2014 U.K. Edition
Just kidding; not you dear reader unless you work in app building, robotics or machine language; or as Tom Friedman says, "as long as you are not average". Oh and he also said "Think Like an Immigrant: "We are all new immigrants to the hyper connected world, and new immigrants are paranoid optimists. I better understand what world I’m living in, what the biggest trends are and pursue them with more energy, vigor and persistence than anybody else.”
It should be obvious to everyone that the trend is a new machine software revolution that is capable of replacing not only the middle but the top as well; and Mark Carney, new immigrant that he is, knows the trend.
The Bank of England will cut up to 100 jobs following a 'Value for Money' review, as part of £18m of savings to be made by 2016. The jobs will be cut from the bank's support division, known as Central Services, and equates to roughly 10pc of the workforce in that area. In total the Bank has roughly 3,600 staff. The review, launched last autumn shortly after the arrival of Mark Carney, the Bank Governor, looked at staff deployment and spending and identified savings of £18m to be made by 2016, roughly 10pc of the spending that was under review. Central Services will now be reorganised following the review, providing "new opportunities" for some staff, while other jobs "will not be filled as staff retire or move on". "It is envisaged that there will be between 80 100 redundancies, subject to staff consultation," the Bank said. "The Bank is working closely with the Bank’s union to ensure that affected staff will receive support to find alternative employment." The Telegraph Jan 31, 2014
How long do you think the divergent spread between earnings and housing unaffordability will last?
(see Demographia update for a 3rd party view of value)
The 3 charts above are EOY 2013. Current Charts are here.
...if we stopped competing with low wage producers and turned our attention to our own failing institutions and cruddy infrastructures?
Imagine if we built armies of scientists, engineers and artists and exported value instead of drudgery.
IMAGINE (John Lennon) Recorded live at Mt. Fuji Jazz Festival '91 with Blue Note on Aug. 24-25, 1991
Bass – John Patitucci
Drums – Jack DeJohnette
Piano – Gonzalo Rubalcaba
Debt Fuel Ignition Failure
This 4-chart mashup looks at Canadians (households and business) continuing to vigorously pile on debt at an even steeper angle of acquisition than before the crash into the 2009 pit of gloom.
Canadian business has been busy reducing its labour cost but not fast or deep enough to maintain productivity or create new orders greater than before the pit.
The 5 years of Canadian negative output is a surplus boon to other countries and their productivity programs.
If we are willing to increase productivity to maintain our living standard, but reject reducing our labour cost by the expedience of withering real wages, then we have to build better machines and algorithms for production. That means changing skills from low cost physical labour to comprehensive high value intellectual labour and management combined.
If we are not willing to compete on productivity, debt will take a long time to transform into equity and will be limited in its ability to leverage.
Meanwhile Canadians blithely pile on debt. Are you over leveraged? Figure it out.
Are You Qualified?
Here is a continuation of the theme that North American Labour needs to retrain that I posted about last month from the point of view of who is benefiting from wealth creation.
Now, this chart mashup shows the Beveridge Curve which is the inverse relationship between the unemployment rate and the vacancy rate. It demonstrates that since the Pit of Gloom in 2009, the unemployment rate has been falling while job vacancies have been rising, BUT the counter-clockwise outward shift indicates a higher unemployment rate along the job openings curve. Employers cannot fill job vacancies either because labour is unwilling or untrained. The longer the unemployed remain so, the less likely they will fit the demands of the employer; hence the question "Are you qualified?". Can you retrain while you are idle? Can you move to where the demand for labour is?
Employers are increasingly free to locate near or attract high skill low cost labour from a giant "free trade" low barrier pool.
It's another realization that the compounding effects of multilateral "trade" agreements since post WWII (GATT 1947, WTO 1995) have been changing the value of labour. Since 1994, NAFTA has been the arbiter of disputes via the dispute settlement system known as "Chapter 19" and members have agreed to ignore conventional national judicial review in favour of NAFTA's panel review. The removal of dispute resolution from judicial systems is a hallmark of Capital's ability to not just lobby government but to become government. The latest but not yet manifest "trade" agreement is TPP (Trans Pacific Partnership 2010) which aims to "liberalise the economies of the Asia-Pacific".
TPP meetings and negotiations are kept secret except for what WikiLeaks has managed to publish and ...
... anti-globalization advocates accuse the TPP of going far beyond the realm of tariff reduction and trade promotion, granting unprecedented power to corporations and infringing upon consumer, labour, and environmental interests. One widely republished article claims the TPP is "a wish list of the 1%" and that "of the 26 chapters under negotiation, only a few have to do directly with trade. The other chapters enshrine new rights and privileges for major corporations while weakening the power of nation states to oppose them." (Wikipedia)
History, Charts & Curated Readings
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense
"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'