More hours and fewer doughnuts in modern Britain Top of the Charts 18 March 2022 Torsten Bell Morning all, Things are on the up, in the inflation, interest rates and Covid cases sense, making the lives of policy makers (not to mention actual people) a nightmare. It’s the central bankers turn this week. The Bank of England flipped from worrying about the recovery in the autumn to anxiety about surging inflation in the New Year. But yesterday they told us to worry about… both. Yes rates went up 0.25 percentage points but they’ve actually got more nervous recovery-wise. Further increases are now only something that ‘might’ happen (vs being ‘likely’ last month) and any further moves will be ‘modest’. Turns out balancing your worries about the recovery being too strong today (low unemployment) and too weak tomorrow (as inflation hammers incomes and spending) is hard.Next week the Chancellor get’s his go. He’d been looking forward to a quiet Spring Statement celebrating good news on growth and borrowing. Instead, forecasts for a weaker economy and demands for protection for households facing the biggest income squeeze since the 1970s are on the cards. The idea that the pandemic fading would mark an end to all our challenges, political or personal, belongs in the wildly optimistic bucket (see COTW). The only thing not going up? Bookings on P&O ferries, because we’re not exactly in the business of rewarding idiots who model their HR practices on a Victorian workhouse. Have a good weekend, Secure shifts. Raising low earners’ hourly pay via the minimum wage is crucial. But we ultimately care about low earners’ incomes so we also need to focus to on the number and certainty of the hours they work. This issue is highlighted well by a short note from our friends at the Living Wage Foundation that finds too many workers get far too little notice of their shifts (a third get less than a week’s notice) and don’t get compensated properly if shifts are cancelled at short notice (a fifth are affected by such cancellations, and three quarters of low earners lose more than half their pay for cancelled shifts). I’ll always remember a middle-aged guy getting on a commuter train a few years back, with his freshly bought train ticket and lunch in hand. He sat down opposite me, only to get a call cancelling his shift as the train pulled away. My top answer when firms ask me how they can be socially responsible? Don’t be that employer. Troubling trade. While the impact of the Ukraine conflict on oil prices is already with us at the petrol pump, a big question is what the impact may be on food prices (which is much more important for poorer countries globally, and poorer households here in the UK). Listen to the latest Trade Talks podcast for some insights into where a big fall in Ukrainian wheat exports might lead. It draws on the 2010 experience of droughts/wildfires hitting wheat output, leading to producer countries restricting exports that on their own probably contributed to around 30 per cent of total price increases at the time (remember these were the price increases that contributed to the Arab Spring in some big wheat importers). Fascinating/depressing listening. Gay graduates. There are a lot of academics working on inequalities of income/gender/race. But I don’t see many papers focusing on sexuality, in part reflecting data gaps. So read a new paper (free version) that fills some of that gap by focusing on education outcomes. There are two main findings. First, women’s huge educational progress (and now huge lead over men) is largely confined to straight women who now outperform lesbian and bisexual women (the opposite has been true historically). Second, the widely recognised under-performance of boys is bucked by gay students (who are 50 per cent more likely to have many post-graduate qualifications). So, not conforming with gender norms can lead to very different outcomes for men/women. And there’s an important lesson for the academic underperformance of boys. This should encourage us not to treat it as inevitable, but as something overcome by those less bound by a particular form of masculinity. Wonderful writing. Writing Resolution Foundation reports is fun, but we don’t write them for fun. The point is to have impact by informing policy debates, so we put quite a lot of working into ensuring they are written well. Thankfully new research shows the effort involved isn’t wasted. Using two versions of thirty papers written by PhD economists – the original and one that’s got the same content but been edited for language – they show the edited papers are consistently judged as better. They’re eight percentage points more likely to be accepted for a conference, and seen as more likely to get published in a good journal. It’s like I’m always telling the team, you need two things to succeed in life. Excel AND Word. Cancelling CPI. The anti-woke warriors are going to lose it when they see what the ONS have done with the latest update to the basket of goods/services used to calculate inflation. Meat-free sausages are in, coal is out. It wasn’t like this when I was a lad – men were men and knew a proper sausage when they saw one, and you could destroy the climate however you jolly well fancied. More reassuringly single doughnuts are out, not because the country’s on a health drive though, but because WFH means we’re scoffing multipacks. Glad it’s not just me. Chart of the Week The Covid-19 pandemic is over. Well, it is in the case of UK public health guidance and our collective behaviours, even if the virus itself is still very much with us (I say with some feeling having just tested positive after two years Covid-free). What’s kept lots of us going over those two years is the idea that the pandemic easing will solve all our problems. For us humans, that would mean stress down and perkiness up, while the government had a strong economic recovery, topped off with a pre-election tax cut, in mind. But life doesn’t work like that. Our economic outlook earlier this week showed that high inflation will be the defining feature of the exit from this pandemic. It might help the public finances to some degree but will make the years ahead more difficult for household budgets than the pandemic we’ve just lived through. On the personal front, this week’s COTW shows it’s true that Covid is now far less likely to weigh down on our well-being. But that hasn’t translated into our overall anxiety levels falling one jot. The pandemic receding does not take all our personal and policy challenges away.
