Idiot is idiot

Labour productivity isn’t rising very much. Training budgets appear to be falling. So, the Spud tells us:

If you want an explanation for the first graph it’s in the second. We just don’t invest enough in people in this country.

Hmm, perhaps we could devise a solution? What if we reduced the taxation of returns to capital so that people invested more capital so as to raise labour productivity?

But then Spud is the one calling for a 23 percentage point rise in the taxation of returns to capital (NIC on investment income) isn’t he?

22 thoughts on “Idiot is idiot”

  1. Easy test: look at countries with higher labour productivity, look at their tax rates on returns to capital.

    Hmm, not much connection there. Other factors (cost of workers, cost of hiring & firing) seem to matter a lot more.

  2. According to the Resolution Foundation this is training off-the-job. The problem with that is that people learn in lots of other ways now. You can buy e-learning courses in things like refrigeration maintenance, Photoshop or filmmaking.

  3. My company has a training budget per employee which used to be spent on training courses, which were on the whole excruciatingly boring and useless. These would cost thousands.

    The best money they ever spent was getting an Enterprise subscription to Safari Online, where you can read thousands of books, tutorials, watch videos, etc. Probable cost about £200 per person.

    The Spudmeister would see my actual training budget spend falling from £2000 or £3000 p.a. to £200 p.a. and conclude (CRISIS!!) that I am receiving less training, but in fact it is vastly better and infinitely more interesting.

  4. > You can buy e-learning courses in things like …

    That only works for some fields. You wouldn’t let someone drive your car no matter how many YouTube videos of driving lessons they had watched.

    Mind you, e-learning is well-suited to the kinds of service-based outputs that Britain does so well. As the number of UK-based widget-factories has decreased, I’m not surprised to see less widget-training happening.

  5. Rob,

    Just to quibble, the figures are based on binary yes/no “have you received training in the last four weeks?” questions, not on expenditure. That probably still wouldn’t capture e-learning very well though.

  6. Yes This’ll work: reduce taxes on profits and all those nice investors who have no thought for their own interest will train people for the benefit of all.
    Alternatively: cheapskate wankers will try to make money by cutting labour costs and having succeeded will wonder why there is no effectual demand in the economy to buy their stuff.They have been cudgelling brains their dumb brains for ages over this conundrum.What can the answer be?

  7. On this rare occasion I actually agree with DBC Reed. Cutting capital rates even more won’t necessarily translate into more training.

    Furthermore it appears British businesses already get to deduct, or transfer the tax incidence to employees, training costs[1]. Depending how much tax is transferred to employees, lowing earned income rates or consumption rates could be the better move, from a tax standpoint.


  8. Andrew M,

    Sure. And the decline has only been by around 1/3rd from 10% to 7%. Thing is, in some fields (like programming and design stuff), classroom training is pretty much gone. Like I’d say declined by 90%. Video training, Kindle books, blogs etc have killed it. To echo Rob, I’m not going to spend £1500 on AngularJS training when I can take the same time off and watch more stuff from Pluralsight in the same time for $30.

  9. Let me get this straight – the UK sends £4bn a year in subsidies to foreign farms, who then mechanise and shed jobs as they become more productive.
    So for example productivity goes up in Poland and Lithuania, which used to have 20%+ agricultural employment.
    The displaced labour force comes to the countries that provide the subsidies, and gets entry level work. Result is more production here compared to standing around idle over there.
    But because of the daft way the Resolution Foundation measure this shit, they are saying that productivity is flat? Fuck that.
    And on top of that they don’t measure things like government functions correctly – headline example is the way we pay winter fuel allowance which has net costs of staff doing pointless work compared to the counterfactual of just bunging £5/week on pension credit, state pension and the applicable amounts of benefit claims.

  10. Bongo

    It is worth pointing out that in much of the Public Sector (The EHRC for example) productivity is zero to negative because they are doing a job that should not exist and their main output is loading costs onto productive businesses…

  11. Ah. Another mind-vomit from DBC.

    Two hoary old half digested lefty staple arguments. That people who run businesses are so greedy that they can’t figure out that a well trained and well rewarded workforce helps their business along side the old Ford myth about paying workers loads so they can buy the products the company makes.

    We’ll just sprinkle some sawdust of reason on that, wait for the smell to go away and sweep it up.

    It must be truly awful waking up every single morning hoping that capitalism has collapsed overnight only to find it hasn’t.

  12. DBC is half-right: cutting taxes isn’t going to make employers train their staff more. At best it’ll just free up more capital for faster automation of the workplace. (Not that that’s a bad thing!)

    I don’t believe there’s some great untapped wealth that would be unleashed if only our employers spent more on training programmes. If that were the case, they would already be doing so.

  13. Bloke in North Dorset

    “If you want an explanation for the first graph it’s in the second. We just don’t invest enough in people in this country.”

    Perhaps people don’t invest enough in themselves? It would be interesting to see a comparison of how much time and money people spend in each country investing in their own careers eg Open University degrees, MBAs, 2nd/3rd careers (see Lucy Kellaway moving in to teach, although that might be a negative impact on GDP). This measurement should also include the impact of informal time off to study. I’ve allowed a few people the odd day off to prepare for exams.

    Anecdote and single data point alert…

    Rob’s point on the Internet and distance learning goes further. In the early ’90s when I started consulting and travelling around the world I needed to buy, read and take with me quite a few technical books. By the time I was finishing last year most of the stuff I needed was free on the Internet – I had to do some research on 5G and how and when it could be integrated in to a roll out program and got all the information I needed in less than a day. I’m also self taught on the basics of IP, which I needed for building one of Europe’s first (illegal) cross border IP networks, most of that was picked up free from the Internet in the late ’90s.

  14. AndrewC

    At least he is consistent in sticking to the same hoary old tropes- I suppose we should be grateful he didn’t mention an LVT for a change….

  15. – “We just don’t invest enough in people in this country.”

    Witness Ritchie’s own lack of training in economics.

  16. BiND,

    What is this 5G you speak of?

    In the US we are arguing over who has the best 4G network using 5+ year old data points. We don’t need the latest and greatest because, um, American Rocks.

  17. @VP
    Glad you mentioned LVT because the Tory thickies who run things in this country (with never a syllable or scintilla of adverse comment from anyone else on this blog) blundered on Big Knickers to get them out of the hole of minimal” effectual demand” (Adam Smith) from low Tory wages. In the course of one of her prolonged manic episodes she began to subsidise voters to take ownership of public sector housing and then put up house prices to buy votes from these people dazed by their unearned,untaxed capital gains.Thus when it instantly went wrong economically the voters could raise loans “on their property” to tide them over, which is going on now ensuring that the banks own these people in this Christmas Wonderland of total Tory economic and political failure .
    The answer is of course, as Adam Smith prescribed, the Fucking Great Land Tax.But don’t expect a peep out of the ASI :they do not believe in promoting the great man’s work in its totality.

  18. Then of course there’s the modern obsession with bits of paper – you’re only ‘trained’ if you have a bit of paper signed by someone who undoubtedly knows a lot less about his area of ‘expertise’ than many people who’ve been doing the same job all their lives, but don’t have any certificates.

    If I wanted to learn how to operate some piece of machinery I’d be best advised to find an operator with decades of experience and get him to teach me. But in order to be ‘trained’ to State approved levels I have to pay a fortune to get someone who quite possibly knows less than I already do to sign a piece of paper ‘proving’ I know what I’m doing.

    Its the whole ‘those who can, do, those who can’t, teach’ in a nutshell.

  19. @AC
    Many thanks for your kind thoughts.
    You may have noticed that the person whose policies I’m recommending is Adam Smith but you probably don’t know anything about him either.PS Adam Smith was not a Communist, if that’s any help

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