of this policy on Eastern Europe.

The United Nations latest population projections reveal that the ten countries with the fastest shrinking populations are all in eastern Europe. Since 1989 there have been some significant falls in population, for example:

Latvia        27%
Lithuania   23%
Bulgaria     21%

Many of these population declines started well before these countries joined the EU but the continued emigration to Western European countries has exacerbated the situation. According to the Economist 700,000 Bulgarians live in other EU countries.

Emigration is not the only reason for the decline in population. Fertility rates are very low, they range between 1.3 and 1.6 in the ten fastest shrinking countries. This is not dissimilar from many Western European countries but in these countries the population is bolstered by immigration. By contrast there are low levels of immigration in Eastern Europe. Somewhat paradoxically many Eastern European countries are very resistant to immigration despite falling population numbers, although for many immigrants their desire is to locate in Western not Eastern Europe. Thus a more welcoming approach may not significantly increase numbers.

The UN population projections for 2050 and the percentage declines are as follows:


Monday, March 05, 2018

Five Star and Northern League Gain Half of the Vote in Italian Elections

In 2017 the French far right achieved an historically high share of the vote, with 34% of those voting for Le Pen. The far right AFD are now the main opposition in the German parliament. Yesterday in Italy the populist Five Star Movement and the far right Northern League gained around 50% of the vote between them.


(Image from the Financial Times)

When are Europe's leaders going to wake up to the devastation that their austerity policies have caused? The number of Italians at risk of poverty has risen by more than 3 million since 2008. Youth unemployment in southern Italy is 46.6%. While there has been some economic improvement the young people who have found employment are increasingly on temporary and insecure contracts.


It is no surprise that many of Italy's brightest young people have left due the absence of jobs and prospects.  It is also no surprise that economic insecurity combined with recent migration issues have led to the rise of populist political movements and a resurgence of the far right. These are worrying times for Europe.




Saturday, January 20, 2018

Whose GDP Is It Anyway?

During the UK Brexit referendum there was an exchange which highlighted the differences between experts and the public.

During one debate Europe expert, professor Anand Menon, made the point that leaving the UK would reduce the UK’s GDP which would be bad for everyone. One woman in the audience retorted “That’s your bloody GDP. Not ours.”

The woman was ridiculed by many for not understanding economics and the importance of GDP. However, her analysis was far more accurate than many of the experts. It is simply not the case that a rising GDP tide lifts up everyone. Consider the chart below.


From 2000 to 2013 GDP rose strongly in America but over the same period median incomes fell. Over fifty per cent of the population saw their incomes fall. You can argue all you like about the benefits of increasing GDP but if the additional wealth created goes almost entirely to a small economic elite, it will have little impact on working class voters.

The expert's predictions were also wrong.

After the Brexit vote in August 2016, the Bank of England's economists produced new forecasts. They forecast exports in 2017 would be down 0.5 per cent, despite the devaluation of sterling, that business investment in 2017 would be down 2 per cent and Housing investment would be down 4.75 per cent.

In fact when the Financial Times looked at the year-on-year figures for the third quarter of 2017, exports were up 8.3 per cent, business investment was up 1.7 per cent and housing investment was up 5 per cent year-on-year.

In terms of GDP the UK's growth was also above most forecasts. However, median wages continue to languish which is squeezing living standards. GDP growth may be a good thing but a more equitable distribution of the benefits would be even better.


Wednesday, December 13, 2017

European Attitudes Towards Immigration

The Financial Times has published an interesting article on the rise of the populist right in Europe.

The article quotes a survey released in November by Fondapol, a Paris-based liberal think-tank which found nearly two-thirds of EU citizens believe immigration has a negative impact on their countries.

Britain is often portrayed as ant-immigrant because of the Brexit vote but the Fondapol survey shows that Britons have a more positive attitude towards immigrants than Germany, France, Austria or Italy.





Sunday, December 03, 2017

The Age Divide in UK Politics

The latest poll from Suravtion,  the polling company that got closest to the actual UK General Election result, shows just how much the generations are divided when it comes to politics.

The sampling took place on 30th November 2017 and 1st December 2017.

The poll, with undecided and refused removed, found the following split in voting intentions by age.


Young people appear to overwhelmingly support Corbyn's Labour. The current economy is clearing failing young people from tuition fees to housing and pensions. The Conservatives only have a majority in the over 55s.

Overall Survation have found growing and steady support for Labour and declining support for the Conservatives. The chart below shows how voting intentions have changed over time according to Survation polls.


Saturday, November 25, 2017

Population Polarisation: Younger Cities vs Older Towns and Villages


Polarisation is increasingly a feature of political life. It seems that communities are becoming increasingly polarised as well. The Financial Times published an article this week highlighting new research showing that young people are moving to cities, while older people are moving in the other direction to towns and villages. 

Since 1981, Britain’s main cities have seen net inflows of more than 300,000 under-25s and net outflows of 200,000 over-65s.  By contrast, towns and villages have lost more than a million people aged under 25, while gaining more than 2m over-65s.  This correlates with older people in towns and villages voting Brexit and younger people in cities voting remain.



Sunday, October 01, 2017

Latest Survey Shows That Corbyn Really Is The Political Mainstream

The latest polling from Lord Ashcroft is worrying news for the Tories on the eve of their Party conference.

Last week many were laughing when Jeremy Corbyn announced that Labour is now the mainstream. They are probably not laughing now. The polling below shows clearly how Labour is ahead in all but two of the areas surveyed.



Wednesday, August 02, 2017

What Are You Signalling When You Post, Share and Like Online?

In the online world everything that you post, comment, share or like is a signal. Consciously or unconsciously you provide cues and signals to others online.

What does our online signalling behaviour mean for political discussion, engagement and sharing on social media? Does it lead ineluctably to more division and extreme views? There is some academic evidence that it does.


Online signalling

In navigating the world we use signals and cues to inform us, for example, is someone nice, trustworthy, employable, etc. We may use visual signals such as someone's clothes, height or age as much as what they say. Increasingly though we only know someone people online and have never met them in real life.

According to academic research in a real life personal network the number of people "varies from the low 30s (Hogan, Carrasco, and Wellman, 2007) through to the upper 60s (Boase, Horrigan, Wellman, & Rainie, 2006; McCarty, Bernard, Killworth, Shelley, & Johnsen, 1997) to upwards of 150 (Roberts, Dunbar, Pollet, & Kuppens, 2008), but rarely if ever above that." Bernie Hogan, The Presentation of Self.  However, many people these days have more than 200 friends online, some may have thousands.

We make judgements about these people we only know online, and also about the people we have met in real life, using online signals. These signals may include how many friends someone has, who their friends are, how they interact with their friends, how often they post, what they share, the words they use etc. These cues and signals help us form an impression of someone even if we have never met them.

Online authenticity

Social signalling expert Judith Donath describes online authenticity as actions that which were not intended to signal something or manipulate our impressions.  In judging whether something is authentic, it seems we assess whether it is being done for its own sake i.e. for reasons other than making an impression.

If we want to be seen as authentic or genuine this may lead us to consciously, or unconsciously, try to make our online actions look like they are not signals. In the case of politicians or marketers they may use say a video of a 'real user' or user generated content or ask influencers to share content so that the content sharing appears authentic.

Virtue signalling

The reverse of authenticity is something called virtue signaling. This is where someone shares something or expresses an opinion to demonstrate their good character or standing within a group. Academic studies have shown that people will share a charity fundraising page without actually donating themselves. The purpose of their online activity is primarily about communicating they are a good person. What is interesting is whether this is also true in politics, for example, might people share an article supporting a political position even if they themselves do not actually share the same view.

Tribal signalling and reinforcement

Tribal sharing is where someone shares to enhance their standing in a group or to simply to show they are part of the tribe. I have a concern that the tribal dynamics of social media may be shaping political discussion and activity, and not for the better.

For example, when sharing or liking content for the purpose of tribal sharing, it is possible that more extreme content may be the most effective in signaling you are a member of the tribe. As Judith Donath explains in this CNN article it doesn't matter so much if the story is fake or dubious if it reinforces your place in the tribe. What matters is that the act of sharing cements your position in the tribe. In fact sharing a false or questionable story may actually enhance your standing as it shows your faith and commitment.

Proving you are a member of a tribe can also lead to more extreme views. For example, posting a balanced comment saying there are some good points in the other camp's position or viewpoint is not the best way to reinforce your position in a tribe. If you want to signal your tribal commitment it may be better to post something along the lines that you hate what another politician or party is doing, or you are outraged by their decisions.

Echo chambers and extreme views

I am personally not taken with some of the arguments about echo chambers. There is evidence that people are exposed to a wider range of views via Facebook for example, than in their local community or reading a particular newspaper. However, there is evidence that your views can become more extreme if you do live in an echo chamber where all your social media friends have similar views.

Cass Sunstein in his book 2002 book, Risk and Reason analyzed information cascades and group polarization. He observed that in a group a person may want to earn social approval or avoid disapproval. In such a case if a group is alarmed by something say Brexit or Fracking Or immigration or the election of Trump, Sunstein argues individuals may not voice their doubts about whether the alarm is merited, simply in order not to seem obtuse, difficult or indifferent. He says "sometimes people take to speaking and acting as if they share, or at least do not reject, what they view as the dominant belief. .. the outcome may be the cleansing of public discourse of unusual perceptions, arguments, and actions."

I think more importantly Sunstein observed that when like-minded people are talking mostly to one another their discussions will move them, not to the middle, but to a more extreme point of view. He says "If members of a group tend to believe that for cancer, the serious dietary problem lies in the use of pesticides, those same people will tend, after discussion, to have a heightened fear of pesticide use." This is an example of group polarization which Sunstien describes as "a process by which people engaged in process of deliberation end up thinking a more extreme version of what they already thought."

The political impact of online signalling

It does appear that both tribal signalling and participation in like-minded social networks (even if not true echo chambers) can lead to the sharing of more extreme political viewpoints and the sharing of content of dubious origin or false content.

I am not sure if this is correct but it does appear consistent with my experience of social media and political discussions.

So what are you signalling when you share, comment or like a post on Facebook? Do you share to be part of a tribe? Or to support members of your tribe?  Is your social network full of like minded people? Do you stay quiet when you have questions? Is political discussion more polarised or is political disagreement avoided?

I think these are questions for all of us to consider.





Saturday, July 22, 2017

How The World Is Changing

This week I read two articles which outlined very clearly how the shape of the the world is changing. The first was by Martin Wolf in the Financial Times. The article used six charts to show how the developed world was losing out to the developing world. The second was Harvard Business Review's new global digital competitiveness index.

I have set out below just three charts from these articles which demonstrate how the balance of world economic power is changing.

1. Global GDP

This chart shows changes in the share of global GDP and a forecast to 2022. We can see a steep decline in Europe in particular but also other high income countries. We also see a decline in non-asian developing countries such as Africa. The big growth is China, India and developing asian countries.


2. Global Digital Competitiveness

The chart below is Harvard's digital competitiveness index. It plots current digital adoption against the rate of change in digital evolution. The analysis argues that in many European countries, along with Australia and South Korea, there is high digital achievement currently but a low rate of change. These countries face challenges in sustaining growth.


There is significant change taking place in countries such as China, Malaysia and Russia. Amongst current high achievers change is fastest in UAE, New Zealand, Singapore, Israel and the UK.

3. Global Population

This next chart shows global population shifts project to 2050. Europe has one of the biggest declines although China is also experiencing a decline. The greatest population growth is in sub-Saharan Africa (more details on Africa's population growth here) where we are also seeing a declining share of global GDP.  If correct this will likely result in further mass migration from Africa to Europe as people seek a better life and as Europe struggles with an ageing population and falling GDP.




Monday, July 03, 2017

Is Corbyn Right To Support The Pensions Triple Lock?

I am not a Theresa May supporter but her election pledge to end the pension Triple Lock was principled if suicidal, given most older people support the Conservatives. By contrast Jeremy Corbyn has committed to maintaining the triple lock until at least 2022.

The Triple Lock policy guarantees pensions rise by the same as average earnings, the consumer price index, or 2.5%, whichever is the highest. It is was clearly a policy designed to attract the voting power of baby boomers.

Average working incomes have barely risen at all in the last ten years. At lower levels they have been held down by low cost labour from Eastern Europe and immigration, job insecurity and the gig economy, low unionisation and public sector pay cap policies. By contrast the triple lock has increased pensions.

In 2011 the median disposable income of pensioners crossed that of working people, as shown in the chart below.


However, the real issue here is not the Triple Lock but the very low incomes for working families. The lock has had the very real benefit of reducing pensioner poverty, which is to welcomed.

There is an important concern about inter-generational inequality. Over a lifetime people acquire two main assets, their pension and a property. Young people are unlikely to acquire the same pensions or the housing wealth of previous generations.

Young people will pay through their taxes to support the unfunded public sector pensions of the NHS, teachers and civil servants. These liabilities have been estimated at up to 1.85 trillion pounds, so young people can expect to be paying taxes to support these public sector pensions for some time to come. These same young people are unlikely to benefit from the same defined benefit schemes that baby boomers enjoy. They will also be unable to retire in their 50's and 60's as boomers can.

Furthermore the cost of unfunded public sector pensions is deliberately understated. Pensions expert John Ralfe says the boomer "generation of taxpayers is not paying the full cost of the public services it uses, but passing it on to be paid by future generations — taxation without representation on a massive scale."

In private companies the wages of the young will be held down to pay contributions to the deficits of generous former pension schemes. Ironically many of these schemes are now closed to younger people.

In addition to the cost of unfunded public sector pension schemes young people will also need to pay taxes to fund the rising cost of state pensions and increases in health spending, caused in large part by growing numbers of older people. See estimates from IFS below.



When it comes to housing, the failure of recent generations to build housing, combined with tax discounts for landlords, has increased the cost of housing and priced many young people out of the market.

As a society we urgently need to address the issues of inter-generational inequality, however, we mustn't blame policies such as the Triple Lock. There are more fundamental drivers of this inequality.

Maybe greater voting by young people will finally force the government to give these issues some serious attention.



Tuesday, June 27, 2017

Corbyn and the Single Market

“I vote against the Maastricht treaty again tonight, primarily because it takes away from national Parliaments the power to set economic policy and hands it over to an unelected set of bankers who will impose the economic policies of price stability, deflation and high unemployment throughout the European Community.” 

These were the words of Jeremy Corbyn in the 1993 parliamentary debate on the Maastricht Treaty. Some may see his words as prescient with youth unemployment still at 24% in France, 35% in Italy, 41% in Spain and 45% in Greece. (source: Statista)

The Maastricht vote was ten years after Corbyn was first elected as an MP. At the 1983 election he campaigned vigorously for the Labour Party manifesto commitment to leave the EEC. The party manifesto argued that the EEC was a clear obstacle to the implementation of the radical socialist policies which the then leader Michael Foot proposed.

It has long been the view of the radical left, such as Tony Benn and Corbyn, that the EU and its institutions including the European Central Bank and the European Court of Justice are designed to be beyond the reach of democratic accountability and to support the needs of global companies in a capitalist market. This is not to say that don’t care about human rights but that the needs of companies come first.

The left would quote many instances where the ECJ has ruled against worker collective agreements and imposed limits on strike action by unions. For example, in a case with Lewisham Council they ruled that trade union collective agreements incorporated into the contracts of employees should not be protected when the service was privatised and transferred.

They would also quote cases where the ECJ has protected the rights of companies to transfer work to lower cost European locations and impose the conditions of a cheaper jurisdiction, such as the Viking case. In this case the ECJ also ruled the right to strike could infringe a business's freedom of establishment under the Treaty on the Functioning of the European Union article 49.

Corbyn does recognise the benefits of trade agreements and single market tariff free access and has argued strongly for access to the single market. However, radical left politicians such as Corbyn do not want to be part of the single market. They are critical of single market rules to force ‘open public procurement' and competitive tendering within the EU. These rules are enshrined in the EU's Lisbon Treaty, and promote privatisation in public services. It has also been argued that the First Railway Directive which promotes 'liberalisation' and competition for railway and freight services in the EU, would prevent Corbyn renationalising the railways.

Corbyn’s proposals for more state intervention and to protect fledgling businesses would also test single market rules and may, or may not, be allowed by the ECJ.

Corbyn would recognise the importance of the single market rules in protecting health and safety through common standards and workers rights. However, many on the left would argue that these rights, including maternity rights, were won by workers and unions, and many existed prior to the EU. While many are fearful that a Tory government would reduce workers rights outside the single market Corbyn would look to go further.

Corbyn remains very critical of the EU’s austerity policies, as he was in 1993, and would cite evidence that these austerity policies increase inequality by redistributing wealth from workers to asset owners. This evidence points to significant increases in the wealth of the elite while the poor get poorer, which appears self-evident.

Finally, Corbyn is aligning himself with working people. The detailed polling by Lord ashcroft shows that the majority (64%) of working class C2,D and E voters in the referendum voted to leave. Only in the AB social group of professionals and managers was there a majority who voted to Remain.

For all of these reasons it seems likely that Corbyn will continue to call for access to the single market but not to be part of it.


Friday, June 23, 2017

Africa's Population Growth

I listened to a podcast from the London School of Economics last week about the end of globalisation. However, what really caught my attention in the talk from Stephen King, senior economist at HSBC, was the level of population growth in Africa. This prompted me to look at the data.

According to the UN's 2015 projections the median world population projection scenario in 2050 is as follows:
By 2050 the population of Africa will increase by an estimated 1.3bn. This is far higher than other continents and is due to higher fertility rates (average number of children born to a woman over her lifetime) as we can see below from the CIA's 2015 world factbook data.



Life expectancy in Africa has increased from 36 to 57 years of age since 1950. At the same time birth rates in Africa have not fallen as fast as experts anticipated. In Niger the average number of children a woman is likely to have in her life is still more than seven. The country’s current population of 21 million is projected to grow to 72 million by 2050. It is forecast to continue growing by 800,000 people every 18 weeks to over 200m by 2100.

This population growth creates many different challenges. Stephen King talked about potentially high levels of migration to more developed countries when populations grow. The UN projects the net number of international migrants to more developed regions during 2005–2050 to be 98 million. However, in these more developed regions deaths are projected to exceed births by 73 million in the same time period.

Thus the overall population numbers in the developed world may not rise significantly, but there are likely to be large changes in the make up of populations.

The big challenges will be in Africa itself as rapid population growth puts pressure on infrastructure, housing, health and education. However, Africa also has the potential to be an economic powerhouse through access to education, investment and good governance. Optimistic economists believe the continent is going to benefit from a “demographic dividend”, a rapid increase in economic growth which often occurs when the number of people employed is significantly higher than the number of children and old people.


Monday, June 19, 2017

Labour Lead For First Time In Survation Poll


Survation's latest poll now shows Labour support at 44%. This gives Labour a national lead for the first time, 3% ahead of the Conservatives.

Survation was the most accurate polling company during the election and predicted a Tory lead of just 1%.

Macron Wins Parliamentary Majority But Not Popular Support

In the first round of the Presidential election Macron came top with 8.656m votes, 24% of the votes cast or 18% of those registered to vote. Macron's big challenge was to build on this victory and grow support for himself and his party En Marche.

Despite winning a large majority in Parliament yesterday, Macron failed to grow his support. Just 7.26m voted for En Marche yesterday, in an election where turnout was historically low. In total 8.93m people voted for En Marche and their partners the Democratic Movement. This represents just 18.76% of those registered to vote. This is up on the 18% he won in the first round of the Presidential election but only marginally.

A detailed look at the votes

In the second Presidential round Macron was up against just the far right leader Le Pen. He won this comfortably with 66% of the votes cast to Le Pen's 34%. However, a large part of this vote was a vote to keep Le Pen out and not a vote for Macron. An Ipsos Mori poll found that 43% of those voting Macron did not support him but voted for him in order to keep Le Pen out.

This implies 12.1m were positive votes for Macron. A significant step up from the 8.656m votes he won in the first round and a sign of growing support.

In the first round of the Assembly elections Macron and his coalition partners the Democratic Movement won 32.2% of the votes cast but only 49% of the population voted. Thus Macron's En Marche only won 6.4m votes or 7.323m votes with the DM. This larger total is still less than he received in the first round of the presidential elections or 15.4% of those eligible to vote.

In the second round of the Assembly elections, which is only contested by parties with larger support, Macron's En Marche party won 43% of the vote and their allies the Democratic Movement won 6% of the vote. This translated into 60% of the Assembly seats, see the table below, so a substantial parliamentary majority.

However, only 42% of people voted, an historic low. Thus En Marche won just 7.8m votes, still less than Macron won in first round of the Presidential election. Macron and the DM together won 8.93m votes which was only 300,000 more than Macron won in the first round of the presidential election. It represents 18.76% of the 47.3m there were eligible to vote in the election.




Saturday, June 17, 2017

A Decade of Declining Wages

74.8 per cent of all working-age people in the UK are now in work, 31.95m people. Unemployment is just 4.6 per cent, the lowest since 1975. On the surface this might indicate that people are benefiting from the economic growth of recent years. However, employment is no longer a good indicator of prosperity.

In March 2008, the average basic weekly wage, excluding bonuses, was £473. The average basic weekly wage, adjusted for prices, is now £458. So almost ten years on, average wages have declined.

According to the Resolution Foundation, the 2010s are on course to be the worst decade for wage growth since 1805.

Employers have ruthlessly squeezed the wages of average workers. Some initially put this down to the financial crash and public sector wage restraint. Others have pointed out to the free movement of people from the EU which effectively provided employers with an abundance of low wage workers from Eastern Europe.

The chart below shows UK average weekly wages from the Office of National Statistics.


The latest official forecasts suggest that even by 2021 the average worker will still earn less than they did in 2008.

The reality is that employers started squeezing pay before the financial crash particularly in the US and are continuing to do so. The chart below shows US GDP and median household incomes. In essence despite GDP increasing, median incomes have fallen, as the benefits of economic growth are not evenly shared.



Far from economic wealth being shared equally employers are reducing pay and benefits. Back in the 1960s families were able to live off a single wage, there was relatively secure employment with reasonable pensions. Today wages continue to decline, there is more job insecurity in the gig economy and pension schemes have been cut back significantly.

Economist theories about wages growing as the economy improves are just that, theories. Private sector employers continue to pay low wages despite the fall in the jobless total. An increasing number of workers are negotiating individually without any collective bargaining. Trade union membership fell by more than a quarter of a million last year to 6.2m, the largest fall in more than twenty years. UK employers can tap into a large pool of European unskilled, deunionised, insecure workers.

The Bank of England’s latest forecasts predict that inflation will recede next year and wage growth will strengthen to 3.5 per cent thanks to the tight labour market. However, along with many economists I remain sceptical.


Friday, June 16, 2017

Women In UK Parliament

I was apprehensive about seeing more women in Parliament in the UK at the start of the election, partly because there were over 100 constituencies where there was no female candidate for any party.

However, there has been a small increase in the number of women MPs in Parliament following the election. This at least continues a trend towards more equal representation but we still have a situation where over two thirds of MPs are men.



The Labour Party now has 45% women MPs more than double the percentage of Conservative MPs.




Monday, June 12, 2017

May and Macron: A Tale Of Two Electoral Systems


"It was the best of times, it was the worst of times."

Charles Dickens introduction to A Tale of Two Cities could be used to describe Macron's and May's feelings following the UK and French elections this last week.

Macron is set to win up to 440 of the 577 seats in the French National Assembly, an overwhelming majority. By contrast May lost her majority, winning 318 of the 650 seats in the UK parliament.

However, in terms of vote share:

  • Macron won 32.2% of the votes cast in France on Sunday, where 49% of the population voted.
  • May won 42.4% of the votes in the UK election, where 68.7% of the population voted.

When Macron won the second round of the French Presidential election, 43% of those that voted for him stated they were voting to keep out Le Pen. This meant that Macron potentially only had support from 12% of those eligible to vote. At the time I commented that Macron's biggest challenge would be to grow this support.

Sunday's results appear to show that Macron and his allies won votes from just 15.8% of those eligible to vote. Under the French electoral system this will deliver around 75% of seats in the French Parliament. This is in part due to the vote split and the poor performance of other parties, Les R├ępublicains won 21.56% of the vote cast, the Front National won 13.20% and the Socialist party won just 9.5%.

Clearly political parties have to campaign and work to their electoral system. Translating votes into seats varies significantly from system to system. However, the raw vote share results in France show that Macron actually won far less support than either May or Corbyn. This suggests that Macron will need to wield his majority sensitively in the new Assembly.

It is also worth remembering the full quote from Dickens in A Tale Of Two Cities: "It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness."