Ah, Ritchie, the gift that never stops giving

Third,we have to pay teaches more.

Well, yes….

However, the rest of it….

The basic argument is that wages paid by businesses like Tesco are too low and that this, plus the lack of tax money being spent on education means that we\’re locked into an underperforming economy by dint of the effects of a) depriviation and b) underspending on education.

The solution is thus that companies must pay more tax to fund education.


But average full time equivalent pay at Tescos in 2008 was under £13,000. Now, I know that might be distorted by pay in Asia – but the majority of employees are in the UK and so whilst pay may be higher than that in the UK on average it remains massively below UK average pay however calculated, which exceeds £20,000 by all measures used. And Tescos are the UK’s biggest private sector employer.

Lambert says that underachievement is linked to free school meals. These can be claimed by anyone with pay of less than £16,040. That’s on average all the staff at Tescos.

So like it or not Tescos, and employers like it, are paying the wages that ensure people claim free school meals which seem to be linked with a lack of aspiration and poor education results.

The solution to this is that there should be…. wait for it…..

The second is to massively reduce differentials in society by serious redistribution of income and wealth

You couldn\’t see that one coming, couldn\’t you?

Now there\’s a logical error here. If we\’re going to talk about how much more redistribution we should have then we need actually to be talking about how much redistribution we already have. We cannot simply look at market incomes and decide that more should be done: we have to look at market incomes plus what we already do to see whether more redistribution is justified or not.

Ritchie of course fails to do this.

But the real howler is here:

Third,we have to pay teaches more. Especially those in difficult subjects. It’s absurd for example that few state schools can offer really good science curricula now. This has nothing to do with quangos or anything else. this is undervaluing education. and business must pay for this by paying more tax.

Firslty, there\’s the question of whether we do or do not pay enough for there to be a decent State education system. Cross country comparisons seem to show that Finland (often rated the best State education system in the world) spends less per pupil than we do (yes, adjusted or standard of living etc). Sweden is rated very well and they also spend less per head than we do. But their structures are different. For example, Finland has something like the grammar/secondary modern split. It\’s not at 11, true, a couple of years later, but there are two different school systems, one for the academic goats and another for the vocational sheep.

It\’s just ain\’t yer Auntie\’s comprehensive system.

Sweden of course famously has school vouchers.

Within country comparisons also don\’t seem to show a lack of resources as being the problem. Private day schools (when you include capital and pensions budgets) seem to have similar costs to the State system. Again, famously in the US, parochial schools have much better results on much lower budgets than the State schools.

So we\’d be justified in at least thinking that perhaps it\’s the structure of the education system, the way the budget is allocated, which is the problem, not the size of the budget itself.

But the truly barking part is that business taxation should rise to pay for the effects on education of low wages.

For as Vince Cable and even Larry Elliott have agreed, businesses don\’t pay taxes. People do. And in an open economy like ours, the largest share (according to the Congressional Budget Office at least, for the US) 70% of the burden of corporate taxation is carried by the workforce in the form of lower wages. Mike Deveraux (who Ritchie would never admit could be right about anything) has a paper out there that a £1 raised in corporate taxation reduces workers\’ incomes by more than £1.

And it\’s this (something I\’ve already mentioned over at Sunny\’s place) which absolutely drives me up the fucking wall about the varied unthinking leftists we have proposing policies.

Some of the goals I share: a better education system being one of them. Some of them I don\’t particularly: equitable distribution in the sense of more equal distribution isn\’t one of the scabs of our society I particularly care to pick. But my ire comes from those proposing things which will be entirely counter-productive. Things which on the surface sound vaguely plausible (Tax companies more to pay to teach Diddikins to read!) but on examination turn out to be barking mad.

Follow Ritchie\’s chain of logic here. Companies don\’t pay high enough wages which leads to deprivation. We should thus tax companies more to pay for the deprived to get a better education.

But on examination we find that the vast majority of corporate taxes come from lower wages for the workers: so the actual suggestion is that we should lower wages in order to deal with the effects of lower wages.

It\’s barking, innit?

13 thoughts on “Ah, Ritchie, the gift that never stops giving”

  1. Philip Scott Thomas

    “Tescos are the UK’s biggest private sector employer”

    “Tescos, and employers like it, are paying the wages…”

    It’s barking, innit?

    Yes. And it’s also flipping illiterate. It’s Tesco. Singular. It takes a singular verb.

  2. “Some of the goals I share: a better education system being one of them. Some of them I don’t particularly: equitable distribution in the sense of more equal distribution isn’t one of the scabs of our society I particularly care to pick. But my ire comes from those proposing things which will be entirely counter-productive.”

    What you see as counter-productive the left do not. You would like equality of opportunity the left would like just equality. Of the Animal Farm variety of course…

    It is unnatural and illogical.

    Aiming for the lowest common denominator is the easiest means to achieve equality (possibly even the only way). All you need do is keep squashing excellence wherever you find it and you will end up with across the board mediocrity. But at least everyone is equal.

  3. But we are categorically not ‘underspending on education’.

    It’s simply that the money is being spent on pointless, idealogically-driven projects and meddling in things that have no business in the educational system, like ‘green isues’ and ‘health issues’…

  4. I despair. I’ve said it here before, and I’ll repeat it: if my Grandfather and his brothers and sisters could be taught in State schools about 100 years ago to read, write and do arithmatic to a standard that would shame todays 16 year olds, for the amount we spent on education in those days, then we can do so again today.

    It doesn’t take a Philosophers stone, or the discovery of some long lost ancient secret, just the practical application of the educational methods that produced results all those years ago. It doesn’t take the billions we spend now either.

  5. As I understand it, Tesco are expected to pay more tax and are berated for paying low wages, so they’re presumably expected to raise these.
    Either we give Tesco a monopoly, putting all those market stalls and farmer’s markets out of business- and then everyone, including the lowly paid, pays more for their food- or Tesco goes bust, pays no-one, pays no taxes. I’m not entranced by either option.
    Further I question the idea that each and every person can benefit from a better education-everyone’s ability to learn has limits whatever their enthusiasm for learning, and some people simply can’t be bothered. Of course it’s from these two classes that the parents of the children receiving free school meals largely come- they all had a chance at school but failed to take it.
    And since we actually need people to staff supermarkets, clean offices, etc. it seems wasteful of their time as well as teachers time and public money to educate them beyond the level that they need or want. And don’t forget that there are many skilled workers who’s skills were acquired after leaving school.

  6. Maybe the State shouldn’t be in Education Provision? Just loan parents the money to educate their own children, and also make sure said children are being educated to a standard.

  7. The IFS have calculated that our tax system is about as progressive as it can be so any further “redistribution ” implies large extension of state control heading towards either world government or closed borders . Education has been hugely well funded and teachers have benefited , the way to pay teachers more is to fire poor ones and until Union grip is ,loosened on the whole corrupt system that is never going to happen.

    Recruitment for teaching is currently a question of beating them off with a stick ,…they should be paid less under the present system .

  8. “70% of the burden of corporate taxation is carried by the workforce in the form of lower wages.”

    Figures. About 70% of returns in the West are captured by labour, and 30% by capital. (Those are BoE figures; in the developing world, the ratio is reversed.) So if you tax profits, then about 70% of the decrease will return to labour.

    I estimate that corporation tax costs the average worker about £845 a year. (70% of £35bn raised shared by 29mn workers.)

  9. Pingback: Tax Research UK » Worstall and Guido can’t both be right

  10. Pingback: Worstall and Guido can’t both be right | called2account

Leave a Reply

Your email address will not be published. Required fields are marked *