Archive for the ‘Economics’
UK Employment Situation “Alarming”
I realise that I’ve banged on about emergency funds quite a bit recently, but I make no apology for it, as a disturbing news release by the ILO (International Labour Organisation) last week shouts from the rooftops that the the current employment situation is “alarming” and unlikely to improve any time soon.
40% Out of Work for >1 Year
Traditional wisdom surrounding emergency funds states you should have somewhere between 3-6 months of expenses saved up. Worryingly, the ILO found that more than 40% of jobseekers in advanced economies had been without work for over a year, indicating that it was taking much longer for people to find jobs.
When you consider the Eurozone statistics – Spain’s unemployment rate is almost tipping 25%, France has had its 11th consecutive unemployment rise in as many months, and the UK is expected to top almost 9% over the summer period – things are bleak, particularly with forecasters from Centre for Economics and Business Research (CEBR) today warning it is likely to keep rising for the next 5 years.
Forced Retirement at 65
When you couple this with a recent supreme court ruling that employers can force retirement at 65, and UK company insolvencies are back on the rise again, there has never been a more important period in our recent history to have as much cash stashed as possible.
Public Sector Cuts Backfiring
David Cameron and the coalition government is slashing the public sector, with 20% cuts in almost every department. But it’s ok, because “the private sector will pick up the slack”, he said. Alarming statistics from Markit shows the eurozone composite purchasing managers’ index (PMI) fell to 46.7 in April from March’s 49.2 however, a figure described by Howard Archer from IHS Global Insight as “truly dire” as that indicates the private sector is actually sharply contracting, and not expanding to ‘take up the slack’ in the slightest.
Oh, and in case you missed it, just to add the final insult – the UK is back in recession, too.
Unfortunately in these turbulent times there is unlikely to be any such thing as a ‘safe job’. Certainly some will be safer than others but gone are the days of jobs for life.
Do More, With Less
Companies are demanding more of their employees, and those who are unwilling to give are readily shown the door under the guise of ‘performance management’. After all, there isn’t exactly a shortage of people looking for work.
At least one company I know of takes the view “be grateful you have a job. Now accept this re-trebling of your workload or, you know where the door is.”
I can see their point. Companies need to do more with less. They need to streamline and make efficiencies, else they may not exist this time next year. But how far is too far when it comes to businesses taking their pound of flesh from their employees?
Bottom line: Your emergency fund probably isn’t big enough. Start growing yours today, for a safer tomorrow!
Now I’m not one to encourage smoking or the mass-uptake of the habit by society, but I couldn’t help but wonder what the true story is for the UK economy. I caught a sound-bite from an unknown politician a day or so ago saying something along the lines of “We must eradicate smoking from this country, or suffer the bankruptcy of the NHS.”
Bold words, and an excellent soundbite; it pushes the blame for the National Health Service’s problems onto someone other than the government.
But is the state of the NHS really the fault of the smokers?
Smoking Related NHS Expenditure
The NHS doesn’t keep statistics on what is and what is not ‘smoking related’, so there is a degree of artistic license in painting such figures.
In 2009 a Freedom of Information Act request sent to the NHS estimated that £1.7 billion pounds a year is spent by the NHS on treating smoking-related conditions. The BBC in 2008 estimated it at £2.7 billion.
Revenue from Cigarette Taxes
There are two government revenue streams from cigarettes; Excise Duty and VAT. Approximately 89% of the retail price of a packet of cigarettes goes to the treasury, rather than the manufacturer or retailer. In 2010/11 (bearing in mind cigarettes have gone up twice since then in the 2011 and 2012 budgets – but that is the latest statistic available at present) the treasury profited by £11.1 billion pounds.
We could also say there is a third revenue stream when retailers sell to underage purchasers, and get caught out by police or local authority trading standards agents, with fines applied both on-the-spot of £80 a pop, and larger court-imposed fines when taken further or for repeat offenders. This would be difficult to quantify, however and has been ignored for the purposes of this article.
So, even if we revise the NHS smoking-related costs upward a couple of hundred million to £3 billion, that’s still a net profit of £8.1 billion to the treasury overall.
Benefits Beyond Taxation
I’m going to be a little tongue-in-cheek here, but it is food for thought all the same. Smoker’s on the whole live shorter lives than non-smokers. An unpublished study by a large (>5,000 employer) government organisation (you’ll have to take my word for this one) found that smokers take less sick days than non-smokers (which is why it wasn’t published!), work longer hours overall and are more amenable and adaptable to short-notice changes.
So smokers despite their occasional breaks from the workplace are more focused. They work longer hours thereby effectively negating those additional breaks, are more adaptable and won’t be a drain on their pension for 40 years.
Sounds like a winner all round to me?
So why is the government push push push when it comes to making people quit?