[DaveO]

Re: Deregulation, casualisation and low pay: how will it wor : Wed Oct 02, 2013 12:49 pm  

Sal Paradise wrote:

As we strive for efficiencies in the work place through process improvements then casualisation will be a consequence as firms are more targeted and strategic about how they use labour. It is in everyone's interest that firms prosper would we rather they employ more at lower wages or less on higher wages? Labour flexibility really gives firms competitive advantage. To work properly the employee needs to be guaranteed at set monthly income but with variable hours to match demand within WTD. So they will work 1820 a year for £30k for example, they will get £2,500 ever month but they could work 120 hours one month but 200 in another..

That is not casualisation. That is a salaried job! It's not dissimilar to how my working life has gone for over 30 years. I put the extra hours in when deadlines loom and systems go live but at other times I work normal hours and even work on stuff that isn't generating any revenue directly which I suppose you would call R&D.

Casualisation is when the employee is not required they earn no money.

Today Cameron is saying the pursuit of profit is not evil. Well it is if the pursuit of profit means you employ Workfare staff at the expense of salaried employees and/or move to a casualised workforce IMO.

The problem as I see it is firms are not happy to simply prosper as you put it but they always want to maximise their profits. The two are not the same thing. The pursuit of maximum profits is what leads to calls for employment rights to be eroded and increased casualisation as firms try to eek out the very last penny of profit.

Now I know it's a legal requirement to maximise the return for shareholders in a publicly listed company but this is where regulation comes in. Capitalism can't be left to run unfettered by a lack of regulation because if it is you will get abuses from the likes Argos taking on workfare workers at the expense of full time staff. It would be fine to maximise profit within the framework of laws that protect employees from exploitation.

This is not what the Tories want and their supporters in big business want despite plenty of evidence that if you treat your workers poorly you lose out as a business and does nothing for the economy.

Re: Deregulation, casualisation and low pay: how will it wor : Wed Oct 02, 2013 3:54 pm  

First: thank you to both Dally and Sal for your responses here.

This was never really aimed at you guys, because you do engage. And you've shown it again here.

Four pages in, though, and we see no responses at all from some who, on other threads, are very quick to damn the ideas of others n politics and economics. Your absence illustrates your lack of any ideas or interest in genuine intellectual debate.

Sal - I think that Dave O has dealt with the queatio. Of casualisation, but I suggest that your post illustrates a wider-spread misunderstanding about what that is, as opposed to flexibility, which can be good for both employer and employee and, therefore, the greater economy.

For clarity, I'm not opposed to flexibility per se, but to situations where workers do not have any guaranteed hours or, therefore, income. That cannot be good for the economy. I've been on commission. Only, and I could not have survived were it not for my parents being generous about my rent. There were weeks when I hardly earned enough to pay my train fare to and from work. That is not good for the general economy: if I earn more, for instance, I might be able to afford my own accommodation and, indeed, afford to be able to buy things - even if it's only the odd pint.

I know I'm not the only one who remembers, back in the '70s, the predictions that we would, by now, be in a situation of people working fewer hours, as a result of technology, but still having an income that allowed them to actually not worry and, indeed, to be able to explore other things in life.

Where did that change and why?

The UK remains the sixth richest country on Earth, yet we have growing numbers of foodbanks and Save the Children spending money here.

I'm not opposed to home ownership - by a long chalk - but why is it cited as if it were the one true way? What's wrong with rent? Plenty of other countries do it - and do it better than us.

I posted a link a day or so ago about garment producers in the US bringing jobs back in to the US because of demands for better quality and also for the greater flexibility that having a home-based industry offers over one several thousand miles away.

Are we set to reassess the relationship between quality and cost? What would that mean for domestic industries?

The are loads of interesting questions - and I really wouldn't even pretend to know the answers to all of them - but what pisses me off is the kind of approach that tries to pretend, for instance, that there are enough jobs out there for all the people who need one. El Barbudo has dealt with that elsewhere, better than I ever could.

Re: Deregulation, casualisation and low pay: how will it wor : Wed Oct 02, 2013 4:27 pm  

Mintball wrote:

...I know I'm not the only one who remembers, back in the '70s, the predictions that we would, by now, be in a situation of people working fewer hours, as a result of technology, but still having an income that allowed them to actually not worry and, indeed, to be able to explore other things in life.

Where did that change and why?..

The technology has indeed resulted in needing fewer people for the same (or vastly greater) production, in manufacturing at least.
However, the benefit hasn't meant that people work less time for the same money in a lovely sepia-tinted Bournevillian utopia, instead the slack has been taken to pay ever higher dividends to shareholders.
That would be all well and good where the shareholders are spread across society but, unfortunately, they are not.
Shareholdings, whether in personal holdings or in pension funds, unsurprisingly follow the same pattern as we see in the cash "haves" and "have-nots".

Companies only think about the one company but what appears to be good for that company within its own narrow remit is not always what is good for society ... or even possibly, in the longer term, good for that company.
Reducing wages and shedding staff, for example, can reduce unit cost but at the same time shrinks the market and contributes less to the public purse in tax-take.
The company might think that they are only shedding a few thousand staff but multiply that by many companies doing the same thing and the market is shrinking.
Speaking of tax-take, again for the benefit of shareholders, it is often pretended that profits are offshore, to reduce tax which again reduces the tax-take to the public purse.(*)
As DaveO says above, that is where legislation comes in.

(*) A good example would be Walkers Crisps which used to buy spuds from Lincolnshire, make them into crisps, sell them and make a profit, which was taxed accordingly.
Then, when Pepsico bought Walkers, exactly the same basic manufacturing system was used, same spuds from Lincolnshire, same factory, same crisps etc etc ... except that now, the parent company is in Switzerland (Frito-Lay Trading GMBH) and they buy the spuds from Lincolnshire and they own all the crisps to resell into the market, the Walker's factory now being a mere subcontractor making crisps for Frito-Lay.
Walker's make just as many crisps but profits (on paper) halved, as did the tax they paid.
Do the spuds or the crisps ever visit Switzerland? No.
Is the crisp factory in Switzerland? No.
Who owns Walker's? Frito-Lay do.
So Frito-Lay don't actually DO anything for Walkers, they merely exist to reduce the tax bill.
Just having a parent company overseas gives the opportunity to reduce tax (see also Starbucks, same principle, just charging their own subsidiaries for spurious services and intellectual property)

None of this has actually changed what really happens, all that has changed is the virtual path the money takes.
Again, as DaveO says above, that is where legislation comes in ... or should !

Re: Deregulation, casualisation and low pay: how will it wor : Wed Oct 02, 2013 7:26 pm  

Mintball wrote:

First: thank you to both Dally and Sal for your responses here.

This was never really aimed at you guys, because you do engage. And you've shown it again here.

Four pages in, though, and we see no responses at all from some who, on other threads, are very quick to damn the ideas of others n politics and economics. Your absence illustrates your lack of any ideas or interest in genuine intellectual debate.

Sal - I think that Dave O has dealt with the queatio. Of casualisation, but I suggest that your post illustrates a wider-spread misunderstanding about what that is, as opposed to flexibility, which can be good for both employer and employee and, therefore, the greater economy.

For clarity, I'm not opposed to flexibility per se, but to situations where workers do not have any guaranteed hours or, therefore, income. That cannot be good for the economy. I've been on commission. Only, and I could not have survived were it not for my parents being generous about my rent. There were weeks when I hardly earned enough to pay my train fare to and from work. That is not good for the general economy: if I earn more, for instance, I might be able to afford my own accommodation and, indeed, afford to be able to buy things - even if it's only the odd pint.

I know I'm not the only one who remembers, back in the '70s, the predictions that we would, by now, be in a situation of people working fewer hours, as a result of technology, but still having an income that allowed them to actually not worry and, indeed, to be able to explore other things in life.

Where did that change and why?

The UK remains the sixth richest country on Earth, yet we have growing numbers of foodbanks and Save the Children spending money here.

I'm not opposed to home ownership - by a long chalk - but why is it cited as if it were the one true way? What's wrong with rent? Plenty of other countries do it - and do it better than us.

I posted a link a day or so ago about garment producers in the US bringing jobs back in to the US because of demands for better quality and also for the greater flexibility that having a home-based industry offers over one several thousand miles away.

Are we set to reassess the relationship between quality and cost? What would that mean for domestic industries?

The are loads of interesting questions - and I really wouldn't even pretend to know the answers to all of them - but what pisses me off is the kind of approach that tries to pretend, for instance, that there are enough jobs out there for all the people who need one. El Barbudo has dealt with that elsewhere, better than I ever could.

I have stated on other threads I do not agree with zero hours contracts the only way that can work is if the rate is so high e.g. consultancy that people can afford to work less hours and companies pay a premium for the opportunity cost of employing in that manner.

Maybe if this becomes more prevalent it might actually drive wages up as firms compete for the best casual labour around rather the current inefficient fodder than fills the work place. Perhaps we will see hoards of self employed experts who sell their labour at a premium to a number of employers. An example - a firm has minimum demand of four days a week 24 hours a day 52 weeks but has peaks in demand from September to December and March and April where they need 24/7. They would employ minimum staff to cope with 4 days a week but employ experts/consultants Sep-Dec and Mar-Apr at a premium.

This way they are able to flex capacity with no longer term obligation and no hit to performance. Because most industries have a specific demand cycle demand for expert labour would be high which would drive labour cost upwards. Because it is very specific the firm could alter their cost/sell rate to reflect the higher cost and charge a premium at certain times of year - simple supply and demand curve.

This would seem a bit pie in the sky at the moment but it is a way that casualisation could work.

On home ownership it is cited as one way true way because it is - why invest time and money in a property for someone else to benefit. Most people if they had the choice and the finances to do so would own their own house. If you buy a house and do not move, historically the cost of the mortgage has reduced as a % of your income over the length of the mortgage to a point where it is paid off. With rent it never stops and the rents will only go one way over time upwards to a point where you will have to down size because you can no longer afford to rent it. Also with a purchase you have an asset to sell or pass on.

Re: Deregulation, casualisation and low pay: how will it wor : Wed Oct 02, 2013 8:40 pm  

There will be few on here who have ever seen true casualisation of labour in practise. I have and there is absolutely no place for it in anything purportinh to be a civilised society.

When to be sure of a chance of a day's work tomorrow, it was expected that you bought the foreman/ganger his beer tonight. Even then you might be left to fight it out with another labourer for the last place in the gang. By "fight it out" I really do mean a bare-knuckle fist fight, with the winner taking the last available spot.

It may seem far fetched but I assure you it wouldn't be too difficult to slip back into such games. Especially with this bunch of sociopaths that currntly make up the incumbent government

[DaveO]

Re: Deregulation, casualisation and low pay: how will it wor : Thu Oct 03, 2013 2:40 am  

El Barbudo wrote:

The technology has indeed resulted in needing fewer people for the same (or vastly greater) production, in manufacturing at least.
However, the benefit hasn't meant that people work less time for the same money in a lovely sepia-tinted Bournevillian utopia, instead the slack has been taken to pay ever higher dividends to shareholders.

I am old enough to remember programs like "Tomorrows World" predicting such a utopia.

What they didn't predict was the emergence of neolibralism that has seemingly taken over the world.

When they made those predictions such political philosophy was not on anyone's radar and the idea of a short working week because technology spared us from the long hours was not an unrealistic dream.

It is now because the reality of neolibralism is profit is king and if that means if you work a 70 hour week for next to nothing, well that doesn't matter if profits come in.

Re: Deregulation, casualisation and low pay: how will it wor : Thu Oct 03, 2013 7:41 am  

DaveO wrote:

I am old enough to remember programs like "Tomorrows World" predicting such a utopia.

What they didn't predict was the emergence of neolibralism that has seemingly taken over the world.

When they made those predictions such political philosophy was not on anyone's radar and the idea of a short working week because technology spared us from the long hours was not an unrealistic dream.

It is now because the reality of neolibralism is profit is king and if that means if you work a 70 hour week for next to nothing, well that doesn't matter if profits come in.

Quite so.
I'd like to correct my earlier post where I said that the slack goes to pay ever higher dividends ... that is not always true ... the aim is more usually a higher share price.
Whilst dividends do obviously affect share price, and other factors come into play, rising profitability is the key factor that shorter-term investors (and gamblers) look for as evidence of a well-managed company.

A perfectly healthy company whose profitability remains static will likely see its share price drop ... the share price thereby reflecting the market's view on whether dealers can make a profit on those shares rather than on the actual worth of the company.

So, putting it in very basic terms, companies are run in a way to try to please short-term stock market gamblers who add very little to society but take a cream off the top of what the economy produces.
And then, very often, put their profits through an offshore company and pay next to no tax.

[DaveO]

Re: Deregulation, casualisation and low pay: how will it wor : Thu Oct 03, 2013 10:54 am  

El Barbudo wrote:

A perfectly healthy company whose profitability remains static will likely see its share price drop ... the share price thereby reflecting the market's view on whether dealers can make a profit on those shares rather than on the actual worth of the company.

I have long held the view that if a company is very profitable e.g. Tesco with say a billion quid profit why does it matter if one year it is down from say £1.2bn? It's still one hell of a profit. It's not a loss and there is still plenty of cash there to pay shareholders a dividend.

Phones4U when owned by Caldwell wasn't a listed company and as such it's paper profits year on year were usually a few million but all its staff were very well paid and looked after. Could never have happened if it was listed.

So, putting it in very basic terms, companies are run in a way to try to please short-term stock market gamblers who add very little to society but take a cream off the top of what the economy produces.
And then, very often, put their profits through an offshore company and pay next to no tax.

Absolutely. Back when shares were first created to fund cargo ships bringing goods here from far flung parts of the globe, they were still traded but as I am sure you know those buying them at a premium did so on an assumption that their share of the profits from the cargo would still make it worth their while to buy the shares at the price offered. The profit was in the sale of the cargo not the shares and that profit was realised as soon as the ship docked and the cargo was sold. There was an end to the share trading at this point.

Now traders won't even hold the shares long enough to see a dividend never mind take any actual risk that the company goes bust (or as with the shares in a ships cargo, the ship actually sinks on the way home!).

I saw a good quote regarding comments on Cameron's conference speech that sums up very succinctly where we are today.

"Prime ministers should be able to tell the difference between profit made by investment and innovation in competitive markets and that made by ripping off consumers, exploiting workers, rigging markets and dodging tax."

Absolutely spot on. It was from Frances O'Grady, general secretary of the TUC and I think more and more people are coming to understand profits are coming from "ripping off consumers, exploiting workers, rigging markets and dodging tax."

Re: Deregulation, casualisation and low pay: how will it wor : Thu Oct 03, 2013 11:26 am  

El Barbudo wrote:

Quite so.
I'd like to correct my earlier post where I said that the slack goes to pay ever higher dividends ... that is not always true ... the aim is more usually a higher share price.
Whilst dividends do obviously affect share price, and other factors come into play, rising profitability is the key factor that shorter-term investors (and gamblers) look for as evidence of a well-managed company.

A perfectly healthy company whose profitability remains static will likely see its share price drop ... the share price thereby reflecting the market's view on whether dealers can make a profit on those shares rather than on the actual worth of the company.

So, putting it in very basic terms, companies are run in a way to try to please short-term stock market gamblers who add very little to society but take a cream off the top of what the economy produces.
And then, very often, put their profits through an offshore company and pay next to no tax.

I think the last statement is completely untrue - do you think Justin King is running J Sainsbury on that basis? Most well run companies are focused on delivering long term value to their shareholders - that requires long term strategical planning not fluffing up the edges.

Re: Deregulation, casualisation and low pay: how will it wor : Thu Oct 03, 2013 11:27 am  

DaveO wrote:

I have long held the view that if a company is very profitable e.g. Tesco with say a billion quid profit why does it matter if one year it is down from say £1.2bn? It's still one hell of a profit. It's not a loss and there is still plenty of cash there to pay shareholders a dividend.

Phones4U when owned by Caldwell wasn't a listed company and as such it's paper profits year on year were usually a few million but all its staff were very well paid and looked after. Could never have happened if it was listed.

Absolutely. Back when shares were first created to fund cargo ships bringing goods here from far flung parts of the globe, they were still traded but as I am sure you know those buying them at a premium did so on an assumption that their share of the profits from the cargo would still make it worth their while to buy the shares at the price offered. The profit was in the sale of the cargo not the shares and that profit was realised as soon as the ship docked and the cargo was sold. There was an end to the share trading at this point.

Now traders won't even hold the shares long enough to see a dividend never mind take any actual risk that the company goes bust (or as with the shares in a ships cargo, the ship actually sinks on the way home!).

I saw a good quote regarding comments on Cameron's conference speech that sums up very succinctly where we are today.

"Prime ministers should be able to tell the difference between profit made by investment and innovation in competitive markets and that made by ripping off consumers, exploiting workers, rigging markets and dodging tax."

Absolutely spot on. It was from Frances O'Grady, general secretary of the TUC and I think more and more people are coming to understand profits are coming from "ripping off consumers, exploiting workers, rigging markets and dodging tax."

Traders seldom own shares - they borrow them from the owners at a fee.