Businesses face a fresh tipping point of staff shortages and wage hikes

For years, inflation has not been an issue. Since the late 1990s, annual inflation in the UK has averaged 2 per cent, with a peak of just over 4 per cent. In the US, there was a similar story, with even less variability. This is in stark contrast to the 1970s and 1980s, when the […]

Unemployment has stabilised but there will be economic pain ahead

There are high levels of business optimism. Survey after survey has told us this, from reports from Deloitte on large companies to evidence from the Federation of Small Businesses. Consumer savings are at an all-time high. People are itching to get out and spend the money they have been forced to accumulate. All in all, […]

A tip for Dominic Cummings: Don’t hire anyone who fails to grasp the power of incentives

Trending Topcs

The job advert issued by Dominic Cummings for people to work in government has attracted a wide range of comments. One particular focus has been on the sorts of skills he is looking for. Computer science, forecasting, artificial intelligence, causality theory — all these topics excite his interest. Cummings advocates a small selection of scientific […]

Full employment in Britain has lowered productivity instead of increasing wages

Laziness

The UK jobs market is booming, as the latest ONS figures show. Unemployment is at its lowest for over 40 years. A record 32.1 million people are in employment, a rise of over 3 million since the financial crisis. Apart from in a few scattered pockets, Britain is at full employment. Usually in such circumstances, […]

Beware the dysfunctional consequences of imposing misguided incentive systems

Lehman Brothers Headquarters

Following the disclosure of salaries at the BBC, it has hardly seemed possible to open a newspaper or switch on the television without being bombarded by stories about pay. By pure coincidence, an academic paper entitled “Pay for Performance and Beyond” has just appeared. So what, you might ask? Except that it is one of […]

Believe it or not, Britain is getting happier

Happiness

The dominant economic narrative in the UK is a pretty gloomy one just now. True, employment is at a record high. But, counter the whingers and whiners, zero hours contracts and low pay proliferate. The political discourse is full of the struggles of the JAMs – the Just About Managing The public sector moans about […]

Less austerity will always mean more tax

Austerity

There is a great deal of discussion, following the election, of relaxing or even abandoning austerity. There is an equal amount of confusion about this, because the same word is being used to describe two quite separate concepts. The consequences of the government changing its policy on austerity are dramatically different, depending on which one […]

Don’t fear robots taking your job – worry about them cutting your wages

Robot playing ping pong

Robots and artificial intelligence (AI) seem to be in the news all the time, and breakthroughs are announced regularly. Last year, it was an AI programme which beat the world champion at Go, a game immensely more complex than chess. Now, in the austere American journal the Proceedings of the National Academy of Sciences, comes […]