Poor maths skills are to blame for Britain’s ballooning benefits bill, according to the UK boss of Santander.
William Vereker, the bank’s UK chairman who served as business envoy to former prime minister Theresa May, said the worklessness crisis stems from a lack of understanding about money.
He said: “One of the challenges of worklessness is that people look at benefits and they look at the job they can get, and they think to themselves ‘well, I’m only making £5 or £10 a week extra having a job, so why would I bother to do that?’
“But of course the reason to bother is that the following year you’ll make more, and the following you’re going to make more – and you’ll create an opportunity for yourself.
That’s delayed gratification – or the absence of it. Even, a lack of that drive to invest.
As it’s a different problem the solution will be different too. Not teaching kids more maths, instead lower benefit levels.
the following year you’ll make more
That’s not been my experience. Rather, I’m seeing the minimum wage rapidly catching up with me in the rear-view mirror.
Not just lower benefits but increase the gap between out-of-work benefits and the NMW, so that there is an incentive to get a job?
Theo @ 8.41, unfortunately those in power will do precisely that, only they’ll increase the minimum wage rather than reduce benefits to those who vote for them.
Theo, apols, I missed the first part of your post.
Whoda thunk that raising the minimum wage to almost median and setting benefits at 5% below minimum wage would have zeroth-order consequences?
And all this not, what, 15 years after the debate was to even have a minimum wage (here at least).
It’s not even true. Plenty of people are stuck in entry-level jobs their entire lives. We’ve all been served by 60 year old cashiers at supermarkets.
” Plenty of people are stuck in entry-level jobs their entire lives. We’ve all been served by 60 year old cashiers at supermarkets.”
Define ‘stuck’. Many people stay in basic jobs because it suits them. Maybe 60 year old cashiers a) like being cashiers, b) only need a basic job because their other half has a decent wage, c) haven’t actually worked there all their lives, used to have a more stressful and better paid job, but have paid off the mortgage so has downsized their job to something part time and less hard work that gives them more leisure time?
And anyway I think the maths skills of the benefit classes are quite good. They have obviously worked out that working often makes little extra income, especially when put against the extra effort, and loss of leisure time. If you are one of the millions on UC and working the fabled 16 hours a week, why would you work any more hours when you’re taxed at 55% on those earnings (in effect)? If you work a part time minimum wage job (£11-44hr) and do an extra days work you earn an extra £91-52. But you’ll lose £50 of that in the reduction of your UC. So you’ve worked a day, and got £41 more income. Your pay rate is less than half minimum wage. So why bother?
Plenty of people are stuck in entry-level jobs their entire lives.
Very true. And many because that’s what they want. That’s the career they chose, so why would they want to change to something else?
Take a waiter in a restaurant. Can be a very enjoyable & rewarding career. But there’s essentially no difference between a waiter on his first day & one 40 years time served.. The next level up isn’t waiting at tables.
Same’s true of much of the construction industry. A chippy’s a chippy. I’ve run my own company but to be honest, I was much happier “on the tools”. There something particularly satisfying about actually doing something & seeing the result rather than telling other people what to do. So I took the opportunity to do that when I could. There’s things I’ve created people are still enjoying the use of 30 years later. Some of them could last generations. There’s a staircase I built in France an architect said was impossible. It’s entirely possible people could be going up & down that in 2500. My contribution to history. Work isn’t always about just money.
It’s one of the failures of credentialism. People used to be rewarded by how good they were at what they did. Now you get rewarded by having a piece of paper. You reckon that’s been a result?
There is also a cohort of people who don’t have the mental or educational tools to progress onwards career-wise.
People who simply want to turn up, do their shift, then go home. People who’s attitude is always to do the bare minimum and no more.
One thing I’ve always admired about the American educational system (maybe not so much nowadays) was how they always instilled a positive mental attitude. A go-get attitude if you will. Something I think that only gets fostered in the better schools of this land.
Two anecdotes;
One of my school chums in Ireland (which had a pretty good educational system back then) took up a managerial role in a manufacturing company in Devon after leaving school. His first comments to me after a few months in the job we’re that it was impossible to get anything done because all the workers were as lazy as f*ck and thick as pigsh*t. This from a guy who’s a commited Christian and wouldn’t say boo to a ghost. But maybe that’s just Devon.
The other is when I stayed with my sister on the Wirral for a year, after coming back from living some time in Germany. Knew a ton of young people back then who were all at the bottom of the socio-economic ladder (as was I !). Attitude in Germany was that they would study hard, get some qualifications or an apprenticeship, work hard, then progress onto a proper career. It was an expectation. That is how the world worked for Germans. A prosperous middle class life was theirs by right, they just had to work for it.
Arriving back in the Uk, I got to know a few of my sisters friends. Polar opposite attitude. Everybody skint and trying to work out how they could scam more money out of the benefit system. Employment prospects for those who were keen to work, but lacked qualifications, were grim. Single young girls had a good gig by getting pregnant by some rando, thereby acquiring a house and and income.
Has much changed since then? Not really. 3rd level education has turned into a joke for many, leaving them indebted and with a degree that’s of little use. And now kids get to compete for jobs and benefits with the finest of the middle east and the third world. Awesome.
Although they will only be £5 per week better off they could save more than in heating costs during the winter by being in a warm shop/office/factory
Put down the video games & work for 5 pounds per week for a whole year & then you’ll be making a bit more and eventually you’ll be making a lot more – this only works for those who will actually work hard enough to make more down the road. Those who barely do enough to hang on to the entry level job aren’t going to advance much.
When the safety net becomes a comfy hammock plenty of people will be content to stay in it.
Money for nothing and your chicks for free does have a certain allure.
I know someone who is now in his sixties who has worked a reasonably well paid job his entire life and is permanently broke. He seems to be just completely hopeless at managing his money.
Were I a bennies scrounger I’m not sure I’d be thinking of getting a legitimate job and losing 55% of the income in tax for the effort. I’m not necessarily interested in just sitting on my arse all day, so I’ll apply a bit of effort to generating some cash in hand, of which I keep 100%.
There is no shortage of ways to do this. The main problem, as I see it, is that your market demographic is likely to be mostly similar to you. So not a lot of spare cash lying about to redistribute.
There is also a cohort of people who don’t have the mental or educational tools to progress onwards career-wise.
A prosperous middle class life was theirs by right, they just had to work for it.
There’s a presumption there that only mental abilities count & only those with them should be rewarded.
It’s utter bollocks. I once had the privilege of having a time served stone mason working for me. He must have been in his 70s. He could take a soft red. The bricks the fascias of many C19th buildings were built from and in a few minutes carve it into a flower or a leaf to replace the ones that had been damaged or worn over the years. The value that guy was creating for me was enormous. From what I saw of him, he had trouble in reading the Daily Mirror & conversationally he was very limited. His talent was doing what he did & I was very grateful to learn from him.
I never regarded my employees as working for me. My job was working for them. Finding them the work so they could make my money for me. All of them down to the lad who swept the floor. Sweeping a good floor is a skill. As you’ll soon realise if you have to work with a poorly swept one.
I’ve just read this article: https://www.telegraph.co.uk/money/jobs/work-benefits/council-staff-work-from-abroad/ The council employees working from the world’s beaches. What of what a council is supposed to do, do actually value? Emptying, the bins, keeping the streets clean, filling holes in the road? You can’t do any of those WFH & they don’t require a university degree. You getting them these days?
Esteban,
“this only works for those who will actually work hard enough to make more down the road. Those who barely do enough to hang on to the entry level job aren’t going to advance much.”
I think people will earn a bit more as a proven commodity, but it isn’t going to be a huge amount more. And then it’ll basically go flat.
The problem with all debates around the benefits system is that no-one wants to be offensive about it and say what is going on, which is that there are 1) people who just don’t want to work and 2) single mothers for whom work is a very hard thing to balance.
As I shifted from being a bleeding heart liberal to being a classic liberal, part of it was the overwhelming evidence that poor people deserved it. My neighbour who had a terrible run of luck with work for 2 years was rarely unemployed in that period. He couldn’t get specialist mechanic work, but he did a little PCB assembly, some courier stuff on his motorbike, some pub work.
BlokeinBrum,
Germany is now the same. You have to be earning somewhere north of €4000-€5000 a month gross (possibly even higher) to even start pulling away from the cash money plus in-kind that New Germans get at taxpayer’s expense.
Minimum wage is almost €13 per hour. The effects of wage compression combined with swingeing taxes/benefit withdrawal are dramatic, both on willingness of people who can work to do anything other than menial jobs, and on the costs passed on to consumers (€13 burger and fries…)
Even most university-qualified people, with the exception of a handful of hotshot lawyers and bankers working crazy hours, take years of career to get to that level of income.
“Although they will only be £5 per week better off they could save more than in heating costs during the winter by being in a warm shop/office/factory”
We need to charge a higher rate of income tax on earnings during winter than summer.
“…the overwhelming evidence that poor people deserved it.”
See my earlier post about that guy who is gainfully employed but always skint. Nobody’s fault but his as far as I can tell.
“My neighbour who had a terrible run of luck with work for 2 years was rarely unemployed in that period.”
That was me in the early eighties. I did a string of jobs that were only short term, including a stint at Butlins. I was never out of work for long.
Not counting Employers NI, income taxation is 28% (20% PAYE and 8% Employees NI). The 55% UC taper rate applies to after tax income, so you get to ‘keep’ 45% of 72%.
Factor in child care and the loss of council tax support if applicable and you keep even less.
I was thinking the scroungers are just as good at maths as the part time GPs that earn £49.9k, the full-time ones that earn £99.9k, or the self-employed that earn just below the VAT threshold. On reflection the scroungers are good at maths but only in the sense that someone catching a ball is good at calculating s=ut+0.5at2, i.e. not good at maths, but have learned the skills to handle the issue.
As the brilliant international liberal Kristian Niemietz has opined the problem is the government and in particular government housing policy. Reduce housing costs drastically and then you are expelled from being eligible for UC at quite low earnings, and all your after tax additional comes to you.
It is not a lack of maths skills but a lack of the need for the feeling of self-respect that comes from knowing you’ve earned your pay. When I was a child “our” window-cleaner once told my mother, in a conversation about something else, that he would be better-off on the dole – but he worked cleaning windows which is no fun and even less so in winter.
It’s not lack of maths skills, but a recognition that the game is rigged against you.
Government has its foot on the immigration accelerator to destroy the demographic basis of your society and cheat you out of a pay rise. The goal is Canada – the first Clown World former nation to successfully replace its whites with teeming hordes who hate them on a biological basis. On this road, life will just get shittier and more intolerable every year.
Why bother knocking your pan in for coppers when you can claim bennies instead? Our economic policy should be to ______ the bankers.
c) haven’t actually worked there all their lives, used to have a more stressful and better paid job, but have paid off the mortgage so has downsized their job to something part time and less hard work that gives them more leisure time?
I know one guy who went to Sainsbury’s to work on the tills and 2 who went to B&Q having retired once. One had done a full stint in the Navy and left as a CPO or similar and one had worked in the Post office and Police all his life, so both had comfortable pensions, they just wanted something to doo and a bit of pin money. I’m not sure about the third.
I’ve also met plenty of people who just want to go to work, turn the handle and go home to their hobbies or whatever it is that motivates them in life. They aren’t lazy and often want to do a good job, but for them there’s more to life than work and promotions.
There’s a presumption there that only mental abilities count & only those with them should be rewarded.
Yes, and both are false, leading to ‘educating’ millions beyond the level of their academic intelligence while other forms of intelligence are not developed.
One of the joys of those free market things. Value as perceived by others is what counts, whatever and however that value is observed.
BIS,
“I’ve just read this article: https://www.telegraph.co.uk/money/jobs/work-benefits/council-staff-work-from-abroad/ The council employees working from the world’s beaches. What of what a council is supposed to do, do actually value? Emptying, the bins, keeping the streets clean, filling holes in the road? You can’t do any of those WFH & they don’t require a university degree. You getting them these days?”
Yes, but for everyone filling a hole, there’s like dozens of bureaucrats surrounding them. Because of stupid laws, and then, overcomplication in government, and a complete disinterest in performance.
WFH isn’t a problem. You just monitor people’s output. You’re running a call centre, the system tells you how many calls people completed. If you’re running a software team, something like Jira tells you how much each person delivered. It’s no different to service engineers or sales guys who aren’t in the office. How many sales did they make, how many air conditioners did they fix?
The real problem is that a lot of people in government management don’t care that much. You want to do almost nothing, whether from home or in the office, you can, for years. Lots of managers will do nothing about you. Often, they’re not much different, spending their days trying to go to “important meetings” at a leisure centres, just to goon at the young women there. And this has existed for decades, long before WFH.
A lorra lorra people don’t understand the appeal of the dole scum lifestyle isn’t so much laziness as security.
If you’re able to work the system, it will provide you with a nice home, even a car, and a little bit of pocket money. Two adults in full time employment might easily not be able to afford as good a lifestyle, and their private sector rent and future employment prospects are always up for grabs. Less to worry about if you’re on the social.
My neighbour who had a terrible run of luck with work for 2 years was rarely unemployed in that period. He couldn’t get specialist mechanic work, but he did a little PCB assembly, some courier stuff on his motorbike, some pub work.
The problem nowadays is the employee mindset has changed. Don’t have five years’ experience assemblying PCBs in the last five years? Fuck off. You are only considerd for employment if you are already doing that *EXACT* work already. You’ve been doing office admin and you have the temerity to apply for a software development job?!?!?!??? We’re advertising for Bambleweeny 57.98 and your experience is Bambleweeny 57.92? You’ve loads of development experience, but not *PAID* to do it? Fuuuuuuuuuuuucckkkkk offffffffffffffff. Hey, government, GIMMIE MOAR IMMERGRUNTS!!!!!
I know one guy who went to Sainsbury’s to work on the tills and two who went to B&Q having retired once. One had done a full stint in the Navy and left as a CPO or similar and one had worked in the Post Office and Police all his life, so both had comfortable pensions, they just wanted something to do and a bit of pin money. I’m not sure about the third.
A few years ago on one of my IT jobs I was on team job, and was chatting with one of my colleages and I got around to “the pay is crap, how do you live on it?”
* Oh, I’ve got me military pension, innit. I’d never be able to live on what this job pays.
It was an eye-opener. The wages were specifically set on the assumption you already had other income. I also suddenly realised why the recruitment posts targetted ex-military so strongly, people who already had another income.
Doing my nerdy end-of-year accounts overview yesterday I realised that for most years I’ve only broken even because of the rent coming in from my shop.
>“But of course the reason to bother is that the following year you’ll make more, and the following you’re going to make more – and you’ll create an opportunity for yourself.
But . . . will you actually?
I mean, sure, next year you might get a dollar/hr raise – and extra $40/wk before taxes – but inflation has made your expenses increase by $50/wk. Your pay is not tied to cost of living.
In the mean time, your benefits are tied to COL so you get an extra 50/wk in benefits.
You work full time and end up poorer or you sit on benefits and stay where you are.
I don’t know how I missed this:
William Vereker, the bank’s UK chairman who served as business envoy to former prime minister Theresa May, said the worklessness crisis stems from a lack of understanding about money.
You could make a long list of people who don’t understand money, couldn’t you? With Teresa May & the chairmen of the banks at the top of it. You’d be a long way down the list before you got to people on bennies.
It doesn’t matter what is to blame – it’s corrosive for society for more than a smaller number to be claiming benefits. Young people don’t want to work as they are better off not doing so, but what happens when no one is working?
We can steal the assets of the “rich” once, which will extend the government handouts by about 6-9 months, but then what?
Jgh – Don’t have five years’ experience assemblying PCBs in the last five years? Fuck off.
Note that gullible white people tend to tell the truth about their qualifications on job applications.
Whereas our Bharat friends embrace the magical power of lying.
Joe – We can steal the assets of the “rich” once
Can only stretch their necks once too. But it’ll feel so good.
You do know you’re one of the “rich” Steve? Not on benefits is all the Labour party need to know when it comes to fleecing people who are not their voters.