Greed + recession = Job cuts

Profit is the making of gain in business activity for the benefit of the owners of the business. An obvious way for an organisation to make more bees and honey is by reducing its expenses.

Experience curve effects are present in almost every industry and the first organisation that makes its way up the curve gains advantages over others within the industry. Early leadership means that the leader’s costs can be reduced relatively quickly to its competitors; that is one way that organisations get ahead and increase their profits. Continuous improvements of processes help organisations to frequently reduce average costs and stuff like that (economies of scale, etc).

The other obvious way to reduce expenses is through the reduction of labour – that’s why I didn’t find it much of a Thailand surprise to hear that insurance company Friends Provident cutting 600 jobs. The other companies are doing it too in the City of London. The paradox here is that when the fat cats keep doing this, just to make more pony, they set up long-term inconveniences for themselves. When a large firm carries out a reduction in headcount this leads to individuals, who do not manage to be re-employed elsewhere, becoming unemployed and dejected. When so many organisations do this it results in increasing levels of unemployment, thus decreasing the market that these firms provide services to. How does this affect the rest of society? A decline in tax revenue and an escalating number of unemployed individuals to support, this would place a greater burden on the state benefit system. A right pickle ain’t it?

The above scenario is a bit extreme really but it shows the problems these organisations contribute to when they prioritise monetary profit over ethical practise. Everybody wants to reduce costs; that’s how they make profit and the major players wanna split it between themselves (fixed earnings for their workers yet variable competitive earnings for the people at top). They have a strong incentive to be greedy and greed drives ‘em to be more greedy, a self feeding circle of greed. The greedier these big companies in London become the more we, the people, suffer. Something needs to be done. Instead of looking at just economic and accounting profit, they should also give a shit about social profit. In reality this situation is made more apparent with the looming recession, which makes only certain that Londoners need to brace themselves for job cuts. The Labour Government will obviously want the inflation rate to be below the threshold target so they won’t be complaining when loads of hard workers are turfed from their jobs.

This is a basic graph showing that whenever unemployment is low, inflation tends to be high. Whenever unemployment is high, inflation tends to be low. This inverse relationship between inflation and unemployment is called the Phillips curve, the “high” and “low” is all relative to the Non-Accelerating Inflation Rate of Unemployment (NAIRU) of the local economy, otherwise referred to as the natural unemployment rate. It’s only natural to offset inflation with unemployment.

There are many other ways to deal with inflation e.g. reducing demand pressures, cost push pressures and money supply pressures... but don’t hold your breath for anything pleasing. If you’re a Londoner working for a greedy employer and you think the organisation is not one of the few that will benefit from the current turmoil in the markets then you better start looking for another job. Good luck!

How to woo a lady

Konnie Huq is one fit bird - she's the one that presented that London Mayoral debate and whose babylons Borris was oogling over. Mind you, I was slobbering too.
I would love to take her out on a date so that I may woo her. I would take her for a drive around my manor, show her what a dump it is and let her expereince what it's like living in rabit hutch housing which one has to pay a bomb for so that she may sympathise. After giving her the tour around my local area I would then take her somewhere nice to eat, perhaps the McDonalds drive thru on Green Lanes (near Manor House) or perhaps I'll go slightly upmarket and take her for a romantic dinner for two at Pizza Hut. I would, at some point, present her with some flowers I would pick up from the flower pot that belongs to the old munter next door. Flowers always do the trick! After dinnner I would then give her a snog and tell her to come back to my yard for a bit of rumpy pumpy. After some the physical activites I would expect my bird to be tired, so I'll ready some hot pot noodle for her and then live happily ever after.

Social inequality in London

The four principles on which Socialism is based on are freedom, equality, community and democracy.

The Labour Party always bangs on about the values of equality and community in its campaigns and political tirades but is equality what we are really getting under the Labour Government?

How much are people in London earning? I read somewhere that, on average, people working in London earn over £45,000. Let me tell you, that ain't the kinda dosh the average geezer in London earns! That is a serious amount of fluffy bunny that only the privileged get to burn. The fromage frais reporting £45k as the average actually based his statistic on the calculation of the mean. I won’t rabbit about mean vs mode vs median concept but, in a nut shell, when you are dealing with skewed data you shouldn’t report the arithmetic mean as your average. With skewed data your mean is influenced by all the outlying data points at the top or bottom (depending which way it is skewed). As one could imagine the earnings data must be a highly skewed distribution, therefore the bloke should have used the median as a measure of the average amount people earn. The median is the middle value that divides the data into halves, half the distribution is above the median and half below. As a measure of high earners and low earners one could use the 90 percentile and 10 percentile values (if you were a cupid stunt in maths at secondary school then you should start learning the bloomin’ basics).

Using the data from the annual survey of hours and earnings for the workplace I produced the chart below. The data shows that there have been Prescott sized changes in the standard of living under New Labour, but not in the direction we would expect it to be. The graph below shows that earnings have increased across the board but most strongly at the top – the gap between the top 10% earners and lowest 10% earners has increased, thus showing that inequality in London is on the rise.

click on chart for larger image

In 1999 the gap between the top earners and low earners was a difference of £36 thousand. In 2007 the gap increased to magnitude of around £56 thousand, a 60% increase.

The data is freely available, I just happened to find it through that ridiculously ‘Von Trappe’ ONS website. I could not find data for earlier periods; it would have been sugar n’ spice to see how the same data series appeared back up when Thatcher and John Major were ruling over us. Anyway, at a later date, I would like to use data on disposable income; the time series for this dataset goes further back in lager and lime.

You may have noticed that the data has not been adjusted for inflation so let’s take a butcher's hook at how earnings in London should have grown according to per-capita GDP, which I’m using as an indicator for inflation rather than the RPI (retail price index).

10 percentile (low income) – Between 1999 and 2007 the 10 percentile earnings grew from £11,809 to £16,150. The relative value of £11,809 using per-capita GDP in 2007 is £16,315. Therefore, in relative terms, the bottom 10 per cent of full time workers are earning less than they did.

90 percentile (high income) – Between 1999 and 2007 the 90 percentile earnings grew from £47,382 to £72,586. The relative value of £47,382 using per-capita GDP in 2007 is £65,462. Therefore the top 10 per cent of earners are earning at least a whopping 10 per cent more than they should.

In summary, despite the lack of information, it is apparent that the gap between rich and poor is increasing. The top earners earned more in 2007 than they did in 1999 and the low earners earned less in 2007 than they did in 1999. Not a very fair society, what happened to social equality then eh? New Labour has taken the working class people of this country as garden tools and given us nothing but pork pies. Under New Labour the rich are getting richer and the poor are getting poorer. How does the current Labour Government then differ from that complete jeb end Baroness Thatcher?

Ban the smoking ban

I make no secret about it - I am very anti smoking ban. I am not a smoker; I just like to have a puff or two once or twice a month when I’m with mates out on the pull. There’s nothing quite like havin’ a puff on the old Bensons whilst holding a Cinderella (Stella Artois) in one hand and buxom young lass in the other.

Anyway to the story – I went to Marble Arch last night after work. Being a man who enjoys the delights of all cultures, I thought I’d get myself a nice lamb shawarma kebab with hummus and the finest melon juice on Edgeware Road. This is the first time I have visited the Marble Arch area of Edgeware Road since the smoking ban and it seriously has had a negative impact on not only the ambience of the place but it has taken away a part of the cultural experience, the sheesha. In the warmer months the problem created by the smoking ban could be surmounted by just having the sheesha on the tables placed outside the front of cafe, but not in January. You must be off your rocker mate.

This smoking ban is more than just causing an inconvenience to the consumer like me; it is also having a negative bearing on the local business in the area. The Government’s policy has done more damage than good in this part of town all because it is of the current attitude of taking us for little kids. I know smoking is bad for the health but surely there must be a way to help these small businesses by making some amendments to the policy relating to smoking in public venues.

In the meantime I decided to go ahead and purchase a hookah pipe for myself, with some easy lighting coal and apple & cinnamon flavoured tobacco I can now pretend to be an appreciator of Middle Eastern culture in the comfort of my living room. Perhaps that will help me pull some more birds.

Liverpool - European Capital of Culture?

So, Liverpool has been awarded the title of European Capital of Culture, 2008? Bollocks! So, them scallies in Liverpool think they are culture vultures all of a sudden? You're havin' a laugh mate. Have you ever met people from Liverpool? All they ever want to do is fight; they are idle losers with nothing else to do in life. You only have to look at the worst football disasters that ever happened in England, all involved Liverpool FC fans (twats). Now you might say it has a wonderful nightlife simply because you pulled some young bird with a mattress strapped to her back but what does that tell you about Liverpool’s female population?

Alright so the Beatles came from there, that doesn’t hide what a completely disgusting shithole the place actually is. You have got to see some of the urban decay there to believe it. In my experience, the only people who think Liverpool is a good city are the ones who were born there and even then a large subset of them think it’s a crap place.

Liverpool contains about as much culture as a slice of toast. London, Manchester, Birmingham... now they are some of the UK cities that one could consider. The only thing that Liverpool is good for is football and that’s only because the little runts have nothing else to do than play football (in between stealing hubcaps and shoplifting).

The real European Capital of Culture is London! You know it makes sense.

TfL closing Shepherd's Bush

The ‘community’ buzzword is all the rage these days, the government loves using that word so much that they even created a government department named after it (Communities and Local Government) but injustices against communities are still happening under the present government. I’m not surprised, after all we do live in a capitalist nation (where major economic decisions are made to benefit private profit-seeking organisations), some will deny it with ifs and buts but it cannot be refuted outright.

Consumerism, one of the tenets of capitalism, puts the needs of consumers before the local community. That is exactly what is being done in Shepherd’s Bush. Transport for London (TfL) announced plans in December 2007 to close Shepherd's Bush on the Central Line for improvement works linked to the new £1.6 billion Westfield shopping complex. The centre is apparently supposed to change the face of retail in London, when it opens in 2008, by accommodating more than 265 speciality shops, over 40 places to dine, a state-of-the-art 14-screen cinema by Cinema de Lux and John knows what else. Let’s face it, consumption is the new English pastime, forget about cricket. I’m not against the idea of developing the centre, it will generate revenue and improve the economy and give more things for people to do but it has costs to the community.

The whole issue surrounding the closure of Shepherd’s Bush underground station for 8 months is that we are seeing economic policies that place an emphasis on consumption being put into practise, thus allowing the free choice of consumers and profiteers to dictate the structure of a local community. Closure of the station for 8 months is putting the shoppers' needs before those of local residents and local businesses. How will local residents get to work? Stupid replacement bus services? Nobody likes doing that and 8 month is ridiculous. What about people who work and travel to Shepherd’s Bush, people who run shops and local services there? What kind of impact will this have on them? 'Inclusion' and 'cohesion' are two other buzzwords that the current government loves to use. Lack of travel facilities is going to cause so much discomfort for the locals, how are their needs being included into this development project? How is there any cohesion between the locals and the developers of Westfield? Well there isn’t and something needs to be done to stop TfL from closing Shepherd’s Bush underground station for 8 months.

Zip cards - the little gits get it!

This has been a long time coming, finally something has been done about the little twats causing trouble on the buses every morning. Today the Mayor of London, Ken Livingstone, launched the Zip Card, a free Oyster photocard that will have to be used by all them bleedin’ runts aged between 11 and 18 year olds who qualify for free bus and tram travel in London.

So what actually is the Zip Card? As of June 1^st 2008 the young buggers will have to touch in on buses and trams and show their photocards on request. This means that young people aged 11+ will need to carry a validated Oyster photocard, which will entitle them to free travel on buses and trams. Not too impressive actually, I’m surprised it took this long for powers-that-be to come up with this scheme. Well I guess it is better late than never, time to catch the little runts in the act, idenitify them and lock the delinquents away for the rest of the duration of their youth (I wish). Actually what will really happen is that the Zip Card will simply be taken away from antisocial brats resulting in no more free travel.

The Zip Card scheme is simply a small step towards making London more pleasant, but at least it is progress in the right direction. Oi Ken! Keep it coming.