Nudge Psychology and the Unemployed.
A survey using a large questionnaire of 240 questions has been reduced to 48 questions by the Nudge Unit at number 10 Downing Street. The original design was by an American not-for-profit organisation, who at first objected to the way it was used by the Nudge Unit.
The purpose of this survey is to analyse the answers given by the unemployed, in an attempt to improve their chances of getting a job. by showing them evidence of their positive strengths. This has produced criticism of the Nudge Unit for creating a “nanny state”, which does not fit well current government ideology.
More seriously, the unemployed may have feared that this information, and it’s analysis might undermine their chances of future employment. This could lead to deliberate lying in the questionnaire. Whether this fear is well grounded or not, the Nudge Unit has created at least 5 pairs of questions; where the second of the pair checks on the truth of the first. So the nudge unit anticipated lying.
Here are just a few examples. What is striking is that all examples have the first sentence as the positive, and the second as negative; and always in that order. Also, the pairs are next to one another. The possibility of having the pairs further apart would have created a better check on lying.
I always finish what I start./ I get side-tracked when I work.
My life has a strong purpose. /I do not have a calling in life.
I always let bygones be bygones./ I always try to get even.
Secondly, there are 5 cases of questions where a positive answer might indicate a lack of interest in gaining employment. Despite these positive answers which I put to the following questions, an analysis of answers showed that on every count I was extremely suitable for employment. Here are a few examples:
I am easily bored.
I never go out of my way to visit museums.
I get side tracked when I work.
I mope a lot.
Despite agreeing with the “museums” question, one of the results of the analysis of my answers was as follows.
“You always loved school, reading, and museums”.
What this shows is that whatever negative characteristics I reveal, the Nudge Unit shows me to be a very good candidate. Presumably all answers will reveal positive, even positively exaggerated, results.
At the least, this brings into question the validity of this exercise. Beyond that concern, the exercise begins to look manipulative. Firstly, because there are sanctions if this exercise is not completed. Secondly, the exercise produces a “character”, which the unemployed person may, or may not, believe in.
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Lloyds Bank: Bonuses, Redundancies, and agency staff.
Lloyds Bank has just paid 25 senior staff over £1 million pay packages , including bonuses. However, some staff, including a former chief executive, have had some of their bonuses clawed back.
The chief executive received £3.8 million in 2012, which included a bonus of £1.5 million. In 2011 he received £1.7 million, and waived his bonus. Below directors level large numbers of staff have had pay freezes; an annual increase of 1.5% for about 4,000 staff; and staff cuts of nearly 2,000 in 2013 alone.
Lloyds annual accounts for 2012 presents a much rosier picture, but without mentioning cuts or employing about 4,000 agency staff. The accounts do mention that 4 Unions are involved in these negotiations. Specifically, staff engagement in the bank’s strategy has risen to 68% in 2012, compared with 48% in 2011. This is a large numerical increase, and the harder to understand given an increase in agency low paid staff, and job cuts, and the fear of future job cuts.
A possible explanation of this staff enthusiasm for their employer comes from a figure of 78% of those promoted to executive roles, are from internal candidates. Add this to the 3,000 staff taking Open University courses in Leadership, and a policy of selecting staff for promotion and for redundancy, becomes clearer. The promoted, added to those who might expect promotion, goes some way to explain their loyalty. There is no data on those who are made redundant
Unite, one of the 4 unions involved, claims that there has been redundancies of about 35,000 workers in recent years in Lloyds. This has created much stress around future job losses. But there is also stress around an increased work load. This increase comes from 2 sources. A part of the increase is due to there being fewer workers to do the work. Another part is due to the need to train up casual agency staff, and with a possible high turnover of agency staff.
Royal Bank of Scotland: Bonus Time!
For fixing LIBOR interests the bank has been fined :
£87 Million to the Financial Services Authority;
$325 million to the United States Commodity Futures Trading;
$150 million to the United States Department of Justice.
Investigating authorities have found RBS “as a firm”, not involved in “deliberate misconduct”. Only “individual traders” and “their immediate supervisors” were involved. This is the latest response by the bank to the Libor rate fixing crisis. The bank claims to have looked at 11 million documents; interviewed over 100 employees; and identified 21 “wrong doers”. Most of the 21 have left or been disciplined.
With embarrassingly poor timing the 2010 long term incentive bonuses are due to be paid out over future weeks. Many of the bonuses, including those due to American employees, may not be paid in full. They may be subject to claw back. Indeed the bank has recently made much of this claw back as it shows the bank senior employees will suffer this cost, and not share-holders, including the government.
However, the long term incentive for the Chief Executive, will not be affected. About £780,000 will be paid in May.
The undisclosed full details of the criteria for these incentive payments include “financial and operational performance”, and “effective” risk management.
Given the size of the misconduct by the wrong doers, as measured by the above figures, surely the question is why should any incentive payment be given to anyone in the bank. One answer to this is the problem of the legal status of these incentives from 2010. Are they legally binding contracts? If so, can the payments not be given in whole, or in part, to charity? If they are not legally binding, why is the bank still making them?
All this raise questions about transparency. As this bank is largely state owned, tax payers should be able to find out the status of these agreements about incentives. There is no public clarity about which criteria, if any, have been met; and which have not. RBS still has questions to answer!
The new Census for 2011 for England and Wales is published today.
The figures below are in thousands.
The number of retired men has increased from 620 to 2161.
The number of retired women has increased from 1148 to 2975.
The number of permanently sick and disabled men has increased from 822 to 1131.The number of permanently sick and disabled women has increased from 759 to 945.
The number of men looking after home and family has increased from 166 to 170.The number of women looking after home and family has increased from 1598 to 2278.
Comment:
By far the greatest overall changes since 2001 are in the number retiring; with women retirees outnumbering male retirees by 286 thousand in 2011.
Sick and permanently disabled men outnumber women by 123 thousand in 2011.
By far the biggest increase in the last 10 years is in women looking after home and family. This figure has increased by 680 thousand. The similar male figure has only increased by 4 thousand.
Policy Implications:
More support for women as full time carers, including financial support.
More adult education for both men and women retirees.
More health for the elderly.
These data indicate more human needs to be met by the welfare state. This may be untimely, but it should still be demanded.
What are Trade Unions for?
Here are some obvious answers.
Increasing members’ pay:
Karl Marx was ambivalent about this. He called it an economic act, as opposed to a political act. However, to ask for increased pay for all workers was a political act; and he thought unions could become political, in this narrow sense, over time.
Antonio Gramsci saw this as a commercial act. Workers sold their labour, as companies sold goods and services. So both workers and companies were engaged in commercial acts, but each side had different political ideals.
George Woodcock’s political ideal was for unions to walk in the corridors of power. This assumed the primacy of politics over economics. Activity in national politics was the correct way to increase members pay.
Reducing inter union rivalry:
By reducing the total number of unions in Britain, and leaving a smaller number of very large unions, this would reduce the number of unions in any one workplace or office. So when union became into conflict with management there was only one large union to negotiate with. Also, in any conflict there would not be one union taking action, and another not.
Creating Industrial democracy:
Placing workers on boards of directors ensured that there was a voice arguing for members interests. Especially if redundancy was on the agenda. This could lead to a greater questioning of management’s prerogatives. It could also lead to the union member internalising management’s problems.
Creating a good relationship with the general public:
The British Social Attitudes Survey has been asking questions since 1983 about wider social and political issues. But there has been a regular series of questions about trade unions. Here are some examples.
Question: Are Trade Unions well run?
47% thought that they were in 2009, as opposed to 24% in 1983. This is clear evidence of an improving relationship over 26 years.
However, when asked about unions helping to improve working conditions in 2010 the figure was 20%; in 2003 it was 28%. This is evidence of weakness in confronting working conditions, which have been worsening in recent years.
Question: Have Trade Unions the right amount of power?
In 1985 the answer was yes for 33%; in 2007 it was 55%. This can be read in a number of ways, but a simple answer is that this significant increase is not seen as unions being too powerful.
So, what are unions for?
Unions are for all of the above, but to differing extents over time. Secondly, there is no agreement about the relative importance of any one of them Thirdly, I could have given many more answers about gender, race, equality, workplace abuse etc..
What is striking about the above evidence is that unions are better regarded by the public than the mass media often suggests. As to the earlier historical arguments about union’s role in society, unions now need to be concerned about the general return to labour in hard times, including pay, and job security; and finally getting a fairer share of any future economic growth.
Brendan Caffrey.
The Banks: Splitting Retail from Investment Banking?
For the last month or two major banks in Britain have been talking about this split. Barclays remains sceptical, arguing that splitting would affect the way each part helps to generate profits for the other. So a small business, with only a retail account with the bank, might benefit from an investment account were it to be making super profits.
On the other hand Deutsche Bank in London wants to be “in the forefront of cultural change”. The Bank admits to have been involved in the Libor scandal. So they may well be thinking of a split.
More generally the Bank of England has been arguing that most of the Chief executives in British Banks are recent appointments, and so not tainted with the Libor scandal.
Why are the banks having this debate? Firstly, the concern that investment banking had been dangerously out of control, and was threating the security of monies in individual’s bank accounts. Remember the panic about banks running out of cash from cash dispensers. Were individual’s life savings at risk? Secondly, a Government report has recommended this split, and the Labour Party now supports the split.
Will the split actually happen? The coalition government is itself split on whether to allow, or make, the banks split their retail and investment arms. There may be Chinese whispers across the fence! The labour party is waiting to win an election. There has been a Vickers Report, which has recommended ring fencing investment banking from retail. There is a House of Commons Committee looking at banks behaviour. Lloyd’s Bank has promised to ring fence by 2019.
The debate continues. But there is little evidence of anything else happening.
Brendan Caffrey.
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What are Libor rates?
They are rates of interest that banks believe they will have to pay for borrowing money over future months ; and covering a variety of different currencies.
Who sets them?
All the major banks, the British Bankers Association, and the Treasury are all involved.
Is fraud involved in the setting of these rates?
The Serious Fraud office is currently investigating. Barclays has been fined. Royal Bank of Scotland expects to be fined. HSBC is involved , but has not set any money aside to pay for expected fines.
If a bank wants to avoid being bailed out with tax payers money, then a low libor rate shows that the bank is safe, and not needing a bailout. This was important for Barclays in 2008 when it was getting foreign investment.
A committee chaired by the British Bankers Association sets the rate based on figures by those invited to the meeting. It is not known who attends, what they recommend, or the influence of the Treasury . The chair takes all the figures and produces an average. But what sort of average is it? Is any one members figure weighted to take account of the bank’s size? Are international banks figures weighted, to take into account their global reach? Does the Treasury have more or less influence than the banks? Was any member aware that giving figures that did not reflect actual current rates, or an honest assessment of future rates, could be construed as fraud? Which were the various foreign currencies affected?
There seem to be no answers to any of the above questions. But what is now revealed is that there is little transparency in this process. But nearly everyone is affected. When banks get higher libor rates, it allows they to charge higher interest rates to their customers and mortgage holders.
The current, and long established, system is bank self-regulation. The British Bankers Association is a sort of trade body for banks. The Financial Services Authority is now considering bringing this system under the remit of the law.
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What are Libor rates
