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A summary of new research by the IMF shows income inequality has increased in most rich countries in recent years.
Taxes and transfers "have played a significant role in offsetting the increase in inequality." Over the last two decades fiscal policy has reduced inequality by about a third in OECD countries – but the impact has weakened since the mid-1990s.
"We find that the reduction in the generosity of social benefits (particularly unemployment and social assistance benefits) and lower income tax rates, especially at higher income levels, have contributed most to the reduced impact of fiscal policy since 1990s."
This makes the likely impact of austerity worrying, but "fiscal policy can be used to mitigate the adverse impacts of consolidation by allowing automatic stabilizers (such as unemployment benefits) to work, protecting the most progressive social benefits, removing opportunities for tax avoidance and evasion, and increasing reliance on wealth and property taxes." -
Ben Baumberg relays a new Spartacus report, showing that as many as 1 in 10 of all new car sales in the UK are paid for using the Motability scheme, which will be hit hard by the replacement of Disability Living Allowance by the new Personal Independence Payment.
This is likely to mean 30,000 fewer car purchases a year – equating to about 1,000 jobs in the industry.
At the same time, a survey found that 29% of recipients said that Motability had helped them keep a job, and 9% that it had helped them get one. If the sample is representative of all Motability users, the scheme keeps 68,000 people in work.
"Spartacus estimate that cutting disability benefits will save the Government £640m but reduce GDP by £660m, as well as reducing quality of life for disabled people and the people that help care for them. "
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Our own Craig Berry writes on Left Foot Forward that for the government’s current economic strategy to work it requires increased private consumption and indebtedness at the household level. But their own public austerity agenda is prohibiting them from being open about their approach.
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Jonathan Portes notes that the Government announced a massive extension of Mandatory Work Activity on the same day on the same day they published an assessment whose key conclusions were “that MWA had a small and transitory impact on benefit receipt, and no impact on employment.”
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Imagine that jobs were randomly distributed and work out what proportion of households in a country would be jobless – is the actual figure higher or lower?
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In 1968 the TUC celebrated its 100th anniversary. (Indeed yesterday (June 1) was our 144th birthday.)
This was marked not just by the TUC, but by the nation.
A grand banquet was held in London (as well as many other more accessible events around the country.) It was addressed by the Queen and broadcast by the BBC.
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XpertHR have a comprehensive round-up of reactions to the Beecroft report – many from a professional HR perspective. Most are unimpressed
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Flip Chart Fairy Tales Rick has another go at Beecroft
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Chris is not impressed with Beecroft
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Rick is good on Beecroft
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Bloomberg reports that “France finds itself in a sweet spot, drawing the strongest auction demand since the European debt crisis began in 2009 as bond investors give Francois Hollande, the country’s first Socialist president in 17 years, the benefit of the doubt.”
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A brilliant post by Jonathan Portes on trhe Not the Treasury View blog.
He says: "with long-term government borrowing as cheap as in living memory, with unemployed workers and plenty of spare capacity and with the UK suffering from both creaking infrastructure and a chronic lack of housing supply, now is the time for government to borrow and invest. This is not just basic macroeconomics, it is common sense. "
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In the 'Inequalities' blog, Lindsey Macmillan and Paul Gregg look at the evidence about inter-generational unemployment. There’s lot less than politicians and media sometimes suggest: “only 0.3% or 15,000 households are in a position where both generations have never worked” and in a third of these households the younger generation has been unemployed less than 1 year.
There +is+ inter-generational worklessness, but “it is only in the labour markets with high unemployment that sons with workless dads are disproportionately more likely to be workless than sons with employed dads.” -
Thomas Piketty, Emmanuel Saez & Stefanie Stantcheva look at 18 OECD countries and disputes the claim that low taxes on the rich raise productivity and economic growth. The optimal top tax rate could be over 80% and no one but the mega rich would lose out.
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A new SKOPE pamphlet by Ewart Keep looks at what puts people off training & education (amongst other things).
If people know that they are members of a group or come from an area where people tend only to get lousy jobs (or none) they may not see much point in education & training. Raising the number & quality of jobs available may change their minds.
The UK has a high percentage of graduates working in jobs that don't require degrees: suggests over-supply & is likely to exacerbate problems for those who aren't graduates. If you see yourself as destined for unemployment or a bad job you will be even less likely to find learning attractive.
It is less and less credible to say education isn't producing numeracy & literacy skills. What it does fail to provide are maturity, a positive attitude and work experience – but these are best obtained in workplaces; they really should be seen as employers' responsibility.
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John Monks on Europe's challenges
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